UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended: ~~September~~March 3031, ~~2015~~2016

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

For the transition period from:

Commission File Number:

001-34482

VORNADO REALTY L.P.

(Exact name of registrant as specified in its charter)

Delaware		13-3925979
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

888 Seventh Avenue, New York, New York		10019
(Address of principal executive offices)		(Zip Code)

(212) 894-7000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

o Large Accelerated Filer		o Accelerated Filer
x Non-Accelerated Filer (Do not check if smaller reporting company)		o Smaller Reporting Company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

PART I.		Financial Information:	Page Number
	Item 1.	Financial Statements:
		Consolidated Balance Sheets (Unaudited) as of
		September 30, 2015 and December 31, 2014	3
		March 31, 2016 and December 31, 2015	3
		Consolidated Statements of Income (Unaudited) for the
		Three and Nine Months Ended September 30, 2015 and 2014	4
		Three Months Ended March 31, 2016 and 2015	4
		Consolidated Statements of Comprehensive Income (Unaudited)
		for the Three and Nine Months Ended September 30, 2015 and 2014	5
		for the Three Months Ended March 31, 2016 and 2015	5
		Consolidated Statements of Changes in Equity (Unaudited) for the
		Nine Months Ended September 30, 2015 and 2014	6
		Three Months Ended March 31, 2016 and 2015	6
		Consolidated Statements of Cash Flows (Unaudited) for the
		Nine Months Ended September 30, 2015 and 2014	8
		Three Months Ended March 31, 2016 and 2015	8
		Notes to Consolidated Financial Statements (Unaudited)	10
		Report of Independent Registered Public Accounting Firm	3530
	Item 2.	Management's Discussion and Analysis of Financial Condition
		and Results of Operations	3631
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7457
	Item 4.	Controls and Procedures	7457
PART II.		Other Information:
	Item 1.	Legal Proceedings	7558
	Item 1A.	Risk Factors	7558
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7558
	Item 3.	Defaults Upon Senior Securities	7558
	Item 4.	Mine Safety Disclosures	7558
	Item 5.	Other Information	7558
	Item 6.	Exhibits	7558
SIGNATURES			7659
EXHIBIT INDEX			7760

