8-K

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                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549


                                   FORM 8-K


                                CURRENT REPORT

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

                        Commission file number 1-6064

      Date of Report (Date of earliest event reported)   February 6, 1995


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


         DELAWARE                                      51-01-00517
- -------------------------------                    -------------------
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                     Identification No.)


31 WEST 34TH STREET, NEW YORK, NEW YORK                  10001
- ------------------------------------------------------------------------------
(Address of principal executive offices)               (Zip Code)


(Registrant's telephone number, including area code)     (212) 760-9500


                                NOT APPLICABLE
- ------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

                                 Page 1 of 5
                        The Exhibit Index is on Page 5
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ITEM 5. OTHER EVENTS

     VORNADO AND ALEXANDER'S TO CONSUMMATE TRANSACTIONS

     New York, NY, February 6, 1995 - Alexander's, Inc. (NYSE:ALX) and Vornado
Realty Trust (NYSE:VNO) announced today that they have agreed in principle to
enter into a number of transactions designed to provide Alexander's with
greater financial flexibility and resources.  Among other things, Alexander's
will become a real estate investment trust, will obtain new financing, will
extend its existing leasing arrangement and will enter into a comprehensive
management and development agreement.  Alexander's also had previously received
an extension date for its final payment to creditors.

     Vornado has agreed to provide Alexander's with up to $75 million of
secured financing for a three year term.  Alexander's has agreed to extend for
three years an exclusive leasing agreement with Vornado.  Vornado will also
serve as Alexander's manager and developer and Steven Roth, the Chairman and
Chief Executive of Vornado, will become CEO of Alexander's.  Stephen Mann will
remain Chairman of Alexander's.  Among other conditions, these transactions are
subject to the closing of the stock acquisition described below and to
bankruptcy court approval.

     Alexander's will use the proceeds of the financing to repay allowed
general unsecured creditor claims, to repay certain loans and for working 
capital and real estate development costs and activities.  Alexander's stated 
that to complete its planned development activities additional financing will 
be required.  These financings are in various stages of negotiation.

     Vornado, which owns 2.3% of Alexander's common stock, also announced that
it has entered into an agreement to acquire all of the 1,353,468 Alexander's
shares (27.1%) owned by Citibank, N.A. for $40.50 per share in cash.  Mr. Roth
and Interstate Properties, a partnership in which Mr. Roth is a general
partner, together own 34.5% of the outstanding common shares of beneficial
interest of Vornado and 27.2% of Alexander's common stock.  Upon consummation
of this acquisition, which is conditioned upon Alexander's becoming a REIT,
Vornado and its affiliates will own 56.4% of the outstanding common stock of
Alexander's.  Vornado and its affiliates will be restricted for three years
from owning in excess of two-thirds of Alexander's common stock without the
consent of the independent directors of Alexander's.  This transaction is
subject to bankruptcy court approval of the management and development
agreement and financing referred to above.  Vornado may seek participants for
its loan to Alexander's and anticipates it will seek to augment its cash
balances with additional borrowings.




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     These various transactions are expected to close in the first half of
1995.

     Alexander's also announced that it had entered into an agreement with the
Official Committee of Unsecured Creditors on terms of an extension of up to
March 31, 1995 for the final payment of approximately $28,000,000 due general
unsecured creditors under the company's plan of reorganization.  Alexander's
will be required to auction properties if creditors are not repaid by March 31,
1995.  The agreement was approved by the bankruptcy court on January 4, 1995.


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                                  SIGNATURES


        Pursuant to the requirements of the Securities and Exchange Act of 
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.       


Date: February 6, 1995                          ALEXANDER'S, INC.

                                                /s/ Steven Santora 
                                                -----------------------
                                                Title: Vice President and
                                                       Controller



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                                EXHIBIT INDEX


Exhibit 
Number        Description                                           Page No.
- -------       -----------                                           --------
10.1          Management and Development Agreement, dated 
              as of February 6, 1995 between Vornado Realty 
              Trust and Alexander's Inc., on behalf of 
              itself and each subsidiary listed therein . . . . . .    5

10.2          Standstill and Corporate Governance Agreement 
              dated as of February 6, 1995 by and among 
              Vornado Realty Trust, Interstate Properties 
              and Alexander's, Inc.,  . . . . . . . . . . . . . . .   37 

10.3          Commitment letter dated as of February 6, 1995 
              between Vornado Realty Trust and Alexander's, Inc., .   46

   

EX-10.1

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                                                              Exhibit 10.1

             MANAGEMENT AND DEVELOPMENT AGREEMENT


          THIS MANAGEMENT AND DEVELOPMENT AGREEMENT, dated
as of the 6th day of February, 1995 (the "Management
Agreement"), between ALEXANDER'S, INC., a Delaware
corporation, on behalf of itself and each of the subsidiaries
listed in Exhibit B attached hereto (collectively, "Owner"),
each having an address at 31 West 34th Street, New York, New
York 10001, and Vornado Realty Trust, a Maryland real estate
investment trust having an office at Park 80 West, Plaza II,
Saddle Brook, New Jersey 07663 ("Manager").


          IN CONSIDERATION of the mutual promises and
covenants herein contained, Owner and Manager agree as
follows:

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

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

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

          ARTICLE II.  Term.  A.  The term of this Agreement
shall commence on the Effective Date (as hereinafter 


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

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

          ARTICLE III.  Management and Development Fee.
          A. Owner shall pay Manager, as Manager's entire
compensation for the services rendered hereunder in connection
with the management of the Properties and the management of
the Owner, a management fee (the "Management Fee") equal to
Three Million Dollars ($3,000,000) per annum, payable in equal
monthly installments, in arrears, in the amount of $250,000
each on the tenth day of each calendar month beginning with
the first calendar month after the Effective Date.  All sums
payable to Manager hereunder shall be in addition to the
amounts payable to Manager under the Retention Agreement.  In
the event that this Agreement shall commence on a date other
than the first day of a calendar month, or shall terminate on
a date other than the last day of a calendar month, the
installment of the Management and Development Fee (as
hereinafter defined) payable for that month shall be prorated
for the actual number of days that this Agreement is effective
in that calendar month.  Notwithstanding anything contained
herein, in the event that the scope of the business of
Alexander's, Inc. shall expand beyond that which is
contemplated on the date hereof, Owner and Manager hereby
agree that the Management Fee shall be equitably adjusted
upward to reflect the increase in services rendered.  In the
event that Independent Directors and Manager are unable to
agree on the amount of the upward 



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adjustment as provided in this paragraph, then the parties
hereto hereby agree that the dispute shall be submitted
promptly by them to the American Arbitration Association for
the City of New York for determination in accordance with its
rules, and such determination shall be binding upon both
parties.

          B.   Owner shall pay Manager, as Manager's
compensation for the services rendered hereunder in connection
with the development of the Development Properties, a
development fee (the "Development Fee") (the Development Fee
and the Management Fee are sometimes referred to herein,
collectively, as the "Management and Development Fee") equal
to (i) five percent (5%) of the total Development Costs (as
hereinafter defined), allocated with respect to each Property
based on the Development Costs for that Property, plus (ii)
general overhead and administrative expenses equal to one
percent (1%) of the total Development Costs, allocated with
respect to each Property based on the Development Costs for
that Property.  Owner shall pay Manager, on account of the
Development Fee, monthly installments (the "Development
Installments") each in an amount equal to the Specified
Installment Amount (as defined below), with each such
installment payable, in arrears, on the tenth day of each
calendar month, beginning with the calendar month immediately
following the Effective Date.  In the event that it is
determined, upon Substantial Completion of any Property, other
than Rego Park I, that the aggregate Development Installments
paid to Manager as of such date on account of the Development
Fee, minus $900,000, total less than the amount of the
Development Fee that is due to Manager hereunder in respect of
all Properties other than Rego Park I, Owner shall pay to
Manager, within 15 days after Substantial Completion of such
Property, an amount equal to such difference.  In the event it
is determined, upon Substantial Completion of Rego Park I,
that the Development Fee that is due to Manager hereunder, in
respect of Rego Park I, is greater than $900,000, Owner shall
pay to Manager, within 15 days after substantial completion of
Rego Park I, an amount equal to such difference.  Anything in
this Agreement to the contrary notwithstanding, Owner's
obligation to pay the Development Installments, to the extent
of the Minimum Earned Fee Installments, during the twelve
calendar months beginning with the calendar month immediately
following the Effective Date, shall not be affected by the
termination of this Agreement for any reason and the
obligation to pay such amounts shall survive the termination
of this Agreement.
 

