<PAGE>   1


                                                        EXHIBIT INDEX ON PAGE 43


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                                      1934

                   For the fiscal year ended December 31, 1999

                         Commission file number: 1-6064

                                ALEXANDER'S, INC.
                                -----------------
             (Exact name of registrant as specified in its charter)

<TABLE>

<S>                                                   <C>
                    Delaware                               51-0100517
--------------------------------------------          ----------------------
        (State or other jurisdiction of                  (I.R.S. Employer
        incorporation or organization)                  Identification No.)

Park 80 West, Plaza II, Saddle Brook, New Jersey               07663
------------------------------------------------           ---------------
    (Address of principal executive offices)                 (Zip Code)

</TABLE>

Registrant's telephone number, including area code:    (201) 587-8541

Securities registered pursuant to Section 12(b) of the Act:

<TABLE>

<S>                                    <C>
      Title of each class              Name of each exchange on which registered
    --------------------               -----------------------------------------
  Common Stock, $1 par value                     New York Stock Exchange
</TABLE>

Securities registered pursuant to Section 12(g) of the Act:  NONE


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
YES  X        NO

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The aggregate market value of the common stock held by non-affiliates of the
Registrant (based upon the closing price of the stock on the New York Stock
Exchange on February 25, 2000) was approximately $154,554,000.

5,000,850 shares of the Registrant's common stock, par value $1 per share, were
outstanding as of February 25, 2000.

                       Documents Incorporated by Reference

Part III: Proxy Statement for Annual Meeting of Shareholders to be held May 31,
2000




<PAGE>   2





                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>                                                                                          <C>
                                                                                             Page
                  Item                                                                       ----
                  ----
   PART I.        1.     Business                                                               3

                  2.     Properties                                                             6

                  3.     Legal Proceedings                                                     10

                  4.     Submission of Matters to a Vote of Security Holders                   10

                         Executive Officers of the Company                                     10

   PART II.       5.     Market for Registrant's Common
                         Equity and Related Stockholder Matters                                11

                  6.     Selected Financial Data                                               12

                  7.     Management's Discussion and Analysis of
                         Financial Condition and Results of Operations                         13

                  7A.    Quantitative and Qualitative Disclosures about Market Risk            19

                  8.     Financial Statements and Supplementary Data                           19

                  9.     Changes in and Disagreements with Accountants
                         on Accounting and Financial Disclosure                                19

   PART III.      10.    Directors and Executive Officers of the Registrant                    38 (1)

                  11.    Executive Compensation                                                38 (1)

                  12.    Security Ownership of Certain
                         Beneficial Owners and Management                                      38 (1)


                  13.    Certain Relationships and Related Transactions                        38 (1)


   PART IV        14.    Exhibits, Financial Statement
                         Schedules, and Reports on Form 8-K                                    39

   SIGNATURES                                                                                  40
-----------------
</TABLE>


(1)         These items are omitted because the Registrant will file a
            definitive Proxy Statement pursuant to Regulation 14A involving the
            election of directors with the Securities and Exchange Commission
            not later than 120 days after December 31, 1999, which is
            incorporated by reference.

                                      -2-
<PAGE>   3


                                     PART I

Item 1.    Business

GENERAL

       Alexander's, Inc. (the "Company") is a real estate investment trust
("REIT") engaged in leasing, managing, developing and redeveloping properties.
Alexander's activities are conducted through its manager, Vornado Realty Trust
("Vornado").

       Alexander's has eight properties consisting of:

       Operating properties:

       (i)    the Rego Park I property located on Queens Boulevard and 63rd Road
              in Rego Park, Queens, New York, which contains a recently
              redeveloped 351,000 square foot building, which is 100% leased to
              Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy;

       (ii)   the Kings Plaza Regional Shopping Center on Flatbush Avenue in
              Brooklyn, New York, which contains 1,100,000 square feet is
              comprised of a two-level mall containing 477,000 square feet, a
              289,000 square foot department store leased to Sears and another
              anchor department store owned and operated as a Macy's by
              Federated Department Stores, Inc. ("Federated");

       (iii)  the Fordham Road property located at Fordham Road and the Grand
              Concourse in the Bronx, New York, which contains a 303,000 square
              foot building currently unoccupied;

       (iv)   the Flushing property located at Roosevelt Avenue and Main Street
              in Flushing, New York, which contains a 177,000 square foot
              building currently unoccupied; and

       (v)    the Third Avenue property located at Third Avenue and 152nd Street
              in the Bronx, New York, which contains a 173,000 square foot
              building leased to an affiliate of Conway.

       Non-operating properties to be developed:

       (vi)   the Lexington Avenue property which comprises the entire square
              block bounded by Lexington Avenue, East 59th Street, Third Avenue
              and East 58th Street in Manhattan, New York;

       (vii)  the Paramus property which consists of 30.3 acres of land located
              at the intersection of Routes 4 and 17 in Paramus, New Jersey; and

       (viii) the Rego Park II property, which comprises one and one-half square
              blocks of vacant land adjacent to the Rego Park I property.

       The Company is currently undertaking the excavation and laying the
foundation for its Lexington Avenue property as part of the proposed development
of a large multi-use building. The proposed building is expected to be comprised
of a commercial portion, which may include a combination of retail stores,
offices, hotel space, extended stay residences, residential rentals and parking;
and a residential portion, consisting of condominium units to be sold to the
public. In connection therewith, the Company paid $14,500,000 for 140,000 square
feet of air rights of which $12,200,000 was paid to Vornado (Vornado's cost plus
$243,000 in interest and closing costs). The air rights were contracted for and
paid for in 1999, with closings to take place when the developments which give
rise to the air rights are completed in 2000. The capital required for the
proposed building will be in excess of $400,000,000.

       Because a REIT is not permitted to sell condominiums, the air rights
representing the residential portion of the property are being transferred to a
preferred stock affiliate, a corporation in which the Company owns all of the
preferred equity and none of the common equity. The transfer value will be
adjusted once the final size of the residential portion is determined.



                                      -3-
<PAGE>   4

       Sears accounted for 22%, 28% and 31% of the Company's consolidated
revenues for the years ended December 31, 1999, 1998 and 1997, respectively.
Caldor, a former tenant, accounted for 22% of the Company's consolidated
revenues in 1997. No other tenant accounted for more than 10% of revenues.

       In June 1998, the Company increased its interest in the Kings Plaza Mall
(the "Mall") to 100% by acquiring Federated's 50% interest. The purchase price
was approximately $28,000,000, which was paid in cash, plus the Company agreed
to pay Federated $15,000,000 to renovate its Macy's store in the Mall
($12,103,000 has been paid as of January 31, 2000) and Federated agreed to
certain modifications to the Kings Plaza Operating Agreement. In connection with
the acquisition, the Company completed a $90,000,000 three-year mortgage loan.
The loan is collateralized by the Company's interest in the Kings Plaza Regional
Shopping Center and bears interest at LIBOR plus 1.25% (7.75% at December 31,
1999). In addition to funding the acquisition, the proceeds from the borrowing
were also used to repay $34,900,000 of debt. Further, on August 9, 1999 the
Company increased the availability under this mortgage loan by $30,000,000
($9,935,000 is outstanding as of January 31, 2000) of which $15,000,000 will be
used to partially fund a renovation of the Mall estimated to cost $33,000,000
($9,045,000 has been paid as of January 31, 2000) and $15,000,000 will be used
to pay the liability to Federated noted above. The renovations are expected to
be completed in 2000.

       In the aggregate, Alexander's operating properties do not generate
sufficient cash flow to pay all of its expenses. The Company's three
non-operating properties (Lexington Avenue, Paramus, and Rego Park II) are in
various stages of development. As rents commence from portions of the
development properties and from the vacant property(s), the Company expects that
cash flow will become positive.

       The Company estimates that the fair market values of its assets are
substantially in excess of their historical cost and that it has additional
borrowing capacity. Alexander's continues to evaluate its needs for capital,
which may be raised through (a) property specific or corporate borrowing, (b)
the sale of securities and (c) asset sales. Although there can be no assurance,
the Company believes that these cash sources will be adequate to fund cash
requirements until its operations generate adequate cash flow.

       The Company is a Delaware corporation with its principal executive office
located at Park 80 West, Plaza II, Saddle Brook, New Jersey 07663, telephone
(201) 587-8541.

       Relationship with Vornado Realty Trust ("Vornado")

       Vornado owns 32% of the Company's Common Stock. The Company is managed
by, and its properties are redeveloped and leased by Vornado, pursuant to
agreements with a one-year term expiring in March of each year which are
automatically renewable.

       The annual management fee payable by the Company to Vornado is equal to
the sum of (i) $3,000,000, (ii) 3% of the gross income from the Mall, plus (iii)
6% of development costs with minimum guaranteed fees of $750,000 per annum. The
leasing agreement provides for the Company to pay a fee to Vornado equal to (i)
3% of the gross proceeds, as defined, from the sale of an asset and (ii) in the
event of a lease or sublease of an asset, 3% of lease rent for the first ten
years of a lease term, 2% of lease rent for the eleventh through the twentieth
years of a lease term and 1% of lease rent for the twenty-first through
thirtieth year of a lease term. Subject to the payment of rents by tenants, the
Company owes Vornado $1,756,000 at December 31, 1999. Such amount is payable
annually in an amount not to exceed $2,500,000, until the present value of such
installments (calculated at a discount rate of 9% per annum) equals the amount
that would have been paid had it been paid on September 21, 1993, or at the time
the transactions which gave rise to the Commissions occurred, if later.

       As of December 31, 1999, the Company has a loan payable to Vornado
aggregating $95,000,000, including $50,000,000 it borrowed from Vornado on
October 20, 1999. The Company used the proceeds from the additional $50,000,000
loan to fund a portion of the development costs at its Lexington Avenue property
and a portion of the costs to refurbish its Kings Plaza Regional Shopping
Center. The loan, which was scheduled to mature on March 15, 2000, has been
extended to March 15, 2001 and the interest rate has been reset from 14.18% per
annum to 15.72% per annum reflecting an increase in the underlying treasury
rate. The loan is secured by liens on all of the Company's assets and/or pledges
of the stock of subsidiaries owning the assets and/or guarantees of such
subsidiaries and the parent. The liens do not cover the Kings Plaza Regional
Shopping Center and Rego Park I and are subordinate to first mortgages and a
$20,000,000 bank term loan.



                                      -4-
<PAGE>   5

       Vornado is a fully integrated REIT with significant experience in the
ownership, development, leasing, operation and management of retail and office
properties.

       Steven Roth is Chief Executive Officer and a director of the Company, the
Managing General Partner of Interstate Properties ("Interstate") and Chairman of
the Board and Chief Executive Officer of Vornado. At December 31, 1999,
Interstate and its Partners own 27.3% of the outstanding common stock of the
Company and owns 15.0% of the outstanding common shares of beneficial interest
of Vornado. In addition, Mr. Roth owns 1.8% of the outstanding common shares of
beneficial interest of Vornado. Mr. Roth, Interstate and the other two general
partners of Interstate, David Mandelbaum and Russell B. Wight, Jr. (who are
also directors of the Company and trustees of Vornado) own, in the aggregate,
17.8% of the outstanding common shares of beneficial interest of Vornado.

ENVIRONMENTAL MATTERS

       In June 1997, the Kings Plaza Regional Shopping Center (the "Center"),
commissioned an Environmental Study and Contamination Assessment Site
Investigation (the Phase II "Study") to evaluate and delineate environmental
conditions disclosed in a Phase I study. The results of the Study indicate the
presence of petroleum and bis (2-ethylhexyl) phthalate contamination in the soil
and groundwater. The Company has delineated the contamination and has developed
a remediation approach. The New York State Department of Environmental
Conservation ("NYDEC") has not yet approved the remediation approach. In 1997,
the Center accrued $1,500,000 for its estimated obligation with respect to the
clean up of the site, which includes costs of (i) remedial investigation, (ii)
feasibility study, (iii) remedial design, (iv) remedial action and (v)
professional fees. Based upon revised estimates the Company accrued an
additional $500,000 in the second quarter of 1999 ($727,000 has been paid as of
January 31, 2000). If the NYDEC insists on a more extensive remediation
approach, the Company could incur additional obligations.

       The majority of the contamination may have resulted from activities of
third parties; however, the sources of the contamination have not been fully
identified. Although the Company intends to pursue all available remedies
against any potentially responsible third parties, there can be no assurance
that such parties will be identified, or if identified, whether these
potentially responsible third parties will be solvent. In addition, the costs
associated with pursuing any potentially responsible parties may be cost
prohibitive. The Company has not recorded an asset as of December 31, 1999 for
potential recoveries of environmental remediation costs from other parties.

       Compliance with applicable provisions of federal, state and local laws
regulating the discharge of materials into the environment or otherwise relating
to the protection of the environment have not had, and, although there can be no
assurance, are not expected to have, a material effect on the Company's
financial position, results of operations and cash flows.

