Vornado Realty Trust Second Quarter 2005 Results.

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

Second Quarter 2005 Results

NET INCOME applicable to common shares for the quarter ended June 30, 2005 was $172.7 million, or $1.25 per diluted share, versus $158.4 million, or $1.21 per diluted share, for the quarter ended June 30, 2004. Net income for the three months ended June 30, 2005 includes a $31.6 million net gain on sale of 400 N. LaSalle Residential Tower, as well as certain items that affect comparability which are listed in the table below. Net income for the three months ended June 30, 2004 includes a $65.9 million net gain on sale of the Palisades Residential Complex in Fort Lee, New Jersey, as well as certain items that affect comparability which are listed in the table below. These items net of minority interest, increased net income by $72.9 or $.51 per diluted share for the quarter ended June 30, 2005 and increased net income by $56.7 million or $.43 per diluted share in the prior year's quarter.

FUNDS FROM OPERATIONS applicable to common shares plus assumed conversions (FFO)(1) for the quarter ended June 30, 2005 was $215.8 million(1), or $1.51 per diluted share, compared to $159.7 million(1), or $1.22 per diluted share, for the prior year's quarter. Adjusting FFO for certain items that affect comparability, second quarter 2005 FFO is 2.4% lower than second quarter 2004 on a per share basis, as detailed below:

FOR THE THREE MONTHS ENDED
                                 -------------------------------------
(Amounts in thousands, except per  June 30, 2005      June 30, 2004
 share amounts)
                                 ----------------- -------------------
                                  Amount  Per Share Amount  Per Share
                                 -------- -------- -------- ----------
FFO as shown above (1)           $215,802 $   1.51 $159,674 $    1.22
                                          =========         ==========
Adjustments:
 Income from mark-to-market of
  Sears Holdings derivative
  position                        (37,860)               --
 Income from mark-to-market of
  GMH Communities LP warrants     (12,741)               --
 Net gain on sale of Alexander's
  condominiums                     (5,541)               --
 Impairment losses of partially-
  owned entities                    3,520             5,975
 Alexander's stock appreciation
  rights compensation expense       2,034             2,171
 Net gain on sale of Newkirk MLP
  option units                         --            (7,494)
 Limited partners' share of above
  adjustments                       5,694               (86)
                                 --------          --------
FFO, as adjusted for
 comparability                   $170,908 $   1.20 $160,240 $    1.23
                                 ======== ======== ======== ==========

(1) See page 4 for a reconciliation of net income applicable to common
    shares to FFO for the quarters ended June 30, 2005 and 2004.

First Half 2005 Results

Net income applicable to common shares for the six months ended June 30, 2005 was $360.1 million, or $2.63 per diluted share, versus $232.9 million, or $1.81 per diluted share, for the six months ended June 30, 2004. Net income for the six months ended June 30, 2005 includes a $31.6 million net gain on sale of 400 N. LaSalle, as well as certain items that affect comparability which are listed in the table below. Net income for the six months ended June 30, 2004 includes (i) a $65.9 million net gain on sale of the Palisades Residential Complex in Fort Lee, New Jersey, (ii) the Company's $2.8 million share of net gains on sale of real estate of partially-owned entities, as well as (iii) certain items that affect comparability which are listed in the table below. These items, net of minority interest, increased net income by $153.7 million, or $1.11 per diluted share in the six months ended June 30, 2005 and increased net income by $45.9 million, or $.36 per diluted share in the six months ended June 30, 2004.

FFO(1) for the six months ended June 30, 2005 was $465.0 million, or $3.35 per diluted share, compared to $288.6 million, or $2.24 per diluted share, for the prior year's six months. Adjusting FFO for certain items that affect comparability, first half 2005 FFO is 4.3% higher than first half 2004 on a per share basis, as detailed below:

FOR THE SIX MONTHS ENDED
                                 -------------------------------------
(Amounts in thousands, except per   June 30, 2005     June 30, 2004
 share amounts)
                                 ------------------ ------------------
                                  Amount  Per Share  Amount  Per Share
                                 -------- --------- -------- ---------
FFO as shown above               $465,011 $   3.35  $288,649 $   2.24
                                          =========          =========
Adjustments:
 Net gain on conversion of Sears
  common shares and derivative
  position to Sears Holdings
  common shares and derivative
  position                        (86,094)                --
 Income from mark-to-market of
  Sears Holdings derivative
  position                        (45,759)                --
 Net gain on sale of Alexander's
  condominiums                    (26,174)                --
 Income from mark-to-market of
  GMH Communities LP warrants      (2,563)                --
 Net gain on sales of land
  parcels and condominiums         (1,469)              (776)
 Alexander's stock appreciation
  rights compensation expense       9,467             12,084
 Write-off of perpetual preferred
  share and unit issuance costs     6,052              3,895
 Impairment losses of partially-
  owned entities                    4,016              5,975
 Loss on early extinguishment of
  debt of a partially-owned
  entity                               --              1,434
 Net gain on sale of Newkirk MLP
  option units                         --             (7,494)
 Limited partners' share of above
  adjustments                      16,748             (2,176)
                                 ---------          ---------
FFO, as adjusted for
 comparability                   $339,235 $   2.44 $ 301,591 $   2.34
                                 ======== ========= ======== =========