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



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

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

          "Development Properties" shall mean the Properties
     identified in Exhibit A as the "59th Street Property",
     the "Kings Plaza Store Property", the "Rego Park I
     Property", the "Rego Park II Property" and the "Paramus
     Property".

          "Specified Installment Amount" means (i) during the
     first year of the term of this Agreement, $62,500 plus
     the Minimum Earned Fee Installment and (ii) thereafter,
     $62,500.  "Minimum Earned Fee Installment" means (i)
     during the first twelve months of the term of this
     Agreement, $75,000 and (ii) thereafter, $0.  

          "Substantial Completion" shall mean, with respect to
     each Property, the date on which (a) all punch list items
     and landscaping at that Property have been completed, (b)
     the planning, design, construction and development of
     that Property have been completed, as certified by the
     Owner's architect, in accordance with the plans and
     specifications therefor approved by the Board, (c) all
     necessary occupancy and other permits have been obtained
     with respect to the work completed at that Property for
     which Manager has any obligation hereunder and (d) if
     leases are then in effect at that Property, the portions
     of the Property demised under the leases have been
     delivered for possession to the tenants thereunder in
     accordance with the terms thereof, the tenants have
     otherwise taken possession of


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     the demised premises, or, if tenants cannot take
     possession due to Owner's obligation to perform tenant
     improvement work, tenant improvement work has commenced
     thereunder.

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

          D.    In the event that (i) Owner shall dispose of
any or all of the Development Properties or (ii) shall not
proceed for any reason with the development of any or all of
the Development Properties, then Manager shall use diligent
efforts to reduce or eliminate all allocable costs and
expenses, both direct or indirect, that would otherwise be
incurred by Manager in the performance of its obligations
hereunder.  In such event(s), each subsequent Development
Installment, to the extent in excess of the Minimum Earned Fee
Installment, shall be equitably adjusted downward to reflect
the reduction or elimination of such costs and expenses
resulting from the deletion of services required to



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be provided by Manager.  In all cases, however, Manager shall
be compensated for services rendered and reimbursed for costs
and expenses incurred to such date including, without
limitation, salaries and other compensation for employees of
Manager.  Manager shall also be compensated for costs and
expenses of employees and other such items that will continue
to be incurred to the extent such costs and expenses are not
avoidable or cannot be mitigated by Manager using its diligent
efforts.  In the event that Owner fails to obtain the
financing contemplated by, in and in accordance with, the
Commitment (as hereinafter defined) from Lender (as defined
therein) or from a substitute source within ninety (90) days after
the Effective Date, the Management Fee shall be equitably
adjusted downward, but in no event to an amount less than
$2,500,000, to reflect the reduction in services until such
time as alternate financing in a comparable amount is
obtained, at which time the Management Fee shall be fully
reinstated.  In the event that Independent Directors and
Manager are unable to agree on the amount of the downward
adjustment as provided in this paragraph, then the parties
hereto hereby agree that the dispute shall be submitted
promptly by them to the American Arbitration Association for
the City of New York for determination in accordance with its
rules, and such determination shall be binding upon both
parties.

          E.  Owner and Manager acknowledge that Manager has
heretofore performed certain development planning services for
Owner in connection with the Property identified on Exhibit A
as the "Rego Park I Property", with respect to which
construction has commenced and is continuing.

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

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


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adversely affect the professional relationship and duties of
Manager created by this Agreement.

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

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

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

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

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

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

               6.  Except as otherwise provided hereunder,
     procuring, at Owner's expense and at the direction of the
     Board or the Owner's insurance brokers or insurance
     advisors, any insurance required or desirable in
     connection with Owner's business or the employees
     required to operate Owner's business and errors and 


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     omissions insurance for Manager, under which Owner shall
     be the sole beneficiary.  Manager shall not settle any
     claim for a settlement amount in excess of $100,000
     without the approval of the Board.

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

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

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


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     Manager, the amount of such additional compensation
     payable to Manager shall be equal to Manager's costs in
     connection with such work, plus twenty percent (20%) of
     Manager's costs. 

               10.  Negotiating and executing contracts for
     the furnishing to the Properties of all services and
     utilities, including electricity, gas, water, steam,
     telephone, cleaning, security, vermin extermination,
     elevator, escalator and boiler maintenance and any other
     utilities or services, including repairs and maintenance
     of the buildings, other improvements and common areas at
     the Properties, or such of them as Manager deems
     advisable to assure that the Properties shall be caused
     to be and remain in a good, sound and clean condition and
     properly operating.  All fees, costs and expenses under
     the contracts shall be paid by Owner.

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

               a.  all assessments and charges of every kind
          imposed by any governmental authority having
          jurisdiction (including real estate taxes,
          assessments, sewer rents and/or water charges) and
          interest and penalties thereon; provided, however,
          that the interest or penalty payments shall be
          reimbursed by Manager to Owner if imposed by reason
          of delay in payment caused by Manager's gross
          negligence, willful misconduct, bad faith or


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          material misapplication of funds (to the extent such
          material misapplication of funds is not covered by
          insurance) (collectively "Malfeasance");

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

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

               d.  premiums on all policies of insurance;

               e.  salaries, wages and other related expenses,
          bonuses and fringe benefits for on-site personnel,
          service contracts, utilities, repairs, replacements,
          on-site administration expenses and Manager's
          compensation;

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

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

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

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

               12.  Engaging, at the expense of Owner, any
     outside collection agency Manager deems appropriate for
     the collection of rent or other revenues or instituting,
     in Manager's name (but only if Manager so elects) or in
     the name of Owner, but in any event at the expense of
     Owner, any and all legal actions or 


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     proceedings to collect rent or other income from the
     Properties or to oust or dispossess tenants or other
     persons therefrom, or cancelling or terminating any lease
     or the breach thereof or default thereunder by the
     tenant, and holding all security deposits posted by
     tenants and occupants and applying the same against
     defaults by the tenant or occupant.  Manager shall hold
     all security deposits in a separate account if required
     by law or if requested by Owner.  Manager shall not
     terminate any lease or evict the tenant thereunder
     without the prior approval of the Board.

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

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

               15.  Causing, at Owner's expense, all such acts
     and things to be done in or about the Properties as shall
     be necessary to comply with all statutes, ordinances,
     laws, rules, regulations, orders and determinations,
     ordinary or extraordinary, foreseen or unforeseen of
     every kind or nature affecting or issued in connection
     with the Properties by any governmental authority having
     jurisdiction thereof, as well as with all such orders and
     requirements of the Board of Fire Underwriters, Fire
     Insurance Exchange, or any other body that may hereafter
     exercise similar functions (collectively, "Applicable
     Laws").  In the event that Manager's good faith estimate
     of the cost of complying with any Applicable Laws shall
     exceed $100,000 in connection with any one Property or in
     the aggregate, Manager shall not take any action to
     comply with Applicable Laws without first obtaining the
     consent of the Board.  Notwithstanding the foregoing,
     however, Owner shall have no obligation to pay for the
     expenses incurred in connection with compliance with
     Applicable 


                                      11

   12


     Laws to the extent such costs are incurred due to
     Manager's Malfeasance or material breach of this
     Agreement.  Manager shall have the right to contest such
     Applicable Laws, and pending the final determination of
     the contest, Manager may withhold compliance, provided
     that Manager shall receive the Board's prior consent to
     so withhold compliance.  Manager agrees to contest any
     Applicable Law the Board shall request Manager to
     contest.

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

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

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

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

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


                                      12

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

               b. confirmation of lease commencement dates and
          termination dates.