COMPETITION

       The Company conducts its real estate operations in the New York
metropolitan area, a highly competitive market. The Company's success depends
upon, among other factors, the trends of the national and local economies, the
financial condition and operating results of current and prospective tenants,
the availability and cost of capital, interest rates, construction and
renovation costs, income tax laws, governmental regulations and legislation,
population trends, the market for real estate properties in the New York
metropolitan area, zoning laws and the ability of the Company to lease, sublease
or sell its properties at profitable levels. The Company competes with a large
number of real estate property owners. In addition, although the Company
believes that it will realize significant value from its properties over time,
the Company anticipates that it may take a number of years before all of its
properties generate cash flow at or near anticipated levels. The Company's
success is also subject to its ability to finance its development and to
refinance its debts as they come due.

EMPLOYEES

       The Company currently has one corporate employee and 70 property level
employees.




                                      -5-
<PAGE>   6


Item 2.    Properties

The following table shows the location, approximate size and leasing status as
of December 31, 1999 of each of the Company's properties.

<TABLE>
<CAPTION>

                                          Approximate        Approximate
                                            Area in        Leaseable Square         Average
                                          Square Feet           Feet/             Annualized
                                             ("SF")           Number of            Base Rent     Percent
             Property        Ownership     or Acreage           Floors           Per Sq. Foot     Leased
             --------        ---------     ----------           ------           ------------     ------
OPERATING PROPERTIES

<S>                          <C>          <C>               <C>                 <C>               <C>
   Rego Park I               Owned         4.8 acres         351,000/3           $28.76            100%
     Queens Blvd. &                                              (1)
     63rd Rd.
     Rego Park, New York

   Kings Plaza Regional      Owned         24.3 acres        766,000/4            29.40            91%
     Shopping Center                                          (1)(2)
     Flatbush Avenue
     Brooklyn, New York


   Fordham Road &            Owned         92,211 SF         303,000/5                  --          --
     Grand Concourse
     Bronx, New York

   Roosevelt Avenue &        Leased (3)    44,975 SF         177,000/4                  --          --
     Main Street
     Flushing, New York

   Third Avenue &
     152nd Street
     Bronx, New York         Owned         60,451 SF         173,000/4             5.00            100%

                                                            ----------
                                                             1,770,000
                                                            ==========

DEVELOPMENT PROPERTIES

   Square block at East      Owned         84,420 SF              --
     59th Street &                                               (4)
     Lexington Avenue
     New York, New York

     Routes 4 & 17           Owned         30.3 acres             --
     Paramus, New Jersey                                         (5)

     Rego Park II            Owned         6.6 acres              --
     Queens, New York
</TABLE>

<TABLE>
<CAPTION>


                                     Significant                          Lease
                                       Tenants             Square      Expiration/
                                   (30,000 square         Footage        Option
             Property               feet or more)          Leased      Expiration
             --------              --------------          ------      ----------
<S>                             <C>                       <C>          <C>
OPERATING PROPERTIES
   Rego Park I                        Sears               195,000         2021
     Queens Blvd. &                Circuit City            50,000         2021
     63rd Rd.                   Bed Bath & Beyond          46,000         2013
     Rego Park, New York            Marshalls              39,000      2008/2021

   Kings Plaza Regional               Sears               289,000      2023/2033
     Shopping Center             107 Mall tenants
     Flatbush Avenue
     Brooklyn, New York


   Fordham Road &                       --                     --
     Grand Concourse
     Bronx, New York

   Roosevelt Avenue &                   --                     --
     Main Street
     Flushing, New York

   Third Avenue &
     152nd Street
     Bronx, New York          An affiliate of Conway      173,000         2023
</TABLE>

                                      -6-
<PAGE>   7



(1)    Excludes parking garages operated for the benefit of the Company.

(2)    Excludes the 339,000 square foot Macy's store, owned and operated by
       Federated.

(3)    Leased to the Company through January 2027. The Company is obligated to
       pay rent to the landlord as follows: $331,000 per year from February 1997
       through January 2007, $220,000 per year from February 2007 through
       January 2017, and $147,000 per year from February 2017 through January
       2027.

(4)    The Company razed the existing buildings and is currently undertaking the
       excavation and laying the foundation of the site. It is evaluating
       development plans for this site which may include a large multi-use
       building.

(5)    Governmental approvals have been obtained to develop a shopping center at
       this site containing approximately 550,000 square feet (see Item 2
       "Paramus Property").


Operating Properties:

Rego Park I

       The Rego Park I property encompasses the entire block fronting on Queens
Boulevard and bounded by 63rd Road, 62nd Drive, 97th Street and Junction
Boulevard.

       The existing 351,000 square foot building was redeveloped in 1996 and is
fully leased to Sears, Circuit City, Bed Bath & Beyond, Marshalls and Old Navy.
In addition, in conjunction with the redevelopment, a multi-level parking
structure was constructed which provides paid parking spaces for approximately
1,200 vehicles.

Kings Plaza Regional Shopping Center

       The Kings Plaza Regional Shopping Center (the "Center") contains
approximately 1.1 million square feet and is comprised of a two-level mall (the
"Mall") containing 477,000 square feet and two four-level anchor stores. One of
the anchor stores is owned by the Company and leased to Sears, while the other
anchor store is owned and operated as a Macy's store by Federated. In June 1998,
the Company increased its interest in the Mall to 100% by acquiring Federated's
50% interest. The purchase price was approximately $28,000,000, which was paid
in cash, plus the Company agreed to pay Federated $15,000,000 to renovate its
Macy's store in the Mall and Federated agreed to certain modifications to the
Kings Plaza Operating Agreement. The Center occupies a 24.3-acre site at the
intersection of Flatbush Avenue and Avenue U located in Brooklyn, New York.
Among the Center's features are a marina, a five-level parking structure and an
energy plant that generates all of the Center's electrical power. The Company is
currently renovating the Mall in connection with the overall renovation of the
Center at an estimated cost of $33,000,000 of which $9,045,000 has been expended
as of January 31, 2000. The renovation is expected to be completed in 2000.


                                      -7-
<PAGE>   8




      The following table shows lease expirations for the Mall tenants in the
Center for the next ten years, assuming none of the tenants exercise renewal
options:

<TABLE>
<CAPTION>


                                                                               Percent of     Percent of
                            Approximate                                       Total Lease      1999 Gross
                          Leased Area in       Annualized       Annualized      Square        Annual Base
                            Square Feet        Fixed Rent       Fixed Rent      Footage        Rental
             Number of         Under              Under       Under Expiring   Represented   Represented
              Leases         Expiring            Expiring       Leases per     by Expiring   by Expiring
   Year      Expiring         Leases              Leases        Square Foot      Leases         Leases
----------   --------    --------------        -----------    --------------   -----------   ------------

<S>          <C>         <C>                 <C>              <C>              <C>           <C>
   2000           2             3,901        $     202,656      $ 51.95            0.95%         1.15%
   2001          15            69,142            2,572,737        37.21           16.92%        14.55%
   2002          14            26,778            1,577,979        58.93            6.55%         8.92%
   2003           8            16,611              860,071        51.78            4.06%         4.86%
   2004           4            23,006              908,255        39.48            5.63%         5.14%
   2005           4            16,232              500,192        30.82            3.97%         2.83%
   2006          15            61,808            1,918,773        31.04           15.12%        10.85%
   2007          12            59,301            3,114,608        52.52           14.51%        17.61%
   2008           5             5,959              343,613        57.66            1.46%         1.94%
   2009          16            78,438            3,753,020        47.85           19.19%        21.22%
</TABLE>

The following table shows the occupancy rate and the average annual rent per
square foot for the Mall stores as of:

<TABLE>
<CAPTION>
                                                                                   Average
                                                                              Annual Base Rent
                                                    Occupancy Rate             Per Square Foot
                                                    --------------           -------------------

<S>                                                     <C>                     <C>
                     December 31, 1999                   86%                     $  43.12
                     December 31, 1998                   90%                        40.63
                     December 31, 1997                   86%                        38.17
                     December 31, 1996                   84%                        37.29
                     December 31, 1995                   88%                        31.43
</TABLE>

Fordham Road

       The Company owns the Fordham Road property, which is located at the
intersection of Fordham Road and the Grand Concourse in the Bronx, New York. The
property includes a five-floor building containing approximately 303,000 square
feet located in the center of a shopping complex in one of the busiest shopping
areas in the Bronx. This property, which is currently unoccupied, was previously
leased to Caldor. The Company is currently in discussions with several tenants
to re-lease all or portions of this space.

Flushing

       The Flushing property is located on Roosevelt Avenue and Main Street in
the downtown, commercial section of Flushing, Queens. Roosevelt Avenue and Main
Street are active shopping districts with many national retailers located in the
area. A subway entrance is located directly in front of the property with bus
service across the street. It comprises a four-floor building containing 177,000
square feet and a parking garage.

       This property, which is currently unoccupied, was previously sub-leased
to Caldor (other than the portion currently being used as a parking garage). In
January 1999, Caldor announced that it is closing all of its stores. Caldor
rejected the lease effective March 29, 1999. The Company is currently in
discussions with several tenants to re-lease all or portions of this space.




                                      -8-
<PAGE>   9




Third Avenue

       The Company owns the Third Avenue property, a four-floor building and a
small surface parking lot located at the intersection of Third Avenue and 152nd
Street in the Bronx, New York. The store is located in a densely populated
neighborhood. This property is leased to an affiliate of Conway, a New York area
discount retailer.

Development Properties:

Lexington Avenue

       The Company owns the Lexington Avenue property which comprises the entire
square block bounded by Lexington Avenue, East 59th Street, Third Avenue and
East 58th Street and is situated in the heart of one of Manhattan's busiest
business and shopping districts with convenient access to several subway and bus
lines. The property is located directly across the street from Bloomingdale's
flagship store and only a few blocks away from both Fifth Avenue and 57th
Street.

       The Company is currently undertaking the excavation and laying the
foundation for its Lexington Avenue property as part of the proposed development
of a large multi-use building. The proposed building is expected to be comprised
of a commercial portion, which may include a combination of retail stores,
offices, hotel space, extended stay residences, residential rentals and parking;
and a residential portion, consisting of condominium units to be sold to the
public. In connection therewith, the Company paid $14,500,000 for 140,000 square
feet of air rights of which $12,200,000 was paid to Vornado (Vornado's cost plus
$243,000 in interest and closing costs). The air rights were contracted for and
paid for in 1999, with closings to take place when the developments which give
rise to the air rights are completed in 2000. The capital required for the
proposed building will be in excess of $400,000,000.

       Because a REIT is not permitted to sell condominiums, the air rights
representing the residential portion of the property are being transferred to a
preferred stock affiliate, a corporation in which the Company owns all of the
preferred equity and none of the common equity. The transfer value will be
adjusted once the final size of the residential portion is determined.

Paramus

       The Company owns 30.3 acres of land located at the intersection of Routes
4 and 17 in Paramus, New Jersey. The Company's property is located directly
across from the Garden State Plaza regional shopping mall, within two miles of
three other regional shopping malls and within 10 miles of New York City.

       The Company intends to develop a shopping center of approximately 550,000
square feet on this site. The estimated cost of such development is
approximately $100,000,000. The Company has received municipal approvals on
tentative plans to redevelop the site. No development plans have been finalized.

Rego Park II

       The Company owns two land parcels adjacent to the Rego Park I property.
They are the entire square block bounded by the Long Island Expressway, 97th
Street, 62nd Drive and Junction Boulevard and a smaller parcel of approximately
one-half square block at the intersection of 97th Street and the Long Island
Expressway. Both parcels are currently zoned for residential use. Both parcels
are being used for public paid parking. The Company intends to continue to use
these properties for paid parking while it evaluates development options.

Insurance

       The Company carries comprehensive liability, fire, flood, extended
coverage and rental loss insurance with respect to its properties with policy
specifications and insured limits customarily carried for similar properties.
Management of the Company believes that the Company's insurance coverage
conforms to industry norms.




                                      -9-
<PAGE>   10


Item 3.    Legal Proceedings

       Neither the Company nor any of its subsidiaries is a party to, nor is
their property the subject of, any material pending legal proceeding other than
routine litigation incidental to their businesses. The Company believes that
these legal actions will not be material to the Company's financial condition or
results of operations.

Item 4.    Submission of Matters to a Vote of Security Holders

      No matters were submitted to a vote of security holders during the fourth
quarter of the year ended December 31, 1999.

Executive Officers of the Company

      The following is a list of the names, ages, principal occupations and
positions with the Company of the executive officers of the Company and the
positions held by such officers during the past five years.

<TABLE>
<CAPTION>

                                                    Principal Occupations, Position and Office (current and
                                                    during the past five years with the Company unless otherwise
          Name                      Age             stated)
-------------------------           ---             ------------------------------------------------------------
<S>                                 <C>            <C>
Stephen Mann                         62             Chairman of the Board of Directors since March 2,
                                                    1995; Interim Chairman of the Board of Directors
                                                    from August, 1994 to March 1, 1995; Chairman of the
                                                    Clifford Companies since 1990; and, prior thereto,
                                                    counsel to Mudge Rose Guthrie Alexander & Ferdon,
                                                    attorneys.



Steven Roth                          58             Chief Executive Officer of the Company since March
                                                    2, 1995; Chairman of the Board and Chief Executive
                                                    Officer of Vornado since May 1989; Chairman of
                                                    Vornado's Executive Committee of the Board since
                                                    April 1988; and the Managing General Partner of
                                                    Interstate, an owner of shopping centers and an
                                                    investor in securities and partnerships.