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VORNADO REALTY L.P.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Amounts in thousands, except unit amounts)			~~September~~March 3031, ~~2015~~2016		December 31, ~~2014~~2015
ASSETS
Real estate, at cost:
	Land		$	4,~~045~~164,~~042~~796	$	34,~~861~~164,~~913~~799
	Buildings and improvements			12,~~278~~358,~~443~~371		1112,~~705~~582,~~749~~671
	Development costs and construction in progress			1,~~389~~305,~~471~~849		1,~~128~~226,~~037~~637
	Leasehold improvements and equipment			~~131~~109,~~760~~536		~~126~~116,~~659~~030
		Total		17,~~844~~938,~~716~~552		1618,~~822~~090,~~358~~137
	Less accumulated depreciation and amortization			(3,~~364~~352,~~932~~986)		(3,~~161~~418,~~633~~267)
Real estate, net				14,~~479~~585,~~784~~566		1314,~~660~~671,~~725~~870
Cash and cash equivalents				~~788~~1,~~137~~673,566		1,~~198~~835,~~477~~707
Restricted cash				~~107~~109,~~965~~147		~~176~~107,~~204~~799
Marketable securities				~~152~~162,~~927~~091		~~206~~150,~~323~~997
Tenant and other receivables, net of allowance for doubtful accounts of $11,640 and $12,210				108,106		109,998
Tenant and other receivables, net of allowance for doubtful accounts of $11,200 and $11,908				97,345		98,062
Investments in partially owned entities				1,~~460~~553,~~178~~250		1,~~240~~550,~~489~~422
Real estate fund investments				~~555~~566,~~414~~696		~~513~~574,~~973~~761
Receivable arising from the straight-lining of rents, net of allowance of $2,922 and $3,190				885,340		787,271
Receivable arising from the straight-lining of rents, net of allowance of $2,539 and $2,751				973,709		931,245
Deferred leasing and financing costs, net of accumulated amortization of $292,767 and $281,109				572,969		475,158
Deferred leasing costs, net of accumulated amortization of $218,709 and $218,239				485,283		480,421
Identified intangible assets, net of accumulated amortization of $190,543 and $199,821				241,814		225,155
Identified intangible assets, net of accumulated amortization of $188,094 and $187,360				218,388		227,901
Assets related to discontinued operations				3536,~~142~~514		237,~~244,481~~020
Other assets				~~584~~411,~~150~~819		~~410~~477,~~066~~088
			$	1920,~~971~~873,~~926~~374	$	21,~~248~~143,~~320~~293
LIABILITIES, REDEEMABLE PARTNERSHIP UNITS AND EQUITY
Mortgages payable			$	9,159,413	$	8,263,165
Mortgages payable, net			$	9,844,242	$	9,513,713
Senior unsecured notes				847,594		1,347,159
Senior unsecured notes, net				844,514		844,159
Accounts payable and accrued expenses				465,045		447,745
Unsecured revolving credit facilities				-		550,000
Deferred revenue				377,951		358,613
Unsecured term loan, net				371,076		183,138
Deferred compensation plan				117,037		117,284
Accounts payable and accrued expenses				447,700		443,955
Liabilities related to discontinued operations				11,520		1,511,362
Deferred revenue				325,013		346,119
Other liabilities				434,980		375,830
Deferred compensation plan				116,824		117,475
	Total liabilities			11,413,540		12,421,158
Liabilities related to discontinued operations				12,902		12,470
Other liabilities				433,863		426,965
	Total liabilities			12,396,134		12,437,994
Commitments and contingencies
Redeemable partnership units:
	Class A units - 12,258,987 and 11,356,550 units outstanding			1,108,457		1,336,780
	Class A units - 12,414,019 and 12,242,820 units outstanding			1,172,256		1,223,793
	Series D cumulative redeemable preferred units - 177,101 and 1 units outstanding			5,428		1,000
	Series D cumulative redeemable preferred units - 177,101 units outstanding			5,428		5,428
		Total redeemable partnership units		1,~~113~~177,~~885~~684		1,~~337~~229,~~780~~221
Equity:
	Partners' capital			8,~~517~~471,~~270~~519		8,~~157~~417,~~544~~454
	Earnings less than distributions			(1,~~878~~999,~~716~~994)		(1,~~505~~766,~~385~~780)
	Accumulated other comprehensive income			4353,~~593~~399		9346,~~267~~921
		Total Vornado Realty L.P. equity		6,~~682~~524,~~147~~924		6,~~745~~697,~~426~~595
Noncontrolling interests in consolidated subsidiaries				~~762~~774,~~354~~632		~~743~~778,~~956~~483
