Vornado Announces Third Quarter 2006 FFO of $1.31 per share.

PARAMUS, N.J. -- VORNADO REALTY TRUST (New York Stock Exchange: VNO) today reported:

Third Quarter 2006 Results

NET INCOME applicable to common shares for the quarter ended September 30, 2006 was $113.6 million, or $0.76 per diluted share, versus $27.2 million, or $0.19 per diluted share, for the quarter ended September 30, 2005. Net income for the three months ended September 30, 2006 includes a net loss of $40.7 million from our investment in Toys "R" Us ("Toys") and a $10.8 million net gain on sale of real estate. Net income for the three months ended September 30, 2005 includes a net loss of $0.5 million from our investment in Toys and a $3.5 million net gain on sale of real estate. Net income for the three months ended September 30, 2006 and 2005 also include certain other items that affect comparability which are listed in the table below. The aggregate of these items, the net gains on sales of real estate and our share of Toys' net loss, net of minority interest, increased net income applicable to common shares for the quarter ended September 30, 2006 by $14.9 million, or $0.10 per diluted share and decreased net income applicable to common shares for the quarter ended September 30, 2005 by $58.7 million, or $0.41 per diluted share.

FUNDS FROM OPERATIONS applicable to common shares plus assumed conversions ("FFO") for the quarter ended September 30, 2006 was $204.5 million, or $1.31 per diluted share, compared to $93.3 million, or $0.65 per diluted share, for the quarter ended September 30, 2005. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the quarters ended September 30, 2006 and 2005 were $192.0 million and $154.1 million, or $1.23 and $1.07 per share, respectively.

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Nine Months Ended September 30, 2006 Results

Net income applicable to common shares for the nine months ended September 30, 2006 was $397.2 million, or $2.66 per diluted share, versus $387.4 million, or $2.79 per diluted share, for the nine months ended September 30, 2005. Net income for the nine months ended September 30, 2006 includes $4.2 million of income from our investment in Toys and $43.5 million of net gains on sales of real estate, as well as certain items that affect comparability which are listed in the table below. Net income for the nine months ended September 30, 2005 includes a net loss of $0.5 million from our investment in Toys and $35.3 million of net gains on sale of real estate, as well as certain items that affect comparability which are listed in the table below. The aggregate of these items, net gains on sale of real estate and our share of earnings from Toys, net of minority interest, increased net income applicable to common shares for the nine months ended September 30, 2006 by $114.9 million, or $0.77 per diluted share, and increased net income applicable to common shares for the nine months ended September 30, 2005 by $92.2 million, or $0.66 per diluted share.

FFO for the nine months ended September 30, 2006 was $646.9 million, or $4.17 per diluted share, compared to $563.4 million, or $3.95 per diluted share, for the prior year's nine months. Adjusting FFO for certain items that affect comparability which are listed in the table below, FFO for the nine months ended September 30, 2006 and 2005 were $544.2 million and $499.1 million, or $3.51 and $3.50 per share, respectively.

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Supplemental Financial Information

Further details regarding the Company's results of operations, properties and tenants can be accessed at the Company's website www.vno.com. Vornado Realty Trust is a fully - integrated equity real estate investment trust.

Certain statements contained herein may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks associated with the timing of and costs associated with property improvements, financing commitments and general competitive factors.

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FFO is computed in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"). NAREIT defines FFO as net income or loss determined in accordance with Generally Accepted Accounting Principles ("GAAP"), excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus specified non-cash items, such as real estate asset depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FFO and FFO per diluted share are used by management, investors and industry analysts as supplemental measures of operating performance of equity REITs. FFO and FFO per diluted share should be evaluated along with GAAP net income and income per diluted share (the most directly comparable GAAP measures), as well as cash flow from operating activities, investing activities and financing activities, in evaluating the operating performance of equity REITs. Management believes that FFO and FFO per diluted share are helpful to investors as supplemental performance measures because these measures exclude the effect of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs which implicitly assumes that the value of real estate diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, these non-GAAP measures can facilitate comparisons of operating performance between periods and among other equity REITs. FFO does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs as disclosed in the Company's Consolidated Statements of Cash Flows. FFO 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. In addition to FFO, the Company also discloses FFO before certain items that affect comparability. Although this non-GAAP measure clearly differs from NAREIT's definition of FFO, the Company believes it provides a meaningful presentation of operating performance. A reconciliation of net income to FFO is provided above. In addition, a reconciliation of FFO to FFO before certain items that affect comparability is provided on page 1 and 2 of this press release.