Joseph Macnow                        54             Vice President and Chief Financial Officer of the
                                                    Company since August 1995; Executive Vice President
                                                    - Finance and Administration of Vornado since
                                                    January 1998 and Vice President and Chief Financial
                                                    Officer of Vornado from 1985 to January 1998.



Irwin Goldberg                       55             Secretary and Treasurer from June 1999 to present;
                                                    Vice President - Chief Financial Officer of Vornado
                                                    since January 1998; Partner at Deloitte & Touche LLP
                                                    from September 1978 to January 1998


</TABLE>




                                      -10-
<PAGE>   11




                                    PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

       Equity and Related Stockholder Matters

       The common stock, par value $1.00 per share, of the Company is traded on
the New York Stock Exchange under the symbol "ALX". Set forth below are the high
and low sales prices for the Company's common stock for each full quarterly
period within the two most recent years:

<TABLE>
<CAPTION>

                                               High                      Low
                                               ----                      ---
<S>                <C>                      <C>                      <C>
             1st   Quarter 1999             $  78 1/4                $  66 15/16
             2nd   Quarter 1999                75 7/8                   68
             3rd   Quarter 1999                84 1/16                  70 1/2
             4th   Quarter 1999                79 1/2                   70
</TABLE>

<TABLE>
<CAPTION>

                                               High                      Low
                                               ----                      ---
<S>                <C>                      <C>                      <C>
             1st   Quarter 1998             $  95 1/4                $  86 1/16
             2nd   Quarter 1998                93 15/16                 85 1/2
             3rd   Quarter 1998                93 1/8                   73 3/16
             4th   Quarter 1998                81 3/16                  72 1/8
</TABLE>

       As of December 31, 1999, there were approximately 1,800 holders of record
of the Company's common stock. The Company pays dividends only if, as and when
declared by its Board of Directors. No dividends were paid in 1999 and 1998. In
order to qualify as a REIT, the Company generally is required to distribute as a
dividend 95% of its taxable income. At December 31, 1999, the Company had net
operating loss carryovers ("NOL's") of approximately $158,000,000. Under the
Internal Revenue Code of 1986, as amended, the Company's NOL's generally would
be available to offset the amount of the Company's REIT taxable income that
otherwise would be required to be distributed as a dividend to stockholders.



                                      -11
<PAGE>   12

Item 6.  Selected Financial Data

         Summary of Selected Financial Data
         (Amounts in thousands, except per share data)

<TABLE>
<CAPTION>


                                                                                      Year Ended December 31,

                                              --------------------------------------------------------------------------------------
                                                1999              1998                1997                1996               1995
                                              --------------------------------------------------------------------------------------
<S>                                           <C>              <C>               <C>               <C>               <C>
Operating data:
     Total revenues                           $    64,390      $    51,663       $   25,369        $    21,833       $     14,761
                                              ===========      ===========       ==========        ===========       ============

Income (loss) from continuing
  operations                                  $     5,524(1)   $    (6,055)(2)   $    7,466 (3)    $    13,097  (4)  $     (7,696)

Income from discontinued
  operations                                           --               --               --             11,602             10,133
                                              -----------      -----------       ----------        -----------       ------------
Net income (loss)                             $     5,524      $    (6,055)      $    7,466        $    24,699       $      2,437
                                              ===========      ===========       ==========        ===========       ============

Income (loss) per common share: (5)
     Continuing operations                    $      1.10      $     (1.21)      $     1.49        $      2.62       $      (1.54)
     Discontinued operations                           --               --               --               2.32               2.03
                                              -----------       ----------       ----------        -----------       ------------
     Net income (loss) per share              $      1.10      $     (1.21)      $     1.49        $      4.94       $        .49
                                              ===========      ===========       ==========        ===========       ============

Balance sheet data:
     Total assets                             $   366,496      $   317,043       $  235,074        $   211,585       $    198,541
     Real estate                                  271,805          239,157          191,733            181,005            150,435
     Debt                                         329,161          277,113          208,087            192,347            182,883
     Stockholders' equity (deficiency)             12,498            6,974           13,029              5,563            (19,136)
</TABLE>

1. Net of $4,877,000 resulting from the write-off of the asset arising from the
straight-lining of rents primarily due to Caldor's rejection of its Flushing
lease in 1999.

2. Includes the write-off of $15,096,000 resulting from the
razing of the building formerly located at the Company's Lexington Avenue site.

3. Includes a gain of $8,914,000 from the condemnation of a portion of the
Paramus property net of the write-off of the carrying value of the building of
$5,786,000.

4. Includes income from the gain on reversal of the Company's postretirement
healthcare liability of $14,372,000.

5. Income (loss) per share is the same for all years' presented with and without
dilution. For further discussion of income (loss) per share see notes to the
consolidated financial statements.

                                      -12-

<PAGE>   13



Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations

OVERVIEW

       The Company had net income of $5,524,000 for the year ended December 31,
1999 as compared to net loss of $6,055,000 in the prior year. Net income for
1999 is net of $4,877,000 resulting from the write-off of the asset arising from
the straight-lining of rents primarily due to Caldor's rejection of its Flushing
lease in 1999. The net loss for 1998 includes the write-off of $15,096,000
resulting from the razing of the building formerly located at the Company's
Lexington Avenue site.

       Details of the changes in the components of net income are discussed in
the comparison of the years ended December 31, 1999 and December 31, 1998 below.

RESULTS OF OPERATIONS

       Years Ended December 31, 1999 and December 31, 1998

       The Company's revenues, which consist of property rentals, tenant expense
reimbursements and equity in income of unconsolidated joint venture (prior to
1999) were $64,390,000 in 1999, compared to $51,663,000 in 1998, an increase of
$12,727,000.

       Property rentals were $44,232,000 in 1999, compared to $35,151,000 in
1998, an increase of $9,081,000. This increase resulted from:

<TABLE>
<CAPTION>

                                                                    Effective
                                                                       Date
                                                               --------------------
 <S>                                                           <C>                          <C>
  Acquisition of the remaining 50%
        interest in the Kings Plaza Mall                       June 1998                     $   11,130,000
   Rent from new tenants                                       Various                            1,116,000
   Caldor's rejection of its Flushing lease                    April 1999                        (2,532,000)
   Closure of parking operations at the Lexington
        Avenue property                                                                            (633,000)
                                                                                             --------------
                                                                                             $    9,081,000
                                                                                             ==============
</TABLE>

       Tenant expense reimbursements were $20,158,000 in 1999, compared to
$13,993,000 in 1998, an increase of $6,165,000. This increase resulted primarily
from the acquisition of the remaining 50% interest in the Kings Plaza Mall and
the resulting consolidation of its operations after June 18, 1998.

       The decrease in equity in income of unconsolidated joint venture resulted
from the consolidation of the Mall's operations in 1998 as noted above.

       Operating expenses were $33,081,000 in 1999, compared to $20,132,000 in
1998, an increase of $12,949,000. Of this increase (i) $9,254,000 primarily
resulted from the acquisition of the remaining 50% interest in the Kings Plaza
Mall and the resulting consolidation of the Mall's operations after June 18,
1998 and (ii) $4,877,000 resulted from the write-off of the asset arising from
the straight-lining of rents primarily due to Caldor's rejection of its Flushing
lease in 1999, partially offset by a decrease in real estate tax, repairs and
maintenance and parking garage expenses.

       General and administrative expenses were $3,692,000 in 1999, compared to
$4,079,000 in 1998, a decrease of $387,000 primarily as a result of lower
professional fees.

       Depreciation and amortization expense was $5,441,000 in 1999 compared to
$4,289,000 in 1998, an increase of $1,152,000 primarily as a result of the
acquisition of the remaining 50% interest in the Kings Plaza Mall and the
resulting consolidation of its operations after June 18, 1998.

       In September 1998, the Company wrote-off $15,096,000 resulting from the
razing of the building formerly located at the Lexington Avenue site.



                                      -13-
<PAGE>   14

       Interest and debt expense was $17,647,000 in 1999, compared to
$15,115,000 in 1998, an increase of $2,532,000. This increase resulted primarily
from (i) higher average debt, partially offset by (ii) a decrease in the average
interest rate and (iii) an increase in capitalized interest relating to the
Company's development properties.

       Years Ended December 31, 1998 and December 31, 1997

       The Company's revenues, which consist of property rentals, tenant expense
reimbursements and equity in income of unconsolidated joint venture were
$51,663,000 in 1998, compared to $25,369,000 in 1997, an increase of
$26,294,000.

       Property rentals were $35,151,000 in 1998, compared to $18,455,000 in
1997, an increase of $16,696,000. This increase resulted from:

<TABLE>
<CAPTION>

                                                            Effective
                                                               Date
                                                           ------------
<S>                                                        <C>                <C>
    Rent from new tenants:
         Kings Plaza Regional Shopping Center              October 1997        $       4,440,000
         Rego Park I                                       March and
                                                           May 1997                    1,391,000
    Acquisition of the remaining 50%
         interest in the Mall                              June 1998                   4,564,000
    Consolidation of Mall
         operations previously recorded on
         the equity method                                 June 1998                   4,564,000
    Caldor's rejection of its Fordham
         Road lease                                        June 1997                  (1,609,000)
    Parking lot revenue                                                                2,749,000
    Other                                                                                597,000
                                                                               -----------------
                                                                               $      16,696,000
                                                                               =================
</TABLE>

       Tenant expense reimbursements were $13,993,000 in 1998, compared to
$2,668,000 in 1997, an increase of $11,325,000. This increase reflects (i)
corresponding increases in operating expenses passed through to tenants as a
result of leases commencing subsequent to March 31, 1997 at the Rego Park I
property, (ii) the commencement of operations of the Sears department store at
the Kings Plaza Regional Shopping Center and (iii) the acquisition of the
remaining 50% interest in the Mall and the resulting consolidation of its
operations after June 18, 1998.

       The decreases in equity in income of unconsolidated joint venture
resulted from the consolidation of the Mall's operations as noted above.

       Operating expenses were $20,132,000 in 1998, compared to $7,459,000 in
1997, an increase of $12,673,000. This increase resulted primarily from (i) real
estate taxes which previously had been capitalized, being charged to income due
to the commencement of operations of the Sears department store at the Kings
Plaza Regional Shopping Center and (ii) the acquisition of the remaining 50%
interest in the Mall and the resulting consolidation of the Mall's operations
after June 18, 1998, partially offset by (iii) a $667,000 charge to bad debt
expense in the prior year in connection with Caldor's rejection of its Fordham
Road lease.

       General and administrative expenses were $4,079,000 in 1998, compared to
$3,933,000 in 1997, an increase of $146,000.

       Depreciation and amortization expense increased in 1998, compared to 1997
as a result of the Kings Plaza Mall acquisition in June 1998 and the
commencement of operations at the Kings Plaza Regional Shopping Center in
October 1997.

       In September 1998, the Company wrote-off $15,096,000 resulting from the
razing of the building formerly located at its Lexington Avenue site.



                                      -14-
<PAGE>   15

       Interest and debt expense was $15,115,000 in 1998, compared to
$13,430,000 in 1997, an increase of $1,685,000. Of this increase $1,215,000
resulted from less interest capitalized in 1998 and $470,000 resulted from
higher average borrowings.

       Interest and other income was $993,000 in 1998, compared to $719,000 in
1997, an increase of $274,000. This increase resulted primarily from an increase
in interest income this year due to higher average investments.

       In October 1997, Alexander's entered into an agreement, in lieu of
condemnation, with the New Jersey Department of Transportation ("DOT") pursuant
to which the DOT agreed to buy approximately 9 acres from the Company located on
the periphery of its Paramus property for $14,700,000. In connection with this
agreement, the Company recorded a gain of $8,914,000 in the fourth quarter of
1997 which reflects the proceeds net of the write-off of the book value of the
building.

LIQUIDITY AND CAPITAL RESOURCES

       In the aggregate, Alexander's operating properties do not generate
sufficient cash flow to pay all of its expenses. The Company's three
non-operating properties (Lexington Avenue, Paramus, and Rego Park II) are in
various stages of development. As rents commence from portions of the
development property(s) and from the vacant property(s), the Company expects
that cash flow will become positive.

       In June, 1998, the Company increased its interest in the Kings Plaza Mall
(the "Mall") to 100% by acquiring Federated's 50% interest. The purchase price
was approximately $28,000,000, which was paid in cash, plus the Company agreed
to pay Federated $15,000,000 to renovate its Macy's store in the Mall
($12,103,000 has been paid as of January 31, 2000) and Federated agreed to
certain modifications to the Kings Plaza Operating Agreement. In connection with
the acquisition, the Company completed a $90,000,000 three-year mortgage loan.
The loan is collateralized by the Company's interest in the Kings Plaza Regional
Shopping Center and bears interest at LIBOR plus 1.25% (7.75% at December 31,
1999). In addition to funding the acquisition, the proceeds from the borrowing
were also used to repay $34,900,000 of debt. Further, on August 9, 1999 the
Company increased the availability under this mortgage loan by $30,000,000
($9,935,000 is outstanding as of January 31, 2000) of which $15,000,000 will be
used to partially fund a renovation of the Mall estimated to cost $33,000,000
($9,045,000 has been paid as of January 31, 2000) and $15,000,000 will be used
to pay the liability to Federated noted above. The renovations are expected to
be completed in 2000.