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

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

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

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

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

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

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

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

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

Notwithstanding anything contained in this Article IV or
elsewhere in this Agreement to the contrary, Manager shall not
be responsible for the day-to-day management of, or the
collection of income from, the Kings Plaza Shopping Center and
Marina; that Property shall continue to be operated in
accordance with the Management and Operating Agreement, dated
as of December 31, 1986, among Kings Plaza Shopping Center of
Flatbush Avenue, Inc. ("KPA"), Kings Plaza Shopping Center of
Avenue U, Inc. and Centercorp., Inc (the "Centercorp
Agreement"); provided, however, that Manager 


                                      13

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shall, in accordance with the terms of this Agreement,
exercise all rights and have all of the responsibilities of
Alexander's Department Stores of Brooklyn, Inc., as successor
interest to KPA, under the Centercorp Agreement, provided
further, however, that the Board shall retain the right to
approve any successor in interest to Centercorp, Inc.

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

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

          B.  Owner shall be responsible for, and shall
indemnify Manager against, all costs incurred in connection
with the operation of Owner's business, except to the extent
such costs are incurred in connection with Manager's
Malfeasance or material breach of this Agreement, and all
past, present and future liabilities of Owner, including,
without limitation:

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

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

          3.  taxes;

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

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

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


                                      14

   15


     retailing activities and activities of Owner related to
     Owner's Chapter 11 filing, including, without limitation,
     salaries and other related expenses for employees whose
     sole or primary function is related to such winding up
     activities, including, without limitation the salary and
     other related expenses of Brian Kurtz. 

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

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

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

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

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

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

               5.  Preparing and filing, or causing the
     preparation and filing at the expense of Owner of, all
     returns (other than income, franchise and other similar
     returns), statements, declarations and filings that may


                                      15

   16


     from time to time be required of Owner in connection with
     the planning, design and development of any Development
     Property by any municipal, state, federal or other
     governmental or statutory authority having jurisdiction
     over the development of any Development Property.

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

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

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

               9.  Supervising the collection and review of
     all documentation required to be submitted to any 


                                      16

   17


     construction lender or other lender in connection with
     the development of any Property and supervising all
     disbursements made pursuant to any financing.

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

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

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

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

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

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

          ARTICLE VI.  Annual Budget.  A.  On or before the
beginning of each fiscal year of Alexander's Inc., Manager 


                                      17

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shall prepare and submit to Owner a proposed budget
(hereinafter referred to as the "Proposed Budget") of the
estimated operating and capital expenses of the Properties
for the next fiscal year or such other operating period as 
may be agreed to by the parties.

     B.  The Board shall have the right to approve or
disapprove the Proposed Budget.  The final budget for the
fiscal year is referred to as the "Approved Budget" in this
Agreement.  The Approved Budget shall be subject to quarterly
comparisons and revisions, which revisions the Manager and the
Board mutually shall agree to be appropriate, all such
revisions as approved by the Board shall be considered part of
the "Approved Budget".  Manager shall make expenditures
without the specific approval of the Board if:

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

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

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

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

          ARTICLE VII.  Chief Executive Officer.  Steven Roth,
Chairman of the Board and Chief Executive Officer of Manager,
shall serve as Chief Executive Officer of Alexander's, Inc.
and provide all services normally associated with such
position, to the extent not inconsistent with his position
with Manager.  Owner recognizes that Steven Roth has or may
have other business interests, activities and investments,
including, without limitation, interests in connection with
his interest in 


                                      18

   19


Manager and Manager's affiliates, some of which may be in
conflict or competition with the business of Owner and that he
is entitled to carry on such other business, activities, and
interests and shall have no duty or obligations to offer to
Owner any interest in such business interests, activities and
interests, including, without limitation, any potential
property acquisition, whether or not competitive with the
business interests of Owner.  Manager agrees to cause Steven
Roth to excuse himself from any activities of Owner that are
related to the enforcement of this Agreement. 

          ARTICLE VIII.  Owner to Execute Documents; Reserved
Rights.  Owner covenants and agrees that wherever in this
Agreement it is provided that Manager may take any action in
the name of or on Owner's behalf, Owner will promptly execute
any documents that may be required by Manager for the purposes
of carrying out any of Manager's functions as same are set
forth.  Anything set forth in this Agreement to the contrary
notwithstanding, Owner reserves to itself the performance of
all duties and obligations of Manager hereunder to be
performed with respect to the 59th Street Property (as
described on Exhibit A hereto) as required pursuant to the
amended and restated partnership agreement of Seven Thirty One
Limited Partnership as the same exists on the date hereof;
provided, however, that no such reservation or performance by
Owner will alter any other rights or obligations set forth in
this Agreement (including, without limitation, the payment of
the fees payable to Manager hereunder).

          ARTICLE IX.  Assignment; Cancellation.   A.  Neither
Owner nor Manager shall assign this Agreement or any of its
rights hereunder without the consent of the other party;
provided, however, (i) qualification by Alexander's, Inc. as a
REIT (as defined herein) shall not be deemed to constitute an
assignment and (ii) that Manager shall have the right to
assign its rights and delegate its duties under this Agreement
to any Specified Vornado Affiliate without the consent of
Owner provided that, (a) in connection with any such
assignment, Vornado Realty Trust provides to Owner a
guarantee, in form and substance reasonably satisfactory to
Owner, of the duties and obligations of the Specified Vornado
Affiliate under this Agreement and agrees, to the extent
necessary, to make available to the Specified Vornado
Affiliate the resources of Vornado Realty Trust for the
purposes of carrying out such duties and obligations, (b)
notwithstanding any such assignment to a Specified Vornado
Affiliate, the indemnification of Owner by Manager set forth
in Article XII hereof shall remain the obligation of Vornado
Realty Trust and (c) references to the standard of care,
customarily provided services and reporting standards
applicable to Manager in performing its duties under this 


                                      19

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Management Agreement shall be the same standard of care and
reporting standards applicable to Vornado Realty Trust in
connection with properties owned by Vornado Realty Trust.  For
purposes of this Article IX, "Specified Vornado Affiliate"
shall mean (i) any wholly-owned subsidiary of Vornado Realty
Trust or (ii) any entity at least 95% of the preferred stock
of which is owned by Vornado Realty Trust.

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

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

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

          B.  Owner shall, within ten (10) days after its
receipt of said notice, cure such breach unless it disputes
the claim as set forth in Paragraph D of this Article X.  If
Owner does not cure within such ten-day period, Manager shall
have the right, but not the obligation, to cease providing
services hereunder until the breach shall be cured.  In the
event that Manager shall cease providing services hereunder
pursuant to this Paragraph, Owner shall have the right to
terminate this Agreement and replace Manager in which event
Manager promptly shall deliver to Owner all books and records
with respect to the Properties and Owner that are in Manager's
possession and otherwise comply with paragraph H below, and
upon its receipt of any outstanding payments due to it, shall
cooperate with the successor Manager to effect a smooth
transition in the 


                                      20

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management, operation and development of the Properties and
the management and operation of Owner.

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

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

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

          F.  Manager and Owner shall each have the further
right to terminate this Agreement or any portion or 


                                      21

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

          G.  Upon any termination, partial termination with
respect to one or more Properties or as set forth in paragraph
C of Article III or expiration of this Agreement, all of the
obligations of either party to the other shall terminate
immediately except (i) Manager shall comply with the
applicable provisions of Subsection H below, (ii) Owner shall
pay to Manager all Management and Development Fees and
expenses earned and/or due hereunder to the date of
termination or expiration and (iii) as otherwise expressly
stated herein.  Upon any termination of any portion, provision
or activity of or under this Agreement, the provisions of the
preceding sentence shall apply in respect of the terminated
portion, provision or activity.  Owner shall pay Manager any
amount owed to Manager under this Agreement within 30 days
after any termination of this Agreement.

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

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

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


                                      22

   23


     funds held by Manager in connection with any such
     Property to be delivered to Owner and shall cooperate
     with Owner in the transition by Owner to a replacement
     property manager, if applicable.  