(1) See page 4 for a reconciliation of net income applicable to common
    shares to FFO for the six months ended June 30, 2005 and 2004.

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.

VORNADO REALTY TRUST
         OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED
                        JUNE 30, 2005 AND 2004

                             FOR THE THREE MONTHS FOR THE SIX MONTHS
                                 ENDED JUNE 30,      ENDED JUNE 30,
                            --------------------- --------------------
(Amounts in thousands,
 except per share amounts)     2005       2004       2005      2004
                            ---------- ---------- ---------- ---------

Revenues                     $ 594,785 $  398,996 $1,193,454 $791,441
                            ========== ========== ========== =========

Income from continuing
 operations                  $ 188,493 $  136,907 $  433,258 $250,975
Income from discontinued
 operations                     31,716     67,053     32,506   67,179
                            ---------- ---------- ---------- ---------
Income before allocation to
 limited partners              220,209    203,960    465,764  318,154
Limited partners' interest
 in the Operating
 Partnership                   (23,975)   (25,011)   (51,170) (39,468)
Perpetual preferred unit
 distributions of the
 Operating Partnership         (15,152)   (16,948)   (33,693) (34,246)
                            ---------- ---------- ---------- ---------
Net income                     181,082    162,001    380,901  244,440
Preferred stock dividends       (8,385)    (3,565)   (20,771) (11,547)
                            ---------- ---------- ---------- ---------
Net income applicable to
 common shares               $ 172,697 $  158,436 $  360,130 $232,893
                            ========== ========== ========== =========

    Net income per common
     share:
       Basic                 $    1.33 $     1.26 $     2.79 $   1.89
                            ========== ========== ========== =========
       Diluted               $    1.25 $     1.21 $     2.63 $   1.81
                            ========== ========== ========== =========
       Average number of
       common shares and
       share equivalents
       outstanding:

       Basic                   130,178    125,468    129,254  123,539
                            ========== ========== ========== =========
       Diluted                 142,813    130,744    139,003  129,087
                            ========== ========== ========== =========

FFO applicable to common
 shares plus assumed
 conversions                 $ 215,802 $  159,674 $  465,011 $288,649
                            ========== ========== ========== =========

    FFO per diluted share    $    1.51 $     1.22 $     3.35 $   2.24
                            ========== ========== ========== =========
    Average number of common
    shares and share
    equivalents outstanding
    used for determining
    funds from operations
    per diluted share          142,813    130,744    139,003  129,087
                            ========== ========== ========== =========

The following table reconciles FFO and net income:

(Amounts in thousands, except  For The Three Months For The Six Months
 per share amounts)               Ended June 30,      Ended June 30,
                               -------------------- ------------------
Reconciliation of Net Income to
 FFO:                             2005      2004      2005     2004
                               ---------- --------- --------- --------
 Net income                    $  181,082 $ 162,001 $380,901 $244,440
 Depreciation and amortization
  of real property                 68,418    54,492  132,294  108,132
 Net gain on sale of real estate  (31,614)  (65,905) (31,614) (65,905)
 Proportionate share of
  adjustments to equity in net
  income of partially-owned
  entities to arrive at FFO:
    Depreciation and
     amortization of real
     property                       6,290    13,442   12,587   26,546
    Net gain on sale of real
     estate                           (79)     (862)    (214)  (2,779)
 Limited partners' share of
  above adjustments                (5,244)     (196) (14,245) (10,782)
                               ---------- --------- --------- --------
 FFO                              218,853   162,972  479,709  299,652
 Preferred share dividends         (8,385)   (3,565) (20,771) (11,547)
                               ---------- --------- --------- --------
 FFO applicable to common shares  210,468   159,407  458,938  288,105
 Interest on 3.875% exchangeable
  senior debentures                 5,094        --    5,578       --
 Series A convertible preferred
  share dividends                     240       267      495      544
                               ---------- --------- --------- --------
 FFO applicable to common shares
  plus assumed conversions     $  215,802 $ 159,674 $465,011 $288,649
                               ========== ========= ========= ========

(1) 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 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 pages 1 and 2 of this press release.