       The Company estimates that capital expenditure requirements for the
development of its Paramus property will approximate $100,000,000.

       The Company is currently undertaking the excavation and laying the
foundation for its Lexington Avenue property as part of the proposed development
of a large multi-use building. The proposed building is expected to be comprised
of a commercial portion, which may include a combination of retail stores,
offices, hotel space, extended stay residences, residential rentals and parking;
and a residential portion, consisting of condominium units to be sold to the
public. In connection therewith, the Company paid $14,500,000 for 140,000 square
feet of air rights of which $12,200,000 was paid to Vornado (Vornado's cost plus
$243,000 in interest and closing costs). The air rights were contracted for and
paid for in 1999, with closings to take place when the developments which give
rise to the air rights are completed in 2000. The capital required for the
proposed building will be in excess of $400,000,000.

       Because a REIT is not permitted to sell condominiums, the air rights
representing the residential portion of the property are being transferred to a
preferred stock affiliate, a corporation in which the Company owns all of the
preferred equity and none of the common equity. The transfer value will be
adjusted once the final size of the residential portion is determined.

       In the first quarter of 1999, Caldor closed all of its stores. Caldor
previously sub-leased its Flushing store from the Company. Caldor rejected the
Flushing lease effective March 29, 1999. The annual base rent under the lease
was $2,963,000.

       On May 12, 1999, the Company, through a newly formed wholly-owned
subsidiary, completed an $82,000,000 refinancing of its subsidiary's Rego Park I
property and repaid the then existing $75,000,000 debt on the property from the
proceeds of the new loan. The new 10-year debt, which is an obligation of the
subsidiary, matures in May 2009 and bears interest at 7.25%.

                                      -15-
<PAGE>   16

       The Company's $21,485,000 loan collateralized by a mortgage on its
Fordham Road property, which was scheduled to mature on February 24, 2000, has
been extended 60 days in connection with negotiations to extend the loan for an
additional three-years. The existing loan bears interest at LIBOR plus 4.25%
(10.73% at December 31, 1999). Beginning in 1998, all cash flow of the property
after debt service further amortizes the loan. There has been no further
amortization through December 31, 1999. Under the terms of the proposed
extension, interest accrues at LIBOR plus 1.50% in the first two years and
LIBOR plus 1.75% in year three. Interest will be payable at LIBOR for the
entire term. Interest accrued but not paid will be added to the outstanding
principal balance. The net carrying value of the Fordham Road property is
$4,602,000 at December 31, 1999.

       As of December 31, 1999, the Company has a loan payable to Vornado
aggregating $95,000,000, including $50,000,000 it borrowed from Vornado on
October 20, 1999. The Company used the proceeds from the additional $50,000,000
loan to fund a portion of the development costs at its Lexington Avenue property
and a portion of the costs to refurbish its Kings Plaza Regional Shopping
Center. The loan, which was scheduled to mature on March 15, 2000, has been
extended to March 15, 2001 and the interest rate has been reset from 14.18% per
annum to 15.72% per annum reflecting an increase in the underlying treasury
rate. The loan is secured by liens on all of the Company's assets and/or pledges
of the stock of subsidiaries owning the assets and/or guarantees of such
subsidiaries and the parent. The liens do not cover the Kings Plaza Regional
Shopping Center and Rego Park I and are subordinate to first mortgages and a
$20,000,000 bank term loan.

            A summary of maturities of debt at December 31, 1999 is as follows:

<TABLE>
<CAPTION>

           Year ending December 31,
           ------------------------
<S>                                                      <C>
                     2000                                    21,485,000
                     2001                                   210,676,000
                     2002                                            --
                     2003                                    15,000,000
                     2004                                       339,000
                                                        ---------------
                                                        $   247,500,000
                                                        ===============
</TABLE>

       The Company estimates that the fair market values of its assets are
substantially in excess of their historical cost and that it has additional
borrowing capacity. Alexander's continues to evaluate its needs for capital
which may be raised through (a) property specific or corporate borrowing, (b)
the sale of securities and (c) asset sales. Although there can be no assurance,
the Company believes that these cash sources will be adequate to fund cash
requirements until its operations generate adequate cash flow.

       CASH FLOWS

       Year Ended December 31, 1999

       Cash provided by operating activities of $9,765,000 was comprised of
income after adjustments for non-cash items of $8,921,000, net of the change in
operating assets and liabilities of $4,680,000. The adjustments for non-cash
items are comprised of depreciation and amortization of $7,460,000 and the
effect of straight-lining of rental income of $1,461,000.

       Net cash used in investing activities of $47,601,000 was primarily
comprised of (i) the escrowing of cash from the proceeds from the Kings Plaza
Regional Shopping Center which is restricted as to its use ($13,601,000), net of
the release of cash from escrow for the condemnation of a portion of the Paramus
property ($2,318,000) and (ii) capital expenditures of $36,318,000.

       Net cash provided by financing activities of $48,526,000 was comprised of
(i) proceeds from the issuance of debt of $137,676,000, offset by (ii)
repayments of debt of $85,628,000 and (iii) debt issuance costs of $3,522,000.

       Year Ended December 31, 1998

       Cash provided by operating activities of $5,461,000 was comprised of
income after adjustments for non-cash items of $10,327,000, net of the change in
operating assets and liabilities of $4,866,000. The adjustments for non-cash
items are comprised of (i) the write-off of the carrying value of the Lexington
Avenue building and related development costs of $15,096,000 and (ii)
depreciation and amortization of $5,715,000, offset by (iii) the effect of
straight-lining of rental income of $4,429,000.

       Net cash used in investing activities of $40,217,000 was primarily
comprised of (i) $28,000,000 for the

                                      -16-
<PAGE>   17

acquisition of the remaining 50% interest in the Kings Plaza Mall, (ii) the
escrowing of cash from the condemnation of a portion of the Paramus property
($2,318,000) and cash from the proceeds from the Kings Plaza Regional Shopping
Center loan ($5,212,000) which is restricted as to its use and (iii) capital
expenditures of $19,387,000, partially offset by (iv) proceeds from the
condemnation of a portion of the Paramus property of $14,700,000.

       Net cash provided by financing activities of $47,428,000 was comprised of
(i) proceeds from the issuance of debt on the Kings Plaza Regional Center of
$90,000,000, offset by (ii) repayments of debt of $39,236,000 and (iii) debt
issuance costs of $3,336,000.

       Year Ended December 31, 1997

       Cash used in operating activities of $1,454,000 was comprised of: (i) a
net loss from operations of $1,448,000 (net income of $7,466,000 less the net
gain from the Paramus condemnation of $8,914,000), (ii) a net change in
operating assets and liabilities of $2,353,000 and (iii) the payment of
liabilities of discontinued operations of $326,000, partially offset by (iv)
adjustments for non-cash items of $2,673,000. The adjustments for non-cash items
are comprised of depreciation and amortization of $4,494,000, partially offset
by the effect of straight-lining of rental income of $1,821,000.

       Net cash used in investing activities of $16,877,000 was comprised of
additions to real estate of $20,625,000, offset by the use of restricted cash of
$3,748,000.

       Net cash provided by financing activities of $15,542,000 was comprised of
proceeds from the issuance of debt (net of deferred debt expense) of
$16,468,000, offset by $926,000 of debt repayments.

                                      -17-

<PAGE>   18


Funds from Operations for the Years Ended December 31, 1999 and 1998

       Funds from operations were $9,896,000 in the year ended December 31,
1999, an increase of $2,222,000 over the prior year. The following table
reconciles funds from operations and net (loss) income:

<TABLE>
<CAPTION>

                                                                        1999                      1998
                                                                  -----------------        -----------------
<S>                                                               <C>                      <C>
   Net income (loss)                                              $       5,524,000        $      (6,055,000)
   Depreciation and amortization of
           real property                                                  5,441,000                4,289,000
   Straight-lining of property rentals
           for rent escalations                                          (3,740,000)              (4,102,000)
   Write-off of the asset arising from the
           straight-lining of rents                                       4,877,000                       --
   Leasing fees paid in excess
           of expense recognized                                         (2,206,000)              (1,994,000)
   Write-off of the carrying value of the
           Lexington Avenue buildings
           and related development costs                                         --               15,096,000
   Proportionate share of adjustments
           to equity in income of previously
           unconsolidated joint venture to
           arrive at funds from operations                                       --                  440,000
                                                                  -----------------        -----------------
                                                                  $       9,896,000        $       7,674,000
                                                                  =================        =================
</TABLE>

       Funds from operations does not represent cash generated from operating
activities in accordance with generally accepted accounting principles and is
not necessarily indicative of cash available to fund cash needs, which is
disclosed in the Consolidated Statements of Cash Flows for the applicable
periods. There are no material legal or functional restrictions on the use of
funds from operations. Funds from operations should not be considered as an
alternative to net income as an indicator of the Company's operating performance
or as an alternative to cash flows as a measure of liquidity. Management
considers funds from operations a relevant supplemental measure of operating
performance because it provides a basis for comparison among REITs; however,
funds from operations may not be comparable to similarly titled measures
reported by other REITs since the Company's method of calculating funds from
operations is different from that used by NAREIT. Funds from operations, as
defined by NAREIT, represents net income before depreciation and amortization,
extraordinary items and gains or losses on sales of real estate. Funds from
operations as disclosed above has been modified to adjust for the effect of
straight-lining of property rentals for rent escalations and leasing fee
expenses. Below are the cash flows provided by (used in) operating, investing
and financing activities:

<TABLE>
<CAPTION>

                                                     1999                      1998
                                             ------------------        ------------------
<S>                                          <C>                       <C>
    Operating activities                     $        9,765,000        $        5,461,000

    Investing activities                     $      (47,601,000)       $      (40,217,000)

    Financing activities                     $       48,526,000        $       47,428,000
</TABLE>

                                      -18-
<PAGE>   19

       Year 2000 Issues

       The Company is managed by Vornado. Vornado has advised the Company that
it has completed its Year 2000 remediation plan, which addressed all mission
critical systems. Vornado is not aware of any adverse effects of Year 2000
issues including the inability of a significant vendor to provide services to
the Company.

       Recently Issued Accounting Standards

       In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities". This statement establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It is
effective for all fiscal quarters of fiscal years beginning after June 15, 2000.
Because the Company does not currently utilize derivatives or engage in hedging
activities, management does not anticipate that implementation of this statement
will have a material effect on the Company's financial statements.

       In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 (SAB 101). SAB 101 provides clarification in
applying generally accepted accounting principles to revenue recognition in
financial statements including contingent rentals under leases. Management does
not anticipate that implementation of SAB 101 will have a material effect on the
Companies financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

       At December 31, 1999, the Company had $132,161,000 of variable rate debt
at a weighted average interest rate of 8.43% and $197,000,000 of fixed rate debt
bearing interest at a weighted average interest rate of 10.58%. A one percent
increase in the base used to determine the interest rate of the variable rate
debt would result in a $1,322,000 decrease in the Company's annual net income
($.26 per basic and diluted share).

Item 8. Financial Statements and Supplementary Data

<TABLE>
<CAPTION>

                          Index to Financial Statements

                                                                               Page
                                                                              Number
                                                                              -------
<S>                                                                             <C>
          Independent Auditors' Report                                          20

          Consolidated Balance Sheets at December 31, 1999 and 1998             21

          Consolidated Statements of Operations for the
                Years Ended December 31, 1999, 1998 and 1997                    23

          Consolidated Statements of Stockholders' Equity for the
                Years Ended December 31, 1999, 1998 and 1997                    24

          Consolidated Statements of Cash Flows for the
                Years Ended December 31, 1999, 1998 and 1997                    25

          Notes to Consolidated Financial Statements                            26

</TABLE>

Item 9.   Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure

      Not applicable.

                                      -19-
<PAGE>   20



INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders
  of Alexander's, Inc.
Saddle Brook, New Jersey

We have audited the accompanying consolidated balance sheets of Alexander's,
Inc. and Subsidiaries (the "Company") as of December 31, 1999 and 1998 and the
related consolidated statements of operations, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1999. Our
audits also included the financial statement schedules listed in the index at
Item 14(a)(2). These financial statements and financial statement schedules are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial statement schedules based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1999, and
1998, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1999 in conformity with generally
accepted accounting principles. Also, in our opinion, such financial statement
schedules, when considered in relation to the basic consolidated financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.