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

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

          ARTICLE XII.  Indemnity.  A.  Owner shall, to the
fullest extent permitted by applicable law, indemnify, defend
and hold harmless Manager, its officers, directors, trustees,
partners, agents, employees and representatives against any
losses, claims, damages or liabilities to which such person
may become subject in connection with any matter arising out
of or in connection with this Agreement or Owner's business or
affairs, except for any loss, claim, damage or liability
caused by Manager's Malfeasance.  If Manager becomes involved
in any capacity in any action, proceeding or investigation in
connection with any matter arising out of or in connection
with this Agreement or Owner's business or affairs, Owner
shall reimburse Manager for Manager's legal and other expenses
(including the cost of any investigation and preparation) as
they are incurred in connection therewith; provided, however,
that Manager shall promptly repay to Owner the amount of any
such reimbursed expenses paid to it to the extent that it
shall ultimately be determined that Manager, its officers,
directors, trustees or agents were not entitled to be
indemnified by Owner in connection with such action,
proceeding or investigation.  

          B.   Vornado Realty Trust shall indemnify, defend
and hold harmless Owner and each of their respective officers,
directors, trustees, partners, representatives, employees and
agents from and against any and all claims, losses, damages or
liabilities, to which such person may become subject and
arising out of Manager's Malfeasance or 


                                      23

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

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

          ARTICLE XIII.  Notices.  Any and all notices,
consents or directives by either party intended for the other
shall be in writing sent by hand delivery or reputable
overnight courier service to the respective addresses first
herein set forth in this Agreement, unless either party shall
have designated different addresses, by serving written
notices of change of addresses on the other party by
registered or certified mail, return receipt requested.

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

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

          C.  Neither Owner nor Manager shall make (and each
hereby waives) any claim against the other party's directors
personally or against the other party's trustees,
beneficiaries or shareholders personally.  Manager shall (and
is hereby authorized to) insert in all leases, 


                                      24

   25


documents and agreements executed by it on behalf of Owner,  a
provision that Manager's directors, trustees, beneficiaries or
shareholders shall not be personally liable thereunder.

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

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

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

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

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


                                      25

   26


          ARTICLE XV.  Declaration of Trust.  

          A.  Manager shall use every reasonable means to
assure that all persons having dealings with Alexander's
through Manager shall be informed that no trustee,
shareholder, officer or agent of Alexander's, or any
subsidiary of Alexander's established for purposes of electing
tax treatment as a REIT, shall be held to any personal
liability, nor shall resort be had to their private property
for the satisfaction of any obligation or claim or otherwise
in connection with the affairs of Owner, but the trust estate
only shall be liable.  Manager recognizes and agrees that
every agreement or other written instrument entered into by
Manager on behalf of Owner shall contain a provision stating
the above limitation.

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

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


                                      26

   27


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

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

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

          C.  Manager agrees that it shall cooperate with
Owner in accomplishing a satisfactory amendment or
modification of any such document or other undertaking, or 


                                      27

   28


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

          ARTICLE XVII.  Effectiveness of this Agreement;
Further Termination Right.  This Agreement shall not become
effective until the later of (i) the date the Bankruptcy
Court of the United States District Court for the Southern 
District of New York approves this Management Agreement and
(ii) the date on which Vornado Realty Trust shall have
purchased all outstanding shares of stock in Alexander's
held by Citibank, N.A., pursuant to that certain Stock
Purchase Agreement, dated as of February 6, 1995, between
Citibank, N.A. and Vornado Realty Trust and Citibank, N.A.,
shall have transferred to Vornado Realty Trust all such shares
of stock.  Manager shall have the right to terminate this
Agreement in the event that Owner shall either (i) fail to use
its best efforts to satisfy the conditions set forth in that
certain commitment letter, dated February 6, 1995, between
Vornado Realty Trust and Alexander's (the "Commitment") and to
take all actions required to be taken to pledge the collateral
and effectuate the Loan (as defined in the Commitment) on the
terms and condition set forth therein; or (ii) breach its
obligations to refrain from soliciting for or accepting any
financing from any party other than as defined in the
Commitment prior to the expiration of the Commitment.  In the
event that the Effective Date shall not have occurred by June
30, 1995, this Agreement shall terminate and neither party
shall have any obligations hereunder.


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                      28

   29


          IN WITNESS WHEREOF, the parties hereto have hereunto
executed this Agreement as of the 6th day of February, 1995.

                    OWNER:    ALEXANDER'S INC.


                              By:  /s/STEPHEN MANN
                                      Stephen Mann
                                      Chairman

                    MANAGER:  VORNADO REALTY TRUST


                              By: /s/JOSEPH MACNOW
                                  Joseph Macnow
                                  Vice President and Chief
                                   Financial Officer



                                      29



   30


                           EXHIBIT A



1.  "FORDHAM ROAD PROPERTY"

          BUILDING
          ADDRESS:  commonly known as 2501-2511 Grand
                    Concourse, Bronx, New York
          TAX MAP DESIGNATION:
               BLOCK: 3167  LOT: 1 
               CITY: New York  COUNTY: Bronx  STATE: New York

          PARKING LOT
          ADDRESS:  commonly known as Creston Avenue, Bronx, 
                    New York
          TAX MAP DESIGNATION:
               BLOCK: 3167  LOT: 26
               CITY: New York  COUNTY: Bronx  STATE: New York


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


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


4.  "59TH STREET PROPERTY"
       ADDRESS: 162-64 East 59th St a/k/a 976-88 Third Ave
                135-39 East 58th St a/k/a 723-33 Lexington Ave
                136-40 East 59th St a/k/a 735-41 Lexington Ave
                New York, New York
       TAX MAP DESIGNATION:  
             BLOCK:  1313  LOTS: 40, 42, 43 & 50
             CITY: New York  COUNTY: New York  STATE: New York


                                      1

   31


5.   "KINGS PLAZA STORE PROPERTY"
          ADDRESS:  Kings Plaza
                    Brooklyn, New York
          TAX MAP DESIGNATION:
               BLOCK:  8470  LOT: P/O 55
               CITY: New York  COUNTY: Kings  STATE: New York


6.   "KINGS PLAZA SHOPPING CENTER PROPERTY"
          ADDRESS:  Kings Plaza
                    Notwithstanding Avenue & Avenue U
                    Brooklyn, New York
          TAX MAP DESIGNATION:
               BLOCK:  8470  LOTS: P/O 55, P/O 50 & P/O 1
               CITY: New York  COUNTY: Kings  STATE: New York


7.   "REGO PARK PROPERTY"
          ADDRESS:  Junction Boulevard
                    Rego Park, New  York

          "REGO PARK I" (includes store and parking garage)
               TAX MAP DESIGNATION:
                    BLOCK: 2080  LOT: 101
                              AND
                    BLOCK: 2084  LOT: 101
               CITY: New York  COUNTY: Queens  STATE: New York

          "REGO PARK II" (includes parking lot and "Z" parcel)
               TAX MAP DESIGNATION:
                    BLOCK: 2077  LOTS: 90 & 98
                              AND
                    BLOCK: 2076  LOTS: 50 & 63
               CITY: New York  COUNTY: Queens  STATE: New York


8.   "PARAMUS PROPERTY"

          TAX MAP DESIGNATION: 
                LOT: 1  BLOCK: 1202  TAX MAP SHEET NO.: 12


                                      2

EX-10.2

   1
                                                                  Exhibit 10.2

               STANDSTILL AND CORPORATE GOVERNANCE AGREEMENT


            THIS STANDSTILL AND CORPORATE GOVERNANCE AGREEMENT (the
"Agreement") dated as of February 6, 1995, by and among Alexander's, Inc.,
a Delaware corporation (the "Company"), Vornado Realty Trust, a Maryland
real estate investment trust ("Vornado"), and Interstate Properties, a New
Jersey general partnership ("Interstate").

                            W I T N E S S E T H

            WHEREAS, Vornado and Interstate collectively own beneficially
and of record approximately 29.3% of the outstanding shares of common
stock, par value $1.00 per share, of the Company (the "Common Shares");

            WHEREAS, Vornado and Citibank, N.A. ("Citibank") have entered
into an agreement (the "Citibank Agreement") pursuant to which Vornado will
acquire an additional approximately 27.1% of the outstanding Common Shares
from Citibank; and

            WHEREAS, Vornado, Interstate and the Company desire to enter
into certain restrictions and agreements with respect to Vornado's and
Interstate's investments in the Company.