	Total equity			7,~~444~~299,~~501~~556		7,~~489~~476,~~382~~078
			$	1920,~~971~~873,~~926~~374	$	21,~~248~~143,~~320~~293
See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(Amounts in thousands, except per unit amounts)		For the Three Months Ended March 31,				~~For the Nine Months Ended~~
		September 30,				September 30,
		2016		2015
		2015		2014		2015		2014
REVENUES:
REVENUES:
	Property rentals	$	519,492	$	500,274
	Property rentals	$	526,337	$	474,978	$	1,541,454	$	1,420,608
	Tenant expense reimbursements		59,575		66,921
	Tenant expense reimbursements		67,098		65,953		196,234		180,364
	Fee and other income		33,970		39,607
	Fee and other income		34,161		37,779		112,998		114,530
Total revenues			613,037		606,802
Total revenues			627,596		578,710		1,850,686		1,715,502
EXPENSES:
EXPENSES:
	Operating		256,349		254,493
	Operating		256,561		240,088		753,744		707,047
	Depreciation and amortization		142,957		124,122
	Depreciation and amortization		141,920		114,822		402,999		359,814
	General and administrative		48,704		58,492
	General and administrative		36,157		40,384		133,838		128,364
	Impairment loss and acquisition and transaction related costs		165,307		1,981
	Acquisition and transaction related costs		1,518		1,277		7,560		3,629
Total expenses			613,317		439,088
Total expenses			436,156		396,571		1,298,141		1,198,854
Operating (loss) income			(280)		167,714
Operating income			191,440		182,139		552,545		516,648
Loss from partially owned entities			(4,240)		(2,743)
Loss from partially owned entities			(325)		(26,034)		(8,709)		(78,676)
Income from real estate fund investments			11,284		24,089
Income from real estate fund investments			1,665		24,160		52,122		142,418
Interest and other investment income, net			3,518		10,792
Interest and other investment income, net			3,160		7,568		19,618		28,814
Interest and debt expense			(100,489)		(91,674)
Interest and debt expense			(95,344)		(100,817)		(279,110)		(301,042)
Net gain on disposition of wholly owned and partially owned assets			714		1,860
Net gain on disposition of wholly owned and partially owned assets			103,037		2,665		104,897		13,205
(Loss) income before income taxes			(89,493)		110,038
Income before income taxes			203,633		89,681		441,363		321,367
Income tax expense			(2,831)		(971)
Income tax (expense) benefit			(2,856)		(2,652)		84,245		(6,783)
(Loss) income from continuing operations			(92,324)		109,067
Income from continuing operations			200,777		87,029		525,608		314,584
Income from discontinued operations			716		16,179
Income from discontinued operations			34,463		82,168		50,278		118,456
Net (loss) income			(91,608)		125,246
Net income			235,240		169,197		575,886		433,040
Less net income attributable to noncontrolling interests in consolidated subsidiaries			(9,678)		(15,882)
Less net income attributable to noncontrolling interests in
Net (loss) income attributable to Vornado Realty L.P.			(101,286)		109,364
	consolidated subsidiaries		(3,302)		(9,685)		(38,370)		(85,239)
Preferred unit distributions			(20,412)		(19,496)
Net income attributable to Vornado Realty L.P.			231,938		159,512		537,516		347,801
NET (LOSS) INCOME attributable to Class A unitholders		$	(121,698)	$	89,868
Preferred unit distributions			(20,412)		(20,378)		(60,322)		(61,137)
(LOSS) INCOME PER CLASS A UNIT - BASIC:
NET INCOME attributable to Class A unitholders		$	211,526	$	139,134	$	477,194	$	286,664
	(Loss) income from continuing operations, net	$	(0.61)	$	0.37
INCOME PER CLASS A UNIT - BASIC:
	Income from discontinued operations, net		-		0.08
	Income from continuing operations, net	$	0.88	$	0.28	$	2.13	$	0.83
	Net (loss) income per Class A unit	$	(0.61)	$	0.45
	Income from discontinued operations		0.17		0.42		0.25		0.60
	Weighted average units outstanding		200,072		198,675
	Net income per Class A unit	$	1.05	$	0.70	$	2.38	$	1.43
(LOSS) INCOME PER CLASS A UNIT - DILUTED:
	Weighted average units outstanding		199,609		198,322		199,111		198,158
	(Loss) income from continuing operations, net	$	(0.61)	$	0.36
INCOME PER CLASS A UNIT - DILUTED:
	Income from discontinued operations, net		-		0.08