DELOITTE & TOUCHE LLP

Parsippany, New Jersey
March 8, 2000
(March 23, 2000 as to note 4)

                                      -20-

<PAGE>   21


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                  (amounts in thousands except share amounts)

<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------

                                                                                                December 31,
                                                                                   ------------------------------------

                                                                                         1999                   1998
                                                                                    ------------           ------------
<S>                                                                                 <C>                    <C>
ASSETS:
Real estate, at cost:
   Land                                                                             $     83,957           $     83,957
   Buildings, leaseholds and leasehold improvements                                      155,899                149,054
   Capitalized expenses and development costs                                             87,148                 57,675
                                                                                    ------------           ------------
      Total                                                                              327,004                290,686
   Less accumulated depreciation and amortization                                        (55,199)               (51,529)
                                                                                    ------------           -------------
Real estate, net                                                                         271,805                239,157

Cash and cash equivalents                                                                 26,053                 15,363
Restricted cash                                                                           20,685                  9,402
Accounts receivable, net of allowance for doubtful accounts
   of $314 and $841 in 1999 and 1998                                                       3,353                  3,303
Receivable arising from the straight-lining of rents, net                                 11,575                 13,036
Deferred lease and other property costs                                                   24,788                 27,921
Deferred debt expense                                                                      4,206                  2,693
Other assets                                                                               4,031                  6,168
                                                                                    ------------           ------------


TOTAL ASSETS                                                                        $    366,496           $    317,043
                                                                                    ============           ============

</TABLE>

                 See notes to consolidated financial statements

                                      -21-
<PAGE>   22


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS (continued)
                   (amounts in thousands except share amounts)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                      December 31,
                                                                                           ----------------------------------
                                                                                                1999                 1998
                                                                                           -------------        -------------
<S>                                                                                        <C>                  <C>
LIABILITIES AND STOCKHOLDERS' EQUITY:
Debt (including $95,000 and $45,000 due to Vornado Realty Trust in 1999 and 1998)          $     329,161        $     277,113
Amounts due to Vornado Realty Trust and its affiliate                                              3,821                5,840
Accounts payable and accrued expenses                                                             10,804               10,113
Other liabilities                                                                                 10,212               17,003
                                                                                           -------------        -------------
     TOTAL LIABILITIES                                                                           353,998              310,069
                                                                                           -------------        -------------

COMMITMENTS AND CONTINGENCIES


STOCKHOLDERS' EQUITY:
Preferred stock:  no par value; authorized, 3,000,000 shares;
     issued, none

Common stock:  $1.00 par value per share; authorized, 10,000,000 shares;
     issued, 5,173,450 shares                                                                      5,174                5,174
Additional capital                                                                                24,843               24,843
Deficiency                                                                                       (16,559)             (22,083)
                                                                                           -------------        -------------
                                                                                                  13,458                7,934
Less treasury shares, 172,600 shares at cost                                                        (960)                (960)
                                                                                           -------------        -------------
Total stockholders' equity                                                                        12,498                6,974
                                                                                           -------------        -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                 $     366,496        $     317,043
                                                                                           =============        =============
</TABLE>

                 See notes to consolidated financial statements


                                      -22-

<PAGE>   23


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                (amounts in thousands except per share amounts)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                                                                            Year Ended December 31,
                                                                               ---------------------------------------------------
                                                                                  1999                1998               1997
                                                                               ------------   ------------------   ---------------
<S>                                                                            <C>                <C>                 <C>
Revenues:
Property rentals                                                               $    44,232        $    35,151         $    18,455
Expense reimbursements                                                              20,158             13,993               2,668
Equity in income of unconsolidated joint venture                                        --              2,519               4,246
                                                                               -----------        -----------         -----------
Total revenues                                                                      64,390             51,663              25,369
                                                                               -----------        -----------         -----------

Expenses:
     Operating (including management fee of $1,342, $1,060 and $840
        to Vornado)                                                                 33,081             20,132               7,459
     General and administrative (including management
        fee of $2,160 to Vornado in each year)                                       3,692              4,079               3,933
     Depreciation and amortization                                                   5,441              4,289               2,714
                                                                               -----------        -----------         -----------
Total expenses                                                                      42,214             28,500              14,106
                                                                               -----------        -----------         -----------

Operating income                                                                    22,176             23,163              11,263

Interest and debt expense (including interest on loan
     from Vornado)                                                                 (17,647)           (15,115)            (13,430)
Interest and other income, net                                                         995                993                 719
Write-off resulting from the razing of the
     building formerly located at the Company's
     Lexington Avenue site                                                              --            (15,096)                 --
Net gain from condemnation proceedings                                                  --                 --               8,914
                                                                               -----------        -----------      --------------

NET INCOME (LOSS)                                                              $     5,524        $    (6,055)        $     7,466
                                                                               ===========        ===========         ===========

Net income (loss) per share (basic and diluted):                               $      1.10        $     (1.21)        $      1.49
                                                                               ===========        ===========         ===========
</TABLE>


                See notes to consolidated financial statements.

                                      -23-
<PAGE>   24


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                             (amounts in thousands)

--------------------------------------------------------------------------------


<TABLE>
<CAPTION>

                                        Common           Additional                                Treasury           Stockholders'
                                        Stock             Capital              Deficiency            Stock                Equity
                                   -----------          -----------          -------------        -----------         ------------
<S>                                <C>                  <C>                  <C>                  <C>                 <C>
Balance, January 1, 1997           $     5,174          $    24,843          $     (23,494)       $      (960)        $      5,563

Net income                                  --                   --                  7,466                 --                7,466
                                   -----------          -----------          -------------        -----------         ------------
Balance, December 31, 1997               5,174               24,843                (16,028)              (960)              13,029

Net loss                                    --                   --                 (6,055)                --               (6,055)
                                   -----------          -----------          -------------        -----------         ------------
Balance, December 31, 1998               5,174               24,843                (22,083)              (960)               6,974

Net income                                  --                   --                  5,524                 --                5,524
                                   -----------          -----------          -------------        -----------         ------------
Balance, December 31, 1999         $     5,174          $    24,843          $     (16,559)       $      (960)        $     12,498
                                   ===========          ===========          =============        ===========         ============

</TABLE>


                See notes to consolidated financial statements.

                                      -24-
<PAGE>   25


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (amounts in thousands)

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                        Year Ended December 31,
                                                                        ----------------------------------------------------------
                                                                             1999                  1998                  1997
                                                                        --------------         --------------       --------------
<S>                                                                     <C>                    <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                                       $        5,524         $       (6,055)      $        7,466
Adjustments to reconcile net income (loss) to
   net cash provided by (used in) operating activities:
   Depreciation and amortization (including debt
      issuance costs)                                                            7,460                  5,715                4,494
   Straight-lining of rental income, net                                        (3,416)                (4,429)              (1,821)
   Write-off of the asset arising from the straight-lining of rents              4,877                     --                   --
   Write-off resulting from the razing of the building
      formerly located at the Company's Lexington Avenue site                       --                 15,096                   --
   Net gain from condemnation proceedings                                           --                     --               (8,914)
Change in assets and liabilities:
   Accounts receivable                                                             (50)                (1,935)                (863)
   Distributions (less than) in excess of equity in income
        of unconsolidated joint venture                                             --                   (386)               2,002
   Amounts due to Vornado Realty Trust and its affiliate                        (2,019)                (1,048)              (1,905)
   Accounts payable and accrued expenses                                           691                  1,313                  (73)
   Other                                                                        (3,302)                (2,810)              (1,840)
                                                                        --------------         --------------       --------------
Net cash provided by (used in) operating activities                              9,765                  5,461               (1,454)
                                                                        --------------         --------------       --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate                                                       (36,318)               (19,387)             (20,625)
Cash restricted for construction financing                                     (13,601)                (5,212)               3,203
Cash made available (restricted) for operating liabilities                       2,318                 (2,318)                 545
Acquisition of Kings Plaza Mall, net of liabilities of $1,905                       --                (28,000)                  --
Collection of condemnation proceeds                                                 --                 14,700                   --
                                                                        --------------         --------------       --------------
Net cash used in investing activities                                          (47,601)               (40,217)             (16,877)
                                                                        --------------         --------------       --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of debt                                                               137,676                 90,000               16,667
Debt repayments                                                                (85,628)               (39,236)                (926)
Deferred debt expense                                                           (3,522)                (3,336)                (199)
                                                                        --------------         --------------       --------------
Net cash provided by financing activities                                       48,526                 47,428               15,542
                                                                        --------------         --------------       --------------

Net increase (decrease) in cash and cash equivalents                            10,690                 12,672               (2,789)
Cash and cash equivalents at the beginning of the
   year                                                                         15,363                  2,691                5,480
                                                                        --------------         --------------       --------------
Cash and cash equivalents at the end of the year                        $       26,053         $       15,363       $        2,691
                                                                        ==============         ==============       ==============


SUPPLEMENTAL INFORMATION

Cash payments for interest                                              $       24,990         $       21,553       $       20,729
                                                                        ==============         ==============       ==============
Capitalized interest                                                    $        9,352         $        7,864       $        9,079
                                                                        ==============         ==============       ==============
</TABLE>

      1998 amounts exclude an increase in real estate of $14,400 and debt of
$15,000 and a reduction in minority interest of $600 as a result of the Company
acquiring a partnership interest.


                See notes to consolidated financial statements.

                                      -25-
<PAGE>   26




                       ALEXANDER'S, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

1.  ORGANIZATION AND BUSINESS

       Alexander's Inc. (the "Company") is a real estate investment trust
("REIT") engaged in leasing, managing, developing and redeveloping properties.
Alexander's activities are conducted through its manager, Vornado Realty Trust
("Vornado").

       In the aggregate, Alexander's operating properties do not generate
sufficient cash flow to pay all of its expenses. The Company's three
non-operating properties (Lexington Avenue, Paramus, and Rego Park II) are in
various stages of development. As rents commence from portions of the
development properties and from the vacant property(s), the Company expects that
cash flow will become positive.

       The Company estimates that the fair market values of its assets are
substantially in excess of their historical cost, and that it has additional
borrowing capacity. Alexander's continues to evaluate its needs for capital,
which may be raised through (a) property specific or corporate borrowing, (b)
the sale of securities and (c) asset sales. Although there can be no assurance,
the Company believes that these cash sources will be adequate to fund cash
requirements until its operations generate adequate cash flow.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       Basis of Presentation -- The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiaries. All intercompany
accounts and transactions have been eliminated. Certain reclassifications to
prior year amounts have been made to conform with the current year's
presentation. The Company currently operates in one business segment.

       The consolidated financial statements are prepared in conformity with
generally accepted accounting principles. Management has made estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.

       Cash and Cash Equivalents -- The Company includes in cash and cash
equivalents both cash and short-term highly liquid investments purchased with
original maturities of three months or less. Cash and cash equivalents does not
include cash restricted for construction financing and operating liabilities
which is disclosed separately.

                                      -26-
<PAGE>   27


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

       Fair Value of Financial Instruments - All financial instruments of the
Company are reflected in the accompanying Consolidated Balance Sheets at amounts
which, in management's estimation, based upon an interpretation of available
market information and valuation methodologies (including discounted cash flow
analyses with regard to fixed rate debt) are considered appropriate, and
reasonably approximate their fair values. Such fair value estimates are not
necessarily indicative of the amounts that would be realized upon disposition of
the Company's financial instruments.

       Real Estate and Other Property - Real estate and other property is
carried at cost, net of accumulated depreciation. Depreciation is provided on
buildings and improvements on a straight-line basis over their estimated useful
lives ranging from four years to forty years. When real estate and other
property is undergoing development activities, all property operating expenses,
including interest expense, are capitalized to the cost of the real property to
the extent that management believes such costs are recoverable through the value
of the property.

       The Company's properties are reviewed for impairment if events or changes
in circumstances indicate that the carrying amount of the property may not be
recoverable. In such an event, a comparison is made of the current and projected
operating cash flows of each such property into the foreseeable future on an
undiscounted basis, to the carrying amount of such property. Such carrying
amount would be adjusted, if necessary, to reflect an impairment in the value of
the asset.

       Deferred Lease Expense - The Company capitalizes the costs incurred in
connection with obtaining long-term leases. Deferred lease expense is amortized
on the straight-line method over the initial terms of the leases.

       Deferred Finance and Debt Expense - The Company capitalizes the costs
incurred in connection with obtaining short-term or long-term debt or
refinancing existing debt. These costs are amortized on the straight-line method
over the initial terms of the debt, which approximates the interest method.

       Leases - All leases are operating leases whereby rents and reimbursements
of operating expenses are recorded as real estate operating revenue. The
straight-line basis is used to recognize rents under leases entered into which
provide for varying rents over the lease terms.

       Income Taxes - The Company operates in a manner intended to enable it to
continue to qualify as a real estate investment trust ("REIT") under sections
856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code").
Under the Code, the Company's net operating loss ("NOL") carryovers generally
would be available to offset the amount of the Company's REIT taxable income
that otherwise would be required to be distributed as a dividend to its
stockholders.

       The Company has reported NOL carryovers for federal tax purposes of
approximately $158,000,000 at December 31, 1999, expiring from 2005 to 2012. The
Company also has investment tax and targeted jobs tax credits of approximately
$3,000,000 expiring in 2002 through 2005.

       The net basis in the Company's assets and liabilities for tax purposes is
approximately $80,000,000 lower than the amount reported for financial statement
purposes.

       Amounts Per Share - Basic income (loss) per share excludes any dilutive
effects of options, warrants and convertible securities. Options outstanding
were not dilutive in any period.

       Stock Options - The Company accounts for stock-based compensation using
the intrinsic value method. Under the intrinsic value method compensation cost
is measured as the excess, if any, of the quoted market price of the Company's
stock at the date of grant over the exercise price of the option granted.
Compensation cost for stock

                                      -27-
<PAGE>   28


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

options, if any, is recognized ratably over the vesting period. The Company's
policy is to grant options with an exercise price equal to the quoted market
price of the Company's stock on the grant date. Accordingly, no compensation
cost has been recognized for the Company's stock option plans.