            NOW THEREFORE, in consideration of the mutual covenants
hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:

                                ARTICLE I.

                          STANDSTILL RESTRICTIONS

            1.1.  Standstill.  During the term of this Agreement unless
approved by the Independent Directors (as hereinafter defined), Vornado and
Interstate will not, and will cause each of their respective Affiliates (as
such term is defined in Rule 12b-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) and Associates (as such term is
defined in Rule 12b-2 under the Exchange Act), whether or not any such
Affiliate or Associate was such on the date of this Agreement, not to:

            (a)   acquire, offer to acquire, or agree to acquire, directly
or indirectly (including repurchases by the Company), by purchase or
otherwise, any Common Shares or

                                      1
   2


direct or indirect rights or options to acquire (through purchase,
exchange, conversion or otherwise) any Common Shares, if such acquisition,
at the time it is made, together with the Common Shares otherwise owned
collectively by Vornado, Interstate and their respective Affiliates and
Associates (excluding the Company) (collectively, the "Vornado Group"),
would result in the Vornado Group's aggregate Beneficial Ownership (as such
term is defined in Rule 13d-3 under the Exchange Act) or record ownership
of Common Shares during the term of this Agreement exceeding 66.65% of the
then outstanding Common Shares; or 

            (b)   sell, transfer, or otherwise dispose of any Common Shares
owned or subsequently obtained by each of them in the aggregate in excess
of the Permitted Transfer Amount, in one or a series of related
transactions, at a price or prices per Common Share in excess of 115% of
the average of the last reported sales price per Common Share, as reported
by the New York Stock Exchange, Inc. for the previous 20 trading days,
unless the transferee of such Common Shares irrevocably offers to purchase
the same pro rata percentage of the Common Shares of all other Beneficial
Owners of outstanding Common Shares, other than the members of the Vornado
Group, on the same terms and at the same price per Common Share, it being
understood that any transfers occurring within a 360-day period involving,
directly or indirectly, the same transferee or its Affiliates or Associates
or any other person who would constitute a "group" as defined in Exchange
Act Rule 13d-3 with any of the foregoing ("Related Parties") shall be
deemed to be part of a series of related transactions, but that
transactions with persons who are not Related Parties shall not be
considered a series of related transactions for purposes of this Section
1(b).  "Permitted Transfer Amount" means the number of Common Shares
included in any transaction or related series of transactions which in the
aggregate is equal to the greater of (i) 30% of the outstanding Common
Shares or (ii) a majority of the Common Shares owned in the aggregate by
the Vornado Group, in each case at the time of such transfer or transfers. 
Notwithstanding the foregoing, the members of the Vornado Group shall be
permitted to transfer any Common Shares pursuant to a broad public
distribution in an underwritten public offering registered under the
Securities Act of 1933, as amended.

                                      2
   3


                                ARTICLE II.

                        CORPORATE GOVERNANCE MATTERS

            2.1.  Directors.  (a)  During the term of this Agreement,
Interstate and Vornado agree to use their best efforts to cause the Board
of Directors of the Company to include three members who are Independent
Directors.  For purposes hereof, a person shall be deemed to be an
"Independent Director" if he or she is not, or was not at any time during
the five years preceding his or her election as a director, (i) a member of
the Vornado Group, (ii) an Affiliate or Associate of any entity which
Beneficially Owns 25% or more of the voting securities of the Company,
(iii) an Affiliate or Associate of any entity who has had any material
business dealings with a member of the Vornado Group during such period or
(iv) a family member of any of the above-named persons.  If the Independent
Director or Independent Directors so request, Interstate and Vornado agree
to use their best efforts to cause an individual or individuals chosen by
the remaining Independent Director or Independent Directors, who is
reasonably satisfactory to a majority of the remaining members of the
Company's Board of Directors, to fill the vacancy discussed in Section
2.1(b) or any vacancy caused by the resignation, removal or death of an
Independent Director.  Any action to be taken by the Independent Directors
shall be taken by majority vote of the Independent Directors in office.

            (b)   The Parties hereto agree that on the date hereof, Stephen
Mann and Thomas DiBenedetto are the only members of the Board of Directors
of the Company who are Independent Directors.  Interstate and Vornado agree
to use their best efforts to cause Messrs. Mann and DiBenedetto and a third
Independent Director designated by Messrs. Mann and DiBenedetto in
accordance with Section 2.1(a) to serve on the Board of Directors of the
Company as Independent Directors during the term of this Agreement.  The
parties hereto further agree that the Independent Directors can only be
removed for "cause."

            (c)   The Company shall, and Interstate and Vornado agree to
use their best efforts to cause the Company to, provide the Independent
Directors with a reasonable budget to employ investment bankers,
independent counsel or other professionals that the Independent Directors
determine are necessary to carry out their responsibilities.  The Company
shall maintain its current indemnification of officers and directors under
its Amended and Restated Certificate of Incorporation and By-Laws and shall
maintain its directors 

                                      3
   4


and officers insurance to the extent available at current premiums (which
do not exceed $250,000 per annum).

            (d)   The Board of Directors has approved of the appointment of
Russell Wight and David Mandelbaum as members of the Company's Board of
Directors, to fill two of the three vacancies created by the resignations
of the Citibank designees.

            2.2.  Business Combinations and Other Affiliate Transactions. 
During the term of this Agreement, Interstate and Vornado agree not to
cause the Company to engage in any transaction with a member of the Vornado
Group (i) that is described in or contemplated by the definition of
"business combination" contained in Section 203 of the Delaware General
Corporation Law, or (ii) in which any member of the Vornado Group has an
interest (other than as a stockholder of the Company), unless in each case,
such transaction has been approved by a majority of the Independent
Directors.

            2.3.  REIT Qualification.  The Company agrees that it will not
knowingly take any action that will cause the Company to cease to qualify
as a real estate investment trust within the meaning of Section 856 of the
Internal Revenue Code of 1986, as amended, unless such action shall have
been approved by a majority of the Board of Directors of the Company.

            2.4.  Registration Rights.  Upon the request of the Vornado
Group, the Company agrees to use its best efforts to cause a registration
statement to become effective under the Securities Act of 1933, as amended,
relating to the offer and sale of the Common Shares held by the Vornado
Group, on customary and usual terms to be agreed upon between the Company
and the Vornado Group.  The parties hereto agree that, in connection with
such registration, the Vornado Group shall pay for all costs and expenses
relating to its legal fees, any blue sky fees and any underwriter discount,
and the Company shall pay for all costs and expenses relating to its legal
and accounting fees, and any printing or listing fees.  Interstate and
Vornado agree that the Vornado Group shall not make more than one such
request during any twelve-month period nor request that the Company
register less than 10% of the outstanding Common Shares at any one time. 
The Company shall have no liability to the Vornado Group if such
registration statement does not become effective for any reason, provided
that the Company has responded to such request in good faith.

            2.5.  Conduct of Company's Business.  From the date hereof to
the earlier of (i) Closing or termination of 

                                      4
   5


the Citibank Agreement or (ii) June 30, 1995, the Company shall not take
any action not approved by Vornado to (a) conduct its business other than
in the ordinary course, (b) amend its Amended and Restated Certificate of
Incorporation or its By-Laws, (c) declare, set aside or pay any dividend
payable in cash, stock or property with respect to the Company's common
stock, (d) issue, sell, pledge, dispose of or encumber any additional
shares of, or securities convertible or exchangeable for, or options,
warrants, calls, commitments or rights of any kind to acquire, the
Company's common stock, (e) acquire directly or indirectly by redemption or
otherwise any Common Shares, (f) incur any indebtedness for money borrowed,
(g) make or commit any expenditure (not previously committed) in excess of
$50,000 or (h) agree to do any of the foregoing.

            2.6.  Terms of Office.  The Company will use its best efforts
to adjust the classes in which directors serve so that the Independent
Directors will stand for election at the next annual meeting of
shareholders.


                                ARTICLE III.

                               MISCELLANEOUS

            3.1.  Authorization and Enforceability.  Each of the parties
hereto represents and warrants that it is duly authorized to execute and
deliver this Agreement and that this Agreement is a valid and binding
obligation of such party enforceable against such party in accordance with
its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the rights
of creditors generally and by general equitable principles.