	Income from continuing operations, net	$	0.88	$	0.28	$	2.11	$	0.83
	Net (loss) income per Class A unit	$	(0.61)	$	0.44
	Income from discontinued operations		0.17		0.41		0.25		0.59
	Weighted average units outstanding		200,072		200,749
	Net income per Class A unit	$	1.05	$	0.69	$	2.36	$	1.42
DISTRIBUTIONS PER CLASS A UNIT		$	0.63	$	0.63
	Weighted average units outstanding		201,273		199,940		200,980		199,668
See notes to consolidated financial statements (unaudited).
DISTRIBUTIONS PER CLASS A UNIT		$	0.63	$	0.73	$	1.89	$	2.19
See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(Amounts in thousands)			For the Three Months Ended March 31,				~~For the Nine Months Ended~~
			September 30,				September 30,
			2016		2015
			2015		2014		2015		2014
Net (loss) income			$	(91,608)	$	125,246
Net income			$	235,240	$	169,197	$	575,886	$	433,040
Other comprehensive income (loss):
Other comprehensive income (loss):
	Increase (reduction) in unrealized net gain on available-for-sale securities			11,094		(21,332)
	Reduction in unrealized net gain on available-for-sale securities			(7,064)		(22,764)		(53,396)		(7,761)
	Pro rata share of other comprehensive income of nonconsolidated subsidiaries			6		157
	Pro rata share of other comprehensive loss of
	Reduction in value of interest rate swaps and other			(4,195)		(771)
		nonconsolidated subsidiaries		(114)		(6,028)		(1,148)		(151)
Comprehensive (loss) income				(84,703)		103,300
	(Reduction) increase in value of interest rate swap and other			(289)		4,782		1,788		5,846
Less comprehensive income attributable to noncontrolling interests in consolidated subsidiaries				(9,678)		(15,882)
Comprehensive income				227,773		145,187		523,130		430,974
Comprehensive (loss) income attributable to Vornado Realty L.P.			$	(94,381)	$	87,418
Less comprehensive income attributable to noncontrolling interests
See notes to consolidated financial statements (unaudited).
	in consolidated subsidiaries			(3,302)		(9,685)		(38,370)		(85,239)
Comprehensive income attributable to Vornado Realty L.P.			$	224,471	$	135,502	$	484,760	$	345,735
See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(UNAUDITED)
(Amounts in thousands)															Non-
													Accumulated		controlling
							Class A Units				Earnings		Other		Interests in
			Preferred Units				Owned by Vornado				Less Than		Comprehensive		Consolidated		Total
			Units		Amount		Units		Amount		Distributions		Income ~~(Loss)~~		Subsidiaries		Equity
Balance, December 31, 2014				52,679	$	1,277,026		187,887	$	6,880,518	$	(1,505,385)	$	93,267	$	743,956	$	7,489,382
Balance, December 31, 2015				52,677	$	1,276,954		188,577	$	7,140,500	$	(1,766,780)	$	46,921	$	778,483	$	7,476,078
Net income attributable to Vornado Realty L.P.				-		-		-		-		537,516		-		-		537,516
Net loss attributable to Vornado Realty L.P.				-		-		-		-		(101,286)		-		-		(101,286)
Net income attributable to redeemable
Net loss attributable to redeemable
	partnership units			-		-		-		-		~~(28~~7,~~189)~~487		-		-		~~(28~~7,~~189)~~487
Net income attributable to noncontrolling
	interests in consolidated subsidiaries			-		-		-		-		-		-		389,~~370~~678		389,~~370~~678
Distribution of Urban Edge Properties				-		-		-		-		(464,262)		-		(341)		(464,603)
Distributions to Vornado				-		-		-		-		(118,867)		-		-		(118,867)
Distributions to Vornado				-		-		-		-		(355,945)		-		-		(355,945)
Distributions to preferred unitholders				-		-		-		-		(20,364)		-		-		(20,364)
Distributions to preferred unitholders				-		-		-		-		(60,213)		-		-		(60,213)
Class A Units issued to Vornado:
	Upon redemption of redeemable Class A
		units, at redemption value		-		-		~~437~~157		4614,~~693~~482		-		-		-		4614,~~693~~482
	Under Vornado's Employees' share option plan			-		-		198		14,205		(2,579)		-		-		11,626
	Under Vornado's employees' share option plan			-		-		26		2,166		-		-		-		2,166
	Under Vornado's dividend reinvestment plan			-		-		114		~~1,068~~357		-		-		-		~~1,068~~357
Contributions:
	Real estate fund investments			-		-		-		-		-		-		51,725		51,725
Distributions:
	Real estate fund investments			-		-		-		-		-		-		(7013,~~875~~487)		(7013,~~875~~487)