3.   ACQUISITION OF KINGS PLAZA MALL AND RELATED FINANCING TRANSACTIONS

       In June 1998, the Company increased its interest in the Kings Plaza Mall
(the "Mall") to 100% by acquiring Federated Department Store's ("Federated") 50%
interest. The purchase price was approximately $28,000,000, which was paid in
cash, plus the Company agreed to pay Federated $15,000,000 to renovate its
Macy's store in the Mall ($12,103,000 has been paid as of January 31, 2000) and
Federated agreed to certain modifications to the Kings Plaza Operating
Agreement. Prior to June 18, 1998, the Company owned a 50% interest in the Mall
and had accounted for this investment under the equity method. The acquisition
was recorded under the purchase method of accounting. The purchase cost was
allocated to the acquired assets and assumed liabilities based on the fair value
as of the closing date.

       In connection with the acquisition, the Company completed a $90,000,000
three-year mortgage loan. The loan is collateralized by the Company's interest
in the Kings Plaza Regional Shopping Center and bears interest at LIBOR plus
1.25% (7.75% at December 31, 1999). In addition to funding the acquisition, the
proceeds from the borrowing were also used to repay $34,900,000 of debt.
Further, on August 9, 1999 the Company increased the availability under this
mortgage by $30,000,000 ($9,935,000 is outstanding as of January 31, 2000) of
which $15,000,000 will be used to partially fund a renovation of the Mall
estimated to cost $33,000,000 ($9,045,000 has been paid as of January 31, 2000)
and $15,000,000 will be used to pay the liability to Federated noted above. The
renovations are expected to be completed in 2000.

       Set forth below is the unaudited pro forma condensed consolidated
operating data for the Company for the years ended December 31,
1998 and 1997 as if the acquisition of the Kings Plaza Mall and the related
financing transactions had occurred on January 1, 1997.

(Amounts in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                   Pro Forma For The Year Ended December 31
                                                                   ---------------------------------------
                                                                        1998                     1997
                                                                   ---------------         ---------------
<S>                                                                <C>                     <C>
       Revenues                                                    $        63,309         $        51,476
                                                                   ===============         ===============

       Net (loss) income                                           $        (2,859)        $        10,157
                                                                   ===============         ===============

       Net (loss) income per share - basic and diluted             $          (.57)        $          2.03
                                                                   ===============         ===============

</TABLE>


Summary financial information for the Kings Plaza Mall prior to the acquisition
is as follows:

<TABLE>
<CAPTION>

                                                                             For The Period From
                                                                               January 1, 1998                  Year Ended
                                                                               to June 17, 1998              December 31, 1997
                                                                               ----------------              ------------------
<S>                                                                           <C>                            <C>
        Operating revenue                                                     $       14,085,000             $       30,203,000
                                                                              ------------------             ------------------
        Operating costs                                                                8,481,000                     19,040,000
        Depreciation and amortization                                                    715,000                      1,418,000
        Interest expense                                                                 283,000                        710,000
                                                                              ------------------             ------------------
                                                                                       9,479,000                     21,168,000
                                                                              ------------------             ------------------
        Operating income                                                      $        4,606,000             $        9,035,000
                                                                              ==================             ==================
        Assets                                                                $       31,000,000                    $33,400,000
                                                                              ==================             ==================

        Liabilities                                                           $       12,300,000                    $15,200,000
                                                                              ==================             ==================
</TABLE>

                                      -28-
<PAGE>   29


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

4.      DEBT

        Debt comprises:

<TABLE>
<CAPTION>

                                                                               December 31,
                                                               -------------------------------------------
                                                                       1999                    1998
                                                               --------------------  ---------------------

<S>                                                            <C>                     <C>
           Term loan to Vornado (1)                             $       95,000,000      $       45,000,000

           Term loan to bank (1)                                        20,000,000              20,000,000

           First mortgage loan, secured by
              the Company's Kings Plaza
              Regional Shopping Center (2)                              95,676,000              90,000,000

           First mortgage loan secured by the Company's
              Rego Park I Shopping Center (3)                           82,000,000                      --

           First mortgage loan, secured by the
              Company's Fordham Road property (4)                       21,485,000              22,113,000


           Secured note (5)                                             15,000,000              15,000,000

           Construction loan, secured by the
              Company's Rego Park I property (3)                                --              75,000,000

           First mortgage loan, secured by
              Company's Paramus property                                        --              10,000,000
                                                                ------------------      ------------------
                                                                $      329,161,000      $      277,113,000
                                                                ==================      ==================
</TABLE>

(1)    On October 20, 1999, the Company increased its loan from Vornado by
       $50,000,000. The Company used the proceeds from the additional loan to
       fund a portion of the development costs at its Lexington Avenue property
       and a portion of the costs to refurbish its Kings Plaza Regional Shopping
       Center. The term loans which were scheduled to mature on March 15, 2000,
       have been extended to March 15, 2001. The interest rate on the Vornado
       loan has been reset from 14.18% to 15.72% reflecting an increase in the
       underlying treasury rate. The interest rate on the bank loan was reset
       from a fixed rate of 7.10% to a floating rate of LIBOR plus 1.85% (7.67%
       at December 31, 1999). The loans are secured by liens on all of the
       Company's assets and/or pledges of the stock of subsidiaries owning the
       assets and/or guarantees of such subsidiaries and the parent. The liens
       do not cover the Kings Plaza Regional Shopping Center and Rego Park I and
       are subordinate to first mortgages. The Vornado lien is subordinate to
       the bank's. The Vornado loan is prepayable quarterly without penalty.
       Under the terms of the loans, no dividends can be paid unless required to
       maintain Real Estate Investment Trust ("REIT") status.

                                      -29-
<PAGE>   30


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
(2)    The Company's mortgage loan, which is an obligation of a wholly-owned
       subsidiary, matures on June 1, 2001 and is secured by a mortgage on the
       Kings Plaza Regional Shopping Center and guaranteed by the Company. The
       loan bears interests at LIBOR plus 1.25% (7.75% at December 31, 1999).

(3)    The Company's $75,000,000 loan, collateralized by a mortgage on its Rego
       Park I property, was paid off on May 12, 1999, when the Company, through
       a newly formed wholly-owned subsidiary, completed an $82,000,000
       refinancing of its subsidiary's Rego Park I property. The new 10-year
       debt, which is an obligation of the subsidiary, matures in May 2009 and
       bears interest at 7.25%. Amortization of principal begins in July 2004 on
       a 30-year schedule.

(4)    The Company's $21,485,000 loan collateralized by a mortgage on its
       Fordham Road property, which was scheduled to mature on February 24,
       2000, has been extended 60 days in connection with negotiations to
       extend the loan for an additional three-years. The existing loan bears
       interest at LIBOR plus 4.25% (10.73% at December 31, 1999). Beginning in
       1998, all cash flow of the property after debt service further
       amortizes the loan. There has been no further amortization through
       December 31, 1999. Under the terms of the proposed extension, interest
       accrues at LIBOR plus 1.50% in the first two years and LIBOR plus 1.75%
       in year three. Interest will be payable at LIBOR for the entire term.
       Interest accrued but not paid will be added to the outstanding principal
       balance. The net carrying value of the Fordham Road property is
       $4,602,000 at December 31, 1999.

(5)    The note is secured by a third mortgage on the Lexington Avenue property.
       The note bears annual interest at Prime plus 1% (9.50% at December 31,
       1999) and is prepayable without penalty.

        A summary of maturities of debt at December 31, 1999, is as follows:

<TABLE>
<CAPTION>

           Year Ending December 31,
           ------------------------
<S>                                                     <C>
                     2000                                    21,485,000
                     2001                                   210,676,000
                     2002                                            --
                     2003                                    15,000,000
                     2004                                       339,000
                                                        ---------------
                                                        $   247,500,000
                                                        ===============
</TABLE>

       All of the Company's debt is secured by mortgages and/or pledges of the
stock of subsidiaries holding the properties. The net carrying value of real
estate collateralizing the debt amounted to $271,805,000 at December 31, 1999.


                                      -30-

<PAGE>   31


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

5.    LEASES

As Lessor

       The Company leases properties to tenants. The rental terms for the
properties leased range from 10 years to approximately 34 years. The leases
provide for the payment of fixed base rentals payable monthly in advance and for
the payment by the lessees of additional rents based on a percentage of the
tenants' sales as well as reimbursements of real estate taxes, insurance and
maintenance.

       Future base rental revenue under these noncancellable operating leases is
as follows:

<TABLE>
<CAPTION>


                   Year Ending                                   Total
                   December 31,                                 Amounts
             -----------------------                   -----------------------
<S>                                                    <C>
                      2000                             $       31,782,000
                      2001                                     29,870,000
                      2002                                     28,717,000
                      2003                                     29,251,000
                      2004                                     29,187,000
                   Thereafter                                 317,426,000

</TABLE>

        Included in operating expenses for the year ended December 31, 1999 is
$4,877,000 resulting from the write-off of the asset arising from the
straight-lining of rents primarily as a result of Caldor's rejection of its
Flushing lease in 1999.

       Sears accounted for 22%, 28% and 31% of the Company's consolidated
revenues for the years ended December 31, 1999, 1998, and 1997, respectively.
Caldor, a former tenant, accounted for 22% of the Company's consolidated
revenues in 1997. No other tenant accounted for more than 10% of revenues



                                      -31-

<PAGE>   32


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

As Lessee

       The Company is a tenant under a long-term leases. Future minimum lease
payments under the operating leases are as follows:

<TABLE>
<CAPTION>


                Year Ending                      Total
                 December 31,                   Amounts
           -----------------------       ---------------------
<S>                                   <C>
                    2000                 $         416,000
                    2001                           416,000
                    2002                           416,000
                    2003                           416,000
                    2004                           416,000
                 Thereafter                      5,679,000

</TABLE>

       Rent expense was $416,000, $376,000 and $331,000 for the years ended
December 31, 1999, 1998 and 1997, respectively.

6.     RELATED PARTY TRANSACTIONS

       Steven Roth is Chief Executive Officer and a Director of the Company, the
Managing General Partner of Interstate Properties ("Interstate") and Chairman
of the Board and Chief Executive Officer of Vornado. At December 31, 1999,
Interstate and its Partners own 27.3% of the outstanding common stock of the
Company and owns 15.0% of the outstanding common shares of beneficial interest
of Vornado. In addition, Mr. Roth owns 1.8% of the outstanding common shares of
beneficial interest of Vornado. Mr. Roth, Interstate and the other two general
partners of Interstate, David Mandelbaum and Russell B. Wight, Jr. (who are
also directors of the Company and trustees of Vornado) own, in the aggregate,
17.8% of the outstanding common shares of beneficial interest of Vornado.
Vornado owns 32% of the outstanding common stock of the Company.

       The Company is managed by and its properties are redeveloped and leased
by Vornado, pursuant to agreements with a one-year term expiring in March of
each year which are automatically renewable.

       The annual management fee payable by the Company to Vornado is equal to
the sum of (i) $3,000,000, (ii) 3% of the gross income from the Kings Plaza
Mall, plus (iii) 6% of development costs with minimum guaranteed fees of
$750,000 per annum. The leasing agreement provides for the Company to pay a fee
to Vornado equal to (i) 3% of the gross proceeds, as defined, from the sale of
an asset, and (ii) in the event of a lease or sublease of an asset, 3% of lease
rent for the first ten years of a lease term, 2% of lease rent for the eleventh
through the twentieth years of a lease term and 1% of lease rent for the
twenty-first through thirtieth year of a lease term. Subject to the payment of
rents by tenants, the Company owes Vornado $1,756,000 at December 31, 1999. Such
amount is payable annually in an amount not to exceed $2,500,000, until the
present value of such installments (calculated at a discount rate of 9% per
annum) equals the amount that would have been paid had it been paid on September
21, 1993, or at the time the transactions which gave rise to the Commissions
occurred, if later.

                                      -32-
<PAGE>   33


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
       The Company owes Vornado $95,000,000, the subordinated tranche of a
$115,000,000 secured financing. The Company incurred interest on the loan of
$7,857,000, $6,486,000 and $7,214,000 for the years ended December 31, 1999,
1998 and 1997, of which $5,171,000, $4,008,000 and $4,851,000 was capitalized.

7.     COMMITMENTS AND CONTINGENCIES

       The Company let a contract for $20,000,000 to undertake the excavation,
clearing and preparation of the Lexington Avenue property for the development of
a large multi-use building. As of January 31, 2000, $5,700,000 has been paid.

       In June 1997, the Kings Plaza Regional Shopping Center (the "Center"),
commissioned an Environmental Study and Contamination Assessment Site
Investigation (the Phase II "Study") to evaluate and delineate environmental
conditions disclosed in a Phase I study. The results of the Study indicate the
presence of petroleum and bis (2-ethylhexyl) phthalate contamination in the soil
and groundwater. The Company has delineated the contamination and has developed
a remediation approach. The New York State Department of Environmental
Conservation ("NYDEC") has not yet approved the finalization of the approach. In
1997, the Center accrued $1,500,000 for its estimated obligation with respect to
the clean up of the site, which includes costs of (i) remedial investigation,
(ii) feasibility study, (iii) remedial design, (iv) remedial action and (v)
professional fees. Based upon revised estimates the Company accrued an
additional $500,000 in the second quarter of 1999 ($727,000 has been paid as of
January 31, 2000). If the NYDEC insists on a more extensive remediation
approach, the Company could incur additional obligations.