            3.2.  Specific Performance.  Interstate and Vornado acknowledge
that the Company would not have an adequate remedy at law for money damages
in the event that any of the covenants of Interstate and Vornado in this
Agreement were not performed in accordance with its terms and therefore
agree that the Company shall be entitled to specific enforcement of such
covenants in addition to any other remedy to which it may be entitled, at
law or in equity.

            3.3.  Term.  If the closing of the Citibank Agreement occurs,
this Agreement shall terminate three years from the date of such closing. 
If the closing of the Citibank Agreement has not occurred, this Agreement
shall terminate on the earlier of (i) termination of the Citibank 

                                      5
   6


Agreement or (ii) June 30, 1995.  This Agreement is effective immediately
except that Sections 2.1, 2.2, 2.4 and 2.6 shall not become effective until
the closing of the Citibank Agreement has occurred.

            3.4.  Waivers.  The failure at any time of any party to require
performance by any other party of any responsibility or obligation required
by this Agreement shall in no way affect a party's right to require such
performance at any time thereafter, nor shall the waiver by the party of a
breach of any provision of this Agreement by any other party constitute a
waiver of any other breach of the same or any other provision of this
Agreement nor constitute a waiver of the responsibility or obligation
itself.

            3.5.  Assignability.  This Agreement shall be binding upon and
inure to the benefit of the successors, heirs and legatees of each party
hereto, as appropriate.  Neither this Agreement nor any right or obligation
hereunder may be assigned or delegated in whole or in part to any other
person without the prior written consent of the other parties.

            3.6.  Notices.  In any case where any notice or other
communication is required or permitted to be given hereunder such notice or
communication shall be in writing and (a) personally delivered, (b) sent by
registered United States mail, postage prepaid, return receipt requested,
(c) transmitted by telecopy of (d) sent by way of a recognized overnight
courier service, postage prepaid, return receipt requested with
instructions to deliver on the next business day, in each case as follows:

            If to the Company, to:

            Alexander's Inc.
            31 West 34th Street
            New York, New York 10001

            Attention:  Brian Kurtz
            Telecopy:   (212) 695-4221

            With copy to:

            Stephen Mann
            c/o Clifford Companies
            292 Madison Avenue
            New York, New York 10017
            Telecopy:  (212) 689-8490


                                      6
   7


            and

            Shearman & Sterling
            599 Lexington Avenue
            New York, New York 10022

            Attention:  Douglas Bartner, Esq.
            Telecopy:   (212) 848-7179


            If to Vornado or Interstate, to or in care of:

            Vornado Realty Trust
            Park 80 West
            Plaza II
            Saddle Brook, NJ 07662

            Attention:  Steven Roth
            Telecopy:   (201) 587-0600

            With copy to:

            Sullivan & Cromwell
            1701 Pennsylvania Avenue, N.W.
            Washington, D.C. 20006

            Attention:  Janet T. Geldzahler, Esq.
            Telecopy:   (202) 293-6330


            All such notices or other communications shall be deemed to
have been given or received (i) upon receipt if personally delivered, (ii)
on the fifth day following posting if by registered United States mail,
(iii) when sent if by confirmed telecopy or (iv) on the next business day
following deposit with an overnight courier.

            3.7.  Choice of Law.  This Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of
Delaware without giving effect to the principles of conflict of laws
thereof.

            3.8.  Severability.  Should any provision of this Agreement be
deemed in contradiction with the laws of any jurisdiction in which it is to
be performed or unenforceable for any reason, such provision shall be
deemed null and void solely for the purpose of the performance thereof in
such jurisdiction, but this Agreement shall remain in force in all other
respects.  Should any provision of this Agreement be or become ineffective
because of changes in applicable laws or interpretations thereof or should
this Agreement 

                                      7
   8


fail to include a provision that is required as a matter of law, the
validity of the other provisions of this Agreement shall not be affected
thereby.  If such circumstances arise, the parties hereto shall negotiate
in good faith appropriate modifications to this Agreement to reflect those
changes that are required by law.

            3.9.  Third Party Beneficiaries.  In the event the Independent
Directors shall not be in office or the Company has failed to seek
enforcement of its rights or the rights of its shareholders under this
Agreement despite a demand by the Independent Directors that the Company do
so, the present and future beneficial owners of voting securities of the
Company are intended third party beneficiaries of this Agreement and any
such person may take such action as may deemed necessary or appropriate to
enforce the rights and obligations arising pursuant to this Agreement or to
obtain the benefits intended to be conferred hereby.

            3.10.  References to Agreement.  Any reference herein to this
Agreement shall be deemed to be a reference to such Agreement as the same
may be modified, varied, amended or supplemented from time to time by the
parties in accordance with the provisions hereof.  Unless the context
otherwise expressly requires, the words "herein," "hereof" and "hereunder"
and other words of similar importance refer to this Agreement as a whole
and not to any particular Article, Section or other subdivision.

            3.11.  Entire Agreement.  This Agreement constitutes the entire
agreement between the parties hereto and supersedes any prior agreement or
understanding between the parties hereto whether oral or written, with
respect to the matters contemplated hereby.

            3.12.  Headings, etc.  The Article and Section headings in this
Agreement are intended for convenience of reference only and shall not
affect the interpretation of this Agreement.  Whenever the context shall
require, each term stated in either the singular or plural shall include
the singular and the plural.  References herein to masculine, feminine or
neuter pronouns shall be construed to refer to another gender when the
context may require.

            3.13.  Counterparts.  This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.

            3.14.  Amendments and Waivers.  This Agreement may be amended
or modified and any provision hereof may be 


                                      8
   9


waived only by a written instrument approved by the Independent Directors
and executed by each of the parties or by their respective successors,
assigns, heirs and legatees, as appropriate.

            IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first written above.

                                  ALEXANDER'S, INC.


                                  By:/s/STEPHEN MANN               
                                     Name:  Stephen Mann
                                     Title:  Chairman


                                  VORNADO REALTY TRUST


                                  By:/s/JOSEPH MACNOW          
                                     Name:  Joseph Macnow
                                     Title:  Vice President and Chief
                                               Financial Officer


                                  INTERSTATE PROPERTIES


                                  By:/s/STEVEN ROTH            
                                     Name:  Steven Roth
                                     General Partner



                                      9

EX-10.3

   1
                                                                Exhibit 10.3

                            VORNADO REALTY TRUST
                           Park 80 West, Plaza II
                      Saddle Brook, New Jersey  07663


                                          February 6, 1995

ALEXANDER'S, INC.
31 West 34th Street
New York, New York  10001


                  Re:   Mortgage Loan Secured By
                        Real Property of Alexander's Inc.

Ladies and Gentlemen:

            Subject to the terms and conditions set forth below, Vornado
Realty Trust or an entity of which Vornado Realty Trust is at least a 95%
preferred shareholder ("Lender") agrees to lend to  Alexander's, Inc., a
Delaware corporation ("Borrower"), and Borrower agrees to borrow from
Lender, on a secured basis as described herein, an aggregate principal
amount of up to SEVENTY-FIVE MILLION DOLLARS ($75,000,000.00) (the "Loan"). 
The Loan will be made pursuant to a Credit Agreement entered into between
Lender and Borrower (the "Credit Agreement") and evidenced by one or more
promissory notes (collectively the "Notes") made by Borrower in favor of
Lender.

A.    The basic terms of the Loan shall be as set forth on Exhibit A
      attached hereto and incorporated herein by reference.

B.    Lender's obligation under this Commitment to close the Loan and
      advance the proceeds thereof is conditioned upon the satisfaction of
      all of the following conditions precedent at or prior to the Closing
      (each of which is solely for the benefit of Lender and may be waived
      by Lender, in whole or in part, in its sole discretion):

            1.    The Loan and the security therefor being evidenced by
      such documentation as Lender's counsel shall deem reasonably
      necessary and appropriate, all of which shall be duly executed and
      delivered and, where necessary in the opinion of Lender's counsel,
      acknowledged by all parties thereto.