	Other			-		-		-		-		-		-		(~~397~~152)		(~~397~~152)
Conversion of Series A preferred units
Deferred compensation units and options				-		-		7		536		(186)		-		-		350
	to Class A units			(1)		(41)		2		41		-		-		-		-
Increase in unrealized net gain on
Deferred compensation units and options				-		-		6		2,047		(359)		-		-		1,688
	available-for-sale securities			-		-		-		-		-		11,094		-		11,094
Reduction in unrealized net gain on
Pro rata share of other comprehensive income
	available-for-sale securities			-		-		-		-		-		(53,396)		-		(53,396)
	of nonconsolidated subsidiaries			-		-		-		-		-		6		-		6
Pro rata share of other comprehensive loss
Reduction in value of interest rate swaps				-		-		-		-		-		(4,195)		-		(4,195)
	of nonconsolidated subsidiaries			-		-		-		-		-		(1,148)		-		(1,148)
Increase in value of interest rate swap				-		-		-		-		-		1,783		-		1,783
Adjustments to carry redeemable Class A
	units at redemption value			-		-		-		~~295~~36,~~713~~524		-		-		-		~~295~~36,~~713~~524
Redeemable partnership units' share of above
	adjustments			-		-		-		-		-		~~3,082~~(427)		-		~~3,082~~(427)
Other				-		-		-		-		~~700~~2		5-		~~(84)~~110		~~621~~112
Balance, September 30, 2015				52,678	$	1,276,985		188,541	$	7,240,285	$	(1,878,716)	$	43,593	$	762,354	$	7,444,501
Balance, March 31, 2016				52,677	$	1,276,954		188,771	$	7,194,565	$	(1,999,994)	$	53,399	$	774,632	$	7,299,556
See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CONTINUED
(UNAUDITED)
(Amounts in thousands)															Non-
													Accumulated		controlling
							Class A Units				Earnings		Other		Interests in
			Preferred Units				Owned by Vornado				Less Than		Comprehensive		Consolidated		Total
			Units		Amount		Units		Amount		Distributions		Income ~~(Loss)~~		Subsidiaries		Equity
Balance, December 31, 2013				52,683	$	1,277,225		187,285	$	7,151,309	$	(1,734,839)	$	71,537	$	829,512	$	7,594,744
Balance, December 31, 2014				52,679	$	1,277,026		187,887	$	6,880,518	$	(1,505,385)	$	93,267	$	743,956	$	7,489,382
Net income attributable to Vornado Realty L.P.				-		-		-		-		~~347~~109,~~801~~364		-		-		~~347~~109,~~801~~364
Net income attributable to redeemable
	partnership units			-		-		-		-		(165,~~552~~287)		-		-		(165,~~552~~287)
Net income attributable to noncontrolling
	interests in consolidated subsidiaries			-		-		-		-		-		-		8515,~~239~~882		8515,~~239~~882
Distributions to Vornado				-		-		-		-		(410,724)		-		-		(410,724)
Distribution of Urban Edge Properties				-		-		-		-		(464,262)		-		(341)		(464,603)
Distributions to preferred unitholders				-		-		-		-		(61,099)		-		-		(61,099)
Distributions to Vornado				-		-		-		-		(118,447)		-		-		(118,447)
Class A units issued to Vornado:
Distributions to preferred unitholders				-		-		-		-		(19,484)		-		-		(19,484)
Class A Units issued to Vornado:
	Upon redemption of redeemable Class A
		units, at redemption value		-		-		~~227~~210		2223,~~668~~493		-		-		-		2223,~~668~~493
	Under Vornado's Employees' share option plan			-		-		199		12,350		-		-		-		12,350
	Under Vornado's employees' share option plan			-		-		165		11,679		(2,579)		-		-		9,100
	Under Vornado's dividend reinvestment plan			-		-		133		~~1,387~~338		-		-		-		~~1,387~~338
Contributions:
	Real estate fund investments			-		-		-		-		-		-		551,~~297~~350		551,~~297~~350
	Other			-		-		-		-		-		-		5,000		5,000
Distributions:
	Real estate fund investments			-		-		-		-		-		-		(~~182~~52,~~964~~882)		(~~182~~52,~~964~~882)
	Other			-		-		-		-		-		-		(~~643~~125)		(~~643~~125)
Transfer of noncontrolling interest
Conversion of Series A preferred units to
	in real estate fund investments			-		-		-		-		-		-		(33,028)		(33,028)
	Class A units			-		(12)		1		12		-		-		-		-
Conversion of Series A preferred units
Deferred compensation units and options				-		-		7		1,325		(359)		-		-		966
	to Class A units			(4)		(193)		6		193		-		-		-		-
Deferred compensation units and options				-		-		5		4,646		(340)		-		-		4,306
Reduction in unrealized net gain on
	available-for-sale securities			-		-		-		-		-		(721,~~761~~332)		-		(721,~~761~~332)
Pro rata share of other comprehensive loss