       The majority of the contamination may have resulted from activities of
third parties; however, the sources of the contamination have not been fully
identified. Although the Company intends to pursue all available remedies
against any potentially responsible third parties, there can be no assurance
that such parties will be identified, or if identified, whether these
potentially responsible third parties will be solvent. In addition, the costs
associated with pursuing any potentially responsible parties may be cost
prohibitive. The Company has not recorded an asset as of December 31, 1999 for
potential recoveries of environmental remediation costs from other parties.

       Letters of Credit

       Approximately $900,000 in standby letters of credit were issued at
December 31, 1999.

8.     STOCK OPTION PLAN

       Under the Omnibus Stock Plan (the "Plan"), approved by the Company's
stockholders on May 22, 1996, directors, officers, key employees, employees of
Vornado Realty Trust and any other person or entity as designated by the Omnibus
Stock Plan Committee are eligible to be granted incentive share options and
non-qualified options to purchase common shares. Options granted are at prices
equal to 100% of the market price of the Company's shares at the date of grant,
vest on a graduated basis, becoming fully vested 60 months after grant and
expire ten years after grant. The Plan also provides for the award of Stock
Appreciation Rights, Performance Shares and Restricted Stock, as defined, none
of which have been awarded as of December 31, 1999.



                                      -33-

<PAGE>   34


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

       If compensation cost for Plan awards had been determined based on fair
value at the grant dates, net income and income per share would have been
reduced to the pro forma amounts below, for the years ended December 31, 1999,
1998 and 1997:

<TABLE>
<CAPTION>

                                                      1999                          1998                           1997
                                             ----------------------  ----------------------------  --------------------------
<S>                                          <C>                           <C>                            <C>
      Net income (loss):
                 As reported                 $        5,524,000            $       (6,055,000)            $        7,466,000
                 Pro forma                   $       (1,414,000)           $       (8,009,000)            $        5,512,000

      Net income (loss) per share
        applicable to common
        shareholders:
                 As reported                 $             1.10            $            (1.21)            $             1.49
                 Pro forma                   $             (.28)           $            (1.60)            $             1.10
</TABLE>

       The fair value of each option grant is estimated on the date of grant
using an option-pricing model with the following weighted-average assumptions
used for grants in the period ended December 31, 1999 (no options were granted
in the years ended December 31, 1998 and 1997):

<TABLE>
<CAPTION>

<S>                                          <C>
     Expected Volatility                            38%
     Expected Life                             10 years
     Risk-free interest rate                      6.45%
     Expected dividend yield                         0%

</TABLE>

       A summary of the Plan's status, and changes during the years ended
December 31, 1999 and 1998, are presented below:

<TABLE>
<CAPTION>

                                                        December 31, 1999                             December 31, 1998
                                          ---------------------------------------            ------------------------------------
                                                                                                                    Weighted-
                                                                 Weighted-Average                                    Average
                                              Shares              Exercise Price                 Shares           Exercise Price
                                          --------------         ---------------              -----------         ---------------
<S>                                       <C>                    <C>                          <C>                   <C>
Outstanding at January 1                         350,000         $         73.88                    350,000         $       73.88
Granted                                          605,000                   70.38                         --                    --
Exercised                                             --                      --                         --                    --
                                          --------------         ---------------                -----------         -------------

Outstanding at December 31                       955,000         $         71.66                    350,000         $       73.88
                                          ==============         ===============                ===========         =============
Weighted-average fair value of options
  granted (per option)                    $        40.81                                        $        --
                                          ==============                                        ===========
</TABLE>

       The following table summarizes information about options outstanding
under the Plan at December 31, 1999:

<TABLE>
<CAPTION>
<S>                                                                                <C>
       Options outstanding:
             Number outstanding at December 31, 1999                                      955,000
             Weighted-average remaining contractual life                                8.4 Years
             Weighted-average exercise price                                       $        71.66
       Options exercisable:
             Number exercisable at December 31, 1999                                      210,000
             Weighted-average exercise price                                       $        73.88

       Shares available for future grant at December 31, 1999 were 595,000.
</TABLE>

                                      -34-
<PAGE>   35


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

9.     INCOME (LOSS) PER SHARE

       The following table sets forth the computation of basic and diluted
income (loss) per share:

<TABLE>
<CAPTION>

                                                                                      December 31,
                                                               ------------------------------------------------------------
                                                                    1999                  1998                   1997
                                                               ---------------       ---------------        ---------------
<S>                                                            <C>                   <C>                    <C>
Numerator:
      Income (loss) from continuing operations                 $     5,524,000       $    (6,055,000)       $     7,466,000
                                                               ===============       ================       ===============

Denominator:
      Denominator for basic income (loss) per share -
           weighted average shares                                   5,000,850             5,000,850              5,000,850
      Effect of dilutive securities:
           Employee stock options                                       22,072                    --                  8,302
                                                               ---------------       ---------------        ---------------

      Denominator for diluted income (loss) per share -
      adjusted weighted average shares and
      assumed conversions                                            5,022,922             5,000,850             5,009,152
                                                               ===============       ===============        ==============

Basic and diluted income (loss) per share                           $     1.10             $   (1.21)              $  1.49
                                                                    ==========             =========               =======
</TABLE>
                                      -35-

<PAGE>   36


                       ALEXANDER'S, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------

10.   SUMMARY OF QUARTERLY RESULTS (UNAUDITED)
            (amounts in thousands except per share amounts)

<TABLE>
<CAPTION>

                                                   Year Ended                                        Year Ended
                                               December 31, 1999                                  December 31, 1998
                                 --------------------------------------------     ----------------------------------------------
                                                Quarter Ended                                       Quarter Ended
                                 --------------------------------------------     ----------------------------------------------
                                 Mar. 31    June 30    Sept. 30      Dec. 31      Mar. 31     June 30     Sept. 30       Dec. 31
<S>                              <C>        <C>        <C>           <C>          <C>         <C>         <C>           <C>
Total Revenues                   $16,623    $16,037    $ 15,947      $15,783      $8,007      $9,473      $ 16,201      $17,982
                                 =======    =======    ========      =======      ======      ======      ========      =======
Net income (loss)                $ 1,475    $ 2,336    $  1,635      $    78 (3)  $  922      $1,116      $(11,942)(2)  $ 3,849
                                 =======    =======    ========      =======      ======      ======      ========      =======

Income (loss) per common share
  (basic and diluted) (1)        $   .29    $   .47    $   .32       $   .02      $  .18      $  .22      $ (2.39)      $   .77
                                 =======    =======    ========      =======      ======      ======      =======       =======
</TABLE>

(1) The total for the year may differ from the sum of the quarters as a result
of weighting.

(2) In September 1998, the Company wrote-off $15,096,000 resulting from the
razing of the building formerly located at the Lexington Avenue site.

(3) Net of $4,877,000 resulting from the write-off of the asset arising from the
straight-lining of rents, primarily due to Caldor's rejection of its Flushing
lease in 1999, of which $1,877,000 was recognized in the fourth quarter of 1999.


                                      -36-

<PAGE>   37




                       ALEXANDER'S, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------------------------------
11.   SUBSEQUENT EVENT

       The Company is currently undertaking the excavation and laying the
foundation for its Lexington Avenue property as part of the proposed development
of a large multi-use building. The proposed building is expected to be comprised
of a commercial portion, which may include a combination of retail stores,
offices, hotel space, extended stay residences, residential rentals and parking;
and a residential portion, consisting of condominium units to be sold to the
public. In connection therewith, the Company paid $14,500,000 for 140,000 square
feet of air rights of which $12,200,000 was paid to Vornado (Vornado's cost plus
$243,000 in interest and closing costs). The air rights were contracted for and
paid for in 1999, with closings to take place when the developments which give
rise to the air rights are completed in 2000. The capital required for the
proposed building will be in excess of $400,000,000.

       Because a REIT is not permitted to sell condominiums, the air rights
representing the residential portion of the property are being transferred to a
preferred stock affiliate, a corporation in which the Company owns all of the
preferred equity and none of the common equity. The transfer value will be
adjusted once the final size of the residential portion is determined.


                                      -37-

<PAGE>   38



                                    PART III

Item 10. Directors and Executive Officers of the Registrant

       Information relating to directors and executive officers of the Company
will be contained in a definitive Proxy Statement involving the election of
directors which the Company will file with the Securities and Exchange
Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended, not later than 120 days after December 31, 1999, and such
information is incorporated herein by reference. Information relating to
Executive Officers of the Registrant appears on page 10 of this Annual Report on
Form 10-K.

Item 11. Executive Compensation

       Information relating to executive compensation will be contained in the
Proxy Statement referred to above in Item 10, "Directors and Executive Officers
of the Registrant", and such information is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management

       Information relating to security ownership of certain beneficial owners
and management will be contained in the Proxy Statement referred to in Item 10,
"Directors and Executive Officers of the Registrant", and such information is
incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions

       Information relating to certain relationships and related transactions
will be contained in the Proxy Statement referred to in Item 10, "Directors and
Executive Officers of the Registrant", and such information is incorporated
herein by reference.


                                      -38-

<PAGE>   39



                                     PART IV

ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

       (a)    Documents filed as part of this Report

              1.     The consolidated financial statements are set forth in Item
                     8 of this Annual Report on Form 10-K.

              2.     Financial Statement Schedules.

       The following financial statement schedules should be read in conjunction
with the financial statements included in item 8 of this Annual Report on Form
10-K.

<TABLE>
<CAPTION>
                                                                      Pages in this
                                                                      Annual Report
                                                                      on Form 10-K
                                                                      -------------

Schedule III - Real Estate and Accumulated Depreciation                   41
<S>                                                                   <C>

</TABLE>

       All other consolidated financial schedules are omitted because they are
inapplicable, not required, or the information is included elsewhere in the
consolidated financial statements or the notes thereto.

              3.     Exhibits

                     See Exhibit Index on page 43

       (b)    Reports on Form 8-K

       During the last quarter of the period covered by this Annual Report on
Form 10-K, no reports on Form 8-K were filed.


                                      -39-

<PAGE>   40


                                   SIGNATURES

            Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                         ALEXANDER'S, INC.

                                         By:      /s/ Joseph Macnow
                                             ----------------------------------
                                                  Joseph Macnow, Vice President,
                                                  Chief Financial Officer

                                         Date:    March 7, 2000
                                             ----------------------------------

       Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

     Signature                                     Title                                   Date
     ---------                                    ------                                   ----
<S>                                  <C>                                               <C>
/s/ Steven Roth                      Chief Executive Officer and Director                March 7, 2000
--------------------------
Steven Roth                          (Principal Executive Officer)


/s/ Thomas R. DiBenedetto            Director                                            March 7, 2000
--------------------------
Thomas R. DiBenedetto

/s/ Michael D. Fascitelli            Director                                            March 7, 2000
--------------------------
Michael D. Fascitelli

/s/ David Mandelbaum                 Director                                            March 7, 2000
------------------------
David Mandelbaum

/s/  Stephen Mann                    Director                                            March 7, 2000
--------------------------
Stephen Mann

/s/ Arthur I. Sonnenblick            Director                                            March 7, 2000
--------------------------
Arthur I. Sonnenblick

/s/ Neil Underberg                   Director                                            March 7, 2000
------------------------
Neil Underberg

/s/ Richard West                     Director                                            March 7, 2000
--------------------------
Richard West

/s/ Russell B. Wight, Jr.            Director                                            March 7, 2000
--------------------------
Russell B. Wight, Jr.
</TABLE>

                                      -40-

<PAGE>   41



                       ALEXANDER'S, INC. AND SUBSIDIARIES
            SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                               DECEMBER 31, 1999
                             (amounts in thousands)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                           Column A           Column B           Column C             Column D                      Column E
----------------------------------------------------------------------------------------------------------------------------------

                                                                                                                    Gross Amount
                                                                  Initial                                            at which
                                                                  Cost to                                            Carried at
                                                                Company (2)                                       Close of Period-
                                                                 Building,              Cost                         Buildings,
                                                                Leaseholds           Capitalized                      Leasehold
                                                               and Leasehold        Subsequent to                  and Leaseholds
      Description       Encumbrances           Land             Improvements        Acquisition(3)      Land        Improvements
----------------------------------------------------------------------------------------------------------------------------------

<S>                        <C>               <C>                <C>                    <C>             <C>              <C>
Commercial Property:
New York City,
  New York:
Fordham Rd.                $   21,485        $ 2,301            $    9,258                     --      $ 2,301          $    9,258
Third Avenue                       --          1,201                 4,437                     --        1,201               4,437
Rego Park I                    82,000          1,647                 8,953             $   57,314        1,647              66,267
Rego Park II                       --          3,906                 1,467                    433        3,906               1,566
Flushing                           --             --                 1,660                     --           --               1,660
Lexington Ave.                 15,000         14,432                12,355                 94,338       48,379                  --
Flatbush Ave.
 and Avenue U                  95,676            497                 9,542                 85,351       24,483              70,907
                               ------        -------            ----------             ----------      -------          ----------

Total New York                214,161         23,984                47,672                237,436       81,917             154,095