            2.    Lender being furnished, at Borrower's expense, with title
      insurance policies with such endorsements as Lender shall require, in
      form and substance 


   2


      satisfactory to Lender and in an aggregate amount equal to the
      aggregate principal amount of the Loan, insuring the mortgages to be
      given in connection with this transaction and as referred to on the
      attached Exhibit A (the "Mortgages"), such policies to be written by
      such title insurance company, and to be with such co-insurance and/or
      re-insurance clause(s), as shall be approved by Lender.

            3.    Lender being furnished, at Borrower's expense, with
      current "as-built" surveys of the properties subject to the Mortgages
      (the "Properties") in form and substance satisfactory to Lender,
      prepared in accordance with standards adopted by the American Land
      Title Association and certified to Lender's title insurer and Lender
      by a land surveyor duly registered and licensed in the States of New
      York and New Jersey, as applicable, and approved by Lender, together
      with a current certificate of such surveyor certifying to Lender's
      title insurer and Lender, among other things, that the survey is true
      and correct.

            4.    Lender being furnished, at Borrower's expense, with a
      favorable opinion of Borrower's independent legal counsel (such
      counsel to be reasonably acceptable to the Lender), local counsel and
      zoning counsel, all in form and substance acceptable to Lender, with
      respect to matters relating to Borrower and the Loan.

            5.    Lender's consummation of the buyout of Citicorp's stock
      position in Borrower.

            6.    Lender's obtaining funds for purposes of making the Loan
      through one or more further borrowings; provided that Lender shall
      use its best efforts to obtain such borrowings (including on a full-
      recourse basis).

            7.    Borrower shall not be in default under any debt agreement
      or leases  after application of the loan proceeds in accordance with
      the terms of the Loan documentation.

            8.    The Management Agreement, substantially in the form
      attached hereto, shall be in effect prior to or concurrent with the
      closing of the Loan. 

            9.    Bankruptcy Court approval of the Loan and the Management
      Agreement and a fairness opinion from an investment bank will be
      required.

            10.   Other conditions customary to transactions of this type.

                                      2

   3


C.    The obligations of Lender hereunder shall terminate at the option of
      Lender if any of the following shall occur on or before the Loan
      Closing Date:

            1.    Borrower fails to fulfill any of the terms and conditions
      of this Commitment within the time and in the manner provided herein.


            2.    From and after the date hereof, Borrower or any
      subsidiary of Borrower (i) files a petition for adjudication as a
      bankrupt, (ii) files a petition or answer seeking reorganization or
      an arrangement under any bankruptcy or similar statute of the United
      States of America or any subdivision thereof or of any foreign
      jurisdiction, (iii) makes a general assignment for the benefit of its
      creditors, (iv) executes a consent to any type of insolvency or
      wage-earner proceeding or to any formal or informal proceeding for
      the dissolution or liquidation of, or the settlement of claims
      against or winding up of affairs of, Borrower or any such subsidiary,
      (v) generally does not pay its debts as they become due, or
      (vi) becomes involved in other legal proceedings or takes other
      actions that, in the reasonable judgment of Lender, materially affect
      the ability of any such person or entity to perform its obligations
      under the Loan or with respect to the Loan.

            3.    From and after the date hereof, there occurs the
      appointment of a custodian, receiver, trustee or liquidator, or
      officer performing similar functions, for Borrower or any subsidiary
      of Borrower, or for any of its or their assets, or the filing against
      Borrower or any subsidiary of Borrower of a petition for adjudication
      as a bankrupt or insolvent or for reorganization under any bankruptcy
      or similar laws of the United States of America or of any subdivision
      thereof or of any foreign jurisdiction, or the institution against
      Borrower or any subsidiary of Borrower of any other type of
      insolvency proceeding or of any formal or informal proceeding for the
      dissolution or liquidation of, or the settlement of claims against or
      winding up of affairs of, Borrower or any subsidiary of Borrower, in
      any such case which has not been dismissed.

            4.    Any United States federal, state, local or municipal law,
      ordinance, rule, regulation or requirement or any applicable
      judgment, decree, determination or court order prevents or prohibits
      Lender from making or holding the Loan or from receiving the interest
      and fees contemplated by this Commitment or, in Lender's judgment,
      has or will have a materially adverse effect upon the profitability
      of, or Lender's ability to make or hold, the Loan (including, without
      limitation, any law or regulation relating to the maximum permissible
      interest rate to be charged in connection with the Loan). 


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   4


            5.    Any litigation or proceeding of any kind is threatened,
      commenced or pending that may affect the validity, priority,
      enforceability or insurability of any lien, security interest or
      other collateral to be granted to Lender in connection with the Loan
      or that may, in the reasonable judgment of Lender, adversely affect
      the cost, nature or time of completion, construction, maintenance or
      operation of the Properties.

            6.    Any material part of the Properties (excluding the
      existing improvements on the Paramus property) is damaged or
      destroyed by fire or other cause.

            7.    There is commenced, pending or (except for the existing
      threatened condemnation proceedings with respect to the 59th Street
      property) threatened against the Properties (or any part thereof) any
      condemnation or other similar proceeding, other than the condemnation
      proceeding related to the Paramus, New Jersey property of Borrower.

D.    Borrower agrees that it will use its best efforts to satisfy the
      conditions set forth herein and will take all actions required to be
      taken (including the prepayment of existing debt prior to or
      contemporaneously with the closing of the Loan, and the payment of
      reasonable fees, expenses and other sums, necessary) to pledge the
      collateral described in Exhibit A attached hereto (or substitute
      collateral acceptable to Lender) to Lender as security for the Loan
      and to effectuate the Loan on the terms and conditions set forth
      herein.  In the event that, notwithstanding Borrower's best efforts,
      Borrower cannot satisfy such conditions, Borrower will take
      commercially reasonable steps to effectuate the intent of this
      commitment.

E.    Borrower further agrees that it will neither solicit for nor accept
      any financing from any party other than Lender prior to the
      expiration of this Commitment without Lender's consent.

F.    This Commitment and the agreements of the parties set forth herein
      shall terminate if the closing of the Loan has not been made on or
      prior to the date which is 45 days after the consummation by Lender
      of the buyout of Citicorp's stock position in Borrower and in any
      event if the Loan is not made by June 30, 1995.

G.    Miscellaneous: 

            1.    Notwithstanding any other provision set forth herein,
      Borrower shall use its best efforts to satisfy all closing conditions
      and to draw down the Loan upon Lender's consummation of the buyout of
      Citicorp's position in Borrower or as soon thereafter as practical.


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            2.    This Commitment is made only to Borrower, and neither
      this Commitment nor any monies which may become payable hereunder,
      nor any moneys deposited hereunder, may be assigned by Borrower
      without the prior written consent of Lender.  Any attempted
      assignment in violation of the immediately preceding sentence shall
      be null and void ab initio.  Any agreement arising hereunder shall be
      solely for the benefit of the parties hereto and no third party shall
      have any rights hereunder.

            3.    Borrower hereby represents and warrants to Lender that it
      has not dealt with any broker or finder in connection with the Loan
      or this Commitment, and agrees to indemnify and hold harmless Lender
      from and against any and all claims which Lender may suffer or incur
      by reason of any claim by any broker or other party (other than a
      broker or party claiming it has dealt with Lender) for a commission,
      fee or other compensation in connection with the Loan or this
      Commitment.

            4.    Borrower represents and agrees that the proceeds of the
      Loan are required for business or commercial purposes, and are not
      intended to be used, and will not be used, for family, household,
      agricultural or personal purposes, and accordingly that truth in
      lending and similar Federal, state, local and municipal laws,
      ordinances, rules, regulations and requirements do not apply to this
      Commitment or the Loan. 

            5.    All instruments and documents to be executed or delivered
      in connection with this transaction shall be subject to the approval
      of the parties and their counsel as to form and content.

            6.    This Commitment is made in the State of New York and
      shall be governed by the laws of the State of New York applicable to
      contracts entered into and to be performed in the State of New York. 

            7.    Upon the execution of the Credit Agreement, the terms of
      this Commitment shall be merged therein and this Commitment shall
      terminate in all respects.
 
            8.    This Commitment constitutes the entire understanding and
      agreement between the parties hereto with respect to this
      transaction, and may not be modified, amended or supplemented except
      pursuant to a written agreement executed by the parties hereto.  No
      waiver, extension, amendment or modification of any term or provision
      hereof shall be binding unless the same shall be in writing and
      signed by the party against whom enforcement of such waiver,
      extension, amendment or modification is sought.



                                      5
   6


            Borrower shall acknowledge its acceptance of the foregoing and
its agreements as set forth herein by signing and delivering to Lender a
copy of this Commitment before 9:30 a.m. on February 6, 1995, at which time
this Commitment, if not so accepted, shall expire.  The terms of this
Commitment shall not be binding on Lender unless such signed copy hereof is
delivered to Lender before the aforesaid time on the aforesaid date. 

                                      Very truly yours, 

                                      VORNADO REALTY TRUST


                                      By:    /s/JOSEPH MACNOW
                                           Name:  Joseph Macnow
                                           Title: Vice President and Chief
                                                    Financial Officer


ACCEPTED AND AGREED TO THIS
6th DAY OF FEBRUARY, 1995:

ALEXANDER'S, INC.


By:      /s/STEPHEN MANN 
      Name:  Stephen Mann
      Title: Chairman



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   7


                                 EXHIBIT A

                          TERM SHEET FOR TERM LOAN


BORROWER:               Alexander's, Inc.

GUARANTORS:             Each Subsidiary of Borrower. 

LENDER:                 Vornado Realty Trust or an affiliate thereof
                        ("Vornado"). 

LOAN AMOUNT:            $68,500,000 with an additional availability of
                        $6,500,000 to be determined by the Lender prior to
                        closing.

USE OF PROCEEDS:        A) Payment of unsecured creditors and other
                           obligations due contemporaneously therewith.
                        B) Pay off Chemical Loan on 59th Street.
                        C) Pay off Chemical Loan to 731 Limited
                           Partnership.
                        D) Payment of Real Estate Taxes then due and
                           payable.
                        E) General business purposes.

TERM:                   3 years

COLLATERAL:             1)    Pledge of stock of all subsidiaries.

                        2)    Fordham Road - First mortgage, provided
                              Lender agrees to accept deeply subordinated
                              second mortgage approved by Lender behind $25
                              million first mortgage from another lender.

                        3)    Flushing - Lockbox for collection of rents
                              and, if reasonably obtainable, first
                              leasehold mortgage.

                        4)    Rego Park - First mortgage, provided Lender
                              agrees to accept deeply subordinated second
                              mortgage approved by Lender behind up to
                              $52.5 million of financing (provided
                              approximately $36.5 million is allocated for
                              construction) from another lender.  Lender
                              further agrees to subordinate to an aggregate
                              of $77.5 million of permanent financing.



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                        5)    Third Avenue - First mortgage.

                        6)    Paramus - Second mortgage behind a $13.1
                              million first mortgage held by New York Life. 
                              Lender will subordinate to an additional
                              $16.9 million of construction financing
                              approved by Lender, of which $7.5 million
                              represents tenant site work reimbursements
                              which will be repaid to Construction Lender
                              when the tenants reimburse the Borrower,
                              thereby reducing the total prior debt to
                              $22.5 million.

                        7)    Kings Plaza Store - First mortgage.  Lender
                              will subordinate to an additional $10 million
                              of construction financing approved by Lender.

                        8)    Kings Plaza Shopping Center - First or second
                              mortgage, if reasonably obtainable.

                        9)    59th Street - First mortgage on the entire
                              square block, subject to a release price of
                              $30 million; provided that such release price
                              is paid in connection with the closing of
                              development or construction financing or a
                              sale of the property; and, provided further,
                              that any such release shall not obviate the
                              restrictions on sales, financings,
                              refinancings and other dispositions set forth
                              below.

                        Any other properties acquired by Borrower shall
                        also be included as collateral for the Loan,
                        subject to preexisting liens, purchase money liens
                        and construction liens as approved by Lender.

                        Where possible the Lender will also receive
                        assignment of leases and security agreement/UCC1
                        filings on fixtures and furnishings, at each
                        Collateral Property.  If Lender requires existing
                        leases to be subordinated to the Loan, Lender must
                        grant nondisturbance agreements as required by
                        leases.  Lender will grant non-disturbance to
                        future tenants provided such tenants meet certain
                        criteria.

                        All financings and refinancings of properties are
                        subject to the review and approval by Lender of the
                        budget for the development or redevelopment of said
                        properties, including a 



                                      2
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                        review of plans and cost items, and the
                        documentation for the senior financing.

NO SALES, FINANCINGS,
REFINANCINGS OR OTHER 
DISPOSITIONS:           No sale, financing, refinancing or other
                        disposition of any property listed under the
                        "COLLATERAL" section above without Lender's
                        consent, which may be withheld for any reason;
                        provided, however, that Lender's consent to the
                        refinancing of existing mortgage debt on any such
                        property and to construction financing on Kings
                        Plaza Store, Paramus, 59th Street and Rego Park to
                        the extent contemplated herein shall not be
                        unreasonably withheld.

CASH COLLATERAL
ACCOUNT:                The proceeds of any sale, financing, refinancing or
                        other disposition of any property shall be used to
                        pay down the then outstanding prior position debt
                        with respect to such property (plus in the case of
                        59th Street, the estimated costs of construction or
                        development of such Property).

                        Borrower will deposit the excess, if any, of such
                        proceeds remaining after paying down such
                        obligations and all other net cash proceeds, from
                        any source whatsoever to the extent not used to pay
                        down such obligations, into a cash collateral
                        account maintained with Lender unless otherwise
                        agreed by Lender.

PREPAYMENT:             Prepayable without premium or penalty at the end of
                        second year.  Prepayable during any year with yield
                        maintenance.

AMORTIZATION:           None required

INTEREST RATE:          The interest rate will be 14% per annum for the
                        first two years of the loan and a fixed interest
                        rate for the third year of the loan fixed at a rate
                        per annum equal to 725 basis points over the
                        one-year treasury bill rate on the first day of the
                        third year.

                        If, as of the closing date, the rate per annum on
                        the two-year treasury notes (the "Treasury Rate")
                        exceeds 7.35% by more than 15 basis points, then
                        the interest rate of 14% will be adjusted upward by
                        the difference between 7.35% and the Treasury Rate. 
                        If, as of the closing date, the Treasury Rate is 



                                      3
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                        lower than 7.05% by more than 15 basis points, then
                        the interest rate of 14% will be adjusted downward
                        by the difference between 7.05% and the Treasury
                        Rate.

INTEREST RESERVE:       $5 million of the Term Loan will not be funded at
                        closing and, until funded, there will be no
                        interest charged to Borrower on the such amount,
                        which shall be considered an Interest Reserve. 
                        Advances from the Interest Reserve will only be
                        used to pay interest payments and then only to the
                        extent that monthly cash flow is insufficient to
                        pay interest on the Loan.  Any funds advanced from
                        the Interest Reserve shall be repaid from
                        subsequent excess cash flows.

FEE:                    2.5% on Loan Amount (including Interest Reserve),
                        to be paid at closing.

EXPENSES:               Borrower will pay out-of-pocket expenses of Lender
                        including, but not limited to, legal expenses and
                        costs related to documentation and closing of the
                        loan, whether or not the transaction closes.

REPORTING
REQUIREMENTS:           Customary.

COVENANTS:              Customary.  There will be a negative covenant on
                        future speculative development (to be defined as
                        development in the absence of pre-leasing more than
                        50% of the projected leasable space on any
                        individual property).

DOCUMENTATION;
PARTICIPATIONS:         Lender may participate or assign the Loan in whole
                        or in part.  The Loan and the collateral securing
                        the Loan may, in the sole discretion of Lender, be
                        evidenced by one or more Notes secured by one or
                        more mortgages.  At Lender's request, Borrower will
                        cooperate with Lender and take all actions
                        necessary to restructure the Loan as one or more
                        loans with additional lenders (provided Borrower
                        shall not be required to expend unreasonable sums).



                                      4