New Jersey - Paramus               --          1,441                    --                 10,444        1,441                  --

Other Properties                   --            599                 1,804                  3,624          599               1,804
                                             -------            ----------             ----------      -------          ----------

Other secured debt            115,000  (1)
                              -------

TOTAL                      $  329,161        $26,024            $   49,476             $  251,504      $83,957          $  155,899
                           ==========        =======            ==========             ==========    =========     ===============
</TABLE>





<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                Column F         Column G        Column H              Column I     Column J
------------------------------------------------------------------------------------------------------------------------------------




                                Capitalized
                                  Expenses                        Accumulated                                        Life on Which
                                  and Pre-                       Depreciation                                        Latest Income
                                development                           and            Date of            Date          Statement is
      Description                  Costs           Total(3)      Amortization      Construction     Acquired (2)         Computed
------------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>               <C>              <C>                  <C>             <C>         <C>
Commercial Property:
New York City,

  New York:

Fordham Rd.                               --        $  11,559        $   6,957            1933            1992        4-40 years
Third Avenue                              --            5,638            3,156            1928            1992        13 years
Rego Park I                               --           67,914           13,936            1959            1992        6-40 years
Rego Park II                       $     334            5,806            1,456            1965            1992        5-39 years
Flushing                                  --            1,660            1,660            1975(4)         1992        10-22 years
Lexington Ave.                        72,746          121,125               --              --            1992        --
Flatbush Ave.

 and Avenue U                             --           95,390           26,228            1970            1992        10-40 years
                                   ---------        ---------        ---------

Total New York                        73,080          309,092           53,393


New Jersey - Paramus                  10,444           11,885               --              --            1992        --

Other Properties                       3,624            6,027            1,806            Various         1992        7-25 years
                                   ---------        ---------        ---------

Other secured debt


TOTAL                              $  87,148        $ 327,004        $  55,199
                                   =========        =========        =========
</TABLE>


(1) The loans, which were scheduled to mature in March 2000, have been extended
to March 2001. The loans are secured by liens on all of the Company's assets
and/or pledges of the stock of subsidiaries owning the assets and/or guarantees
of such subsidiaries and the parent, except for the Kings Plaza Regional
Shopping Center and Rego Park I. These liens are subordinate to first mortgages.

(2) Initial cost is as of May 15, 1992 (the date on which the Company commenced
real estate operations) unless acquired subsequent to that date. See Column J.

(3) The net basis in the Company's assets and liabilities for tax purposes is
approximately $80,000,000 lower than the amount reported for financial statement
purposes.

(4) Date represents lease acquisition date.


                                      41
<PAGE>   42



                       ALEXANDER'S, INC. AND SUBSIDIARIES

            SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
                             (amounts in thousands)

<TABLE>
<CAPTION>


                                                                       December 31,
                                                         ----------------------------------------
                                                                 1999                 1998
                                                         -----------------      -----------------
<S>                                                         <C>                   <C>
REAL ESTATE:

Balance at beginning of period                              $      290,686        $      216,346
Additions during the period:
     Buildings, leaseholds and
      leasehold improvements                                         6,846                18,072
Acquisition of remaining 50% interest in the
     Kings Plaza Mall (the "Acquisition")                               --                29,905
Reclassification of 50% investment of joint venture
     due to the Acquisition                                             --                29,498

Capitalized expenses and development costs                          29,472                15,715
                                                            --------------        --------------
                                                                   327,004               309,536
Less: Write-off of the Lexington Avenue buildings                       --               (18,850)
                                                            --------------        --------------

Balance at end of period                                    $      327,004        $      290,686
                                                            ==============        ==============

ACCUMULATED DEPRECIATION:

Balance at beginning of period                              $       51,529        $       35,224


Reclassification of 50% investment of joint venture
     due to the Acquisition                                             --                16,955

     Additions charged to operating
      expenses                                                       3,670                 3,104
                                                            --------------        --------------
                                                                    55,199                55,283
Less: Write-off of the Lexington Avenue buildings                       --                (3,754)
                                                            --------------        --------------

Balance at end of period                                    $       55,199        $       51,529
                                                            ==============        ==============
</TABLE>


                                      -42-
<PAGE>   43



                               Index to Exhibits

            The following is a list of all exhibits filed as part of this
Report:

<TABLE>
<CAPTION>

Exhibit No.              Document
-----------              --------
<S>                      <C>                                                                                              <C>
3(i)                     Certificate of Incorporation, as amended.  Incorporated herein by reference                       *
                         from Exhibit 3.0 to the Registrant's Current Report on Form 8-K dated
                         September 21, 1993.

3(ii)                    By-laws, as amended.  Incorporated herein by reference from Exhibit 3.1                           *
                         to the Registrants Form 10-Q for the quarter ended September 30, 1996.


10(i)(A)(1)              Agreement, dated as of December 4, 1985, among Seven                                              *
                         Thirty One Limited Partnership ("731 Limited
                         Partnership"), Alexander's Department Stores of
                         Lexington Avenue, Inc., the Company, Emanuel Gruss,
                         Riane Gruss and Elizabeth Goldberg (collectively, the
                         "Partners"). Incorporated herein by reference from
                         Exhibit 10(i)(F)(1) to the
                         Registrant's Form 10-K for the fiscal year ended July 26, 1986.

10(i)(A)(2)              Amended and Restated Agreement of Limited Partnership                                             *
                         in the 731 Limited Partnership, dated as of August 21,
                         1986, among the Partners. Incorporated herein by
                         reference from Exhibit 1 to the Registrant's
                         Current Report on Form 8-K, dated August 21, 1986.

10(i)(A)(3)              Third Amendment to Amended and Restated Agreement of                                              *
                         Limited Partnership dated December 30, 1994, among the
                         Partners. Incorporated herein by reference from Exhibit
                         10(i)(A)(3) to the Registrant's Form 10-K for the
                         fiscal year ended December 31, 1994.

10(i)(B)(1)              Promissory Note Modification Agreement, dated October 4, 1993, between                            *
                         Alexander's Department Stores of New Jersey, Inc. and New York Life
                         Insurance Company ("New York Life").  Incorporated herein by reference
                         from Exhibit 10(i)(3)(a) to the Registrant's Form 10-K for the Transition
                         Period August 1, 1993 to December 31, 1993.

10(i)(B)(2)              Mortgage Modification Agreement, dated October 4, 1993, by Alexander's                            *
                         Department Stores of New Jersey, Inc. and New York Life Incorporated
                         herein by reference from Exhibit 10(i)(E)(3)(a) to the Registrant's
                         Form 10-K for the Transition Period August 1, 1993 to December 31, 1993.

10(i)(C)                 Credit Agreement, dated March 15, 1995, among the                                                 *
                         Company and Vornado Lending Corp. Incorporated herein
                         by reference from Exhibit 10(i)(C) to the Registrant's
                         Form 10-K for the fiscal year ended December 31, 1994.

10(i)(D)                 Credit Agreement, dated March 15, 1995, among the                                                 *
                         Company and First Union Bank, National Association.
                         Incorporated herein by reference from Exhibit 10(i)(D)
                         to the Registrant's Form 10-K for the fiscal
                         year ended December 31, 1994.
</TABLE>
-----------------------------------
*     Incorporated by reference


                                      -43-



<PAGE>   44

<TABLE>
<CAPTION>

Exhibit No.              Document
-----------              --------
<S>                      <C>                                                                                              <C>

10(i)(E)                 Building Loan Agreement, dated as of March 29, 1995,                                              *
                         among the Company, Union Bank of Switzerland ("UBS")
                         (New York Branch), as Lender, and UBS (New York
                         Branch), as Agent. Incorporated by reference from
                         Exhibit 10(i)(E) to the Registrant's Form 10-K for
                         the fiscal year ended December 31, 1994.

10(i)(F)                 Project Loan Agreement, dated as of March 29,1995,                                                *
                         among the Company, UBS (New York Branch), as Lender,
                         and UBS (New York Branch), as Agent. Incorporated
                         herein by reference from Exhibit 10(i)(F) to the
                         Registrant's Form 10-K for the fiscal year ended December 31, 1994.

10(i)(G)(1)              Real Estate Retention Agreement dated as of July 20,                                              *
                         1992, between Vornado Realty Trust and Keen Realty
                         Consultants, Inc., each as special real estate
                         consultants, and the Company. Incorporated herein by
                         reference from Exhibit 10(i)(O) to the Registrant's
                         Form 10-K for the fiscal year ended July 25, 1992.

10(i)(G)(2)              Extension Agreement to the Real Estate Retention                                                  *
                         Agreement, dated as of February 6, 1995, between the
                         Company and Vornado Realty Trust. Incorporated herein
                         by reference from Exhibit 10(i)(G)(2) to the
                         Registrant's Form 10-K for the fiscal year ended
                         December 31, 1994.

10(i)(H)                 Management and Development Agreement, dated as of                                                 *
                         February 6, 1995, between Vornado Realty Trust and the
                         Company, on behalf of itself and each subsidiary listed
                         therein. Incorporated herein by reference from Exhibit
                         10.1 to the Registrant's Current Report on Form 8-K dated
                         February 6, 1995.

10(i)(I)                 Commitment letter, dated as of February 6, 1995,                                                  *
                         between Vornado Realty Trust and the Company.
                         Incorporated herein by reference from Exhibit 10.3 to
                         the Registrant's Current Report on Form 8-K dated
                         February 6, 1995.

10(ii)(A)(1)             Agreement of Lease, dated April 22, 1966, between S&E                                             *
                         Realty Company and Alexander's Department Stores of
                         Valley Stream, Inc. Incorporated herein by reference
                         from Exhibit 13N to the Registrant's Registration Statement
                         on Form S-1 (Registration No. 2-29780).

10(ii)(A)(2)             Guarantee, dated April 22, 1966, of the Lease described                                           *
                         as Exhibit 10(ii)(A)(1) above by Alexander's Department
                         Stores, Inc. Incorporated herein by reference from
                         Exhibit 13N(1) to the Registrant's Registration Statement
                         on Form S-1 (Registration No. 2-29780).

10(ii)(A)(3)             Agreement of Lease for Rego Park, Queens, New York, between                                       *
                         Alexander's, Inc. and Sears Roebuck & Co.  Incorporated herein by
                         reference from Exhibit 10.1 to the Registrant's Quarterly Report on
                         Form 10-Q for the fiscal quarter ended March 31, 1994.

-----------------------------------
*     Incorporated by reference
</TABLE>

                                      -44-
<PAGE>   45
<TABLE>
<CAPTION>

Exhibit No.              Document
-----------              --------
<S>                      <C>                                                                                              <C>

10(ii)(A)(4)(a)          Lease for Roosevelt Avenue, Flushing, New York, dated                                             *
                         as of December 1, 1992, between the Company, as
                         landlord, and Caldor, as tenant. Incorporated herein by
                         reference from Exhibit 10(ii)(E)(7) to the Registrant's Form
                         10-K for the fiscal year ended July 25, 1992.

10(ii)(A)(4)(b)          First Amendment to Sublease for Roosevelt Avenue,                                                 *
                         Flushing, New York, dated as of February 22, 1995
                         between the Company, as sublandlord, and Caldor, as
                         tenant. Incorporated herein by reference from Exhibit
                         10(ii)(A)(8)(b) to the Registrant's Form 10-K for the
                         fiscal year ended December 31, 1994.

10(ii)(A)(5)             Lease Agreement, dated March 1, 1993 by and between the                                           *
                         Company and Alex Third Avenue Acquisition Associates.
                         Incorporated by reference from Exhibit 10(ii)(F) to the
                         Registrant's Form 10-K for the fiscal year ended July 31, 1993.

10(ii)(A)(6)             Agreement of Lease for Rego Park, Queens, New York,                                               *
                         between the Company and Marshalls of Richfield, MN.,
                         Inc., dated as of March 1, 1995. Incorporated herein by
                         reference from Exhibit 10(ii)(A)(12)(a) to the Registrant's
                         Form 10-K for the fiscal year ended December 31, 1994.

10(ii)(A)(7)             Guaranty, dated March 1, 1995, of the Lease described                                             *
                         in Exhibit 10(ii)(A)(12)(a) above by the Company.
                         Incorporated herein by reference from Exhibit
                         10(ii)(A)(12)(b) to the Registrant's Form 10-K for the
                         fiscal year ended December 31, 1994.

10(iii)(B)               Employment Agreement, dated February 9, 1995, between                                             *
                         the Company and Stephen Mann. Incorporated herein by
                         reference from Exhibit 10(iii)(B) to the Registrant's
                         Form 10-K for the fiscal year ended December 31, 1994.

12                       Consolidated Ratios of Earnings to Fixed Charges and Combined Fixed
                         Charges and Preferred Stock Dividend Requirements.

</TABLE>




-----------------------------------
*     Incorporated by reference

                                      -45-

<PAGE>   46
EXHIBIT NO.                          DOCUMENT
------------             -------------------------------
13                       Not applicable.

16                       Not applicable.

18                       Not applicable.

19                       Not applicable.

21                       Subsidiaries of Registrant.

22                       Not applicable.

23                       Consent by Deloitte & Touche LLP.

25                       Not applicable.

27                       Financial Data Schedule.

29                       Not applicable.



                                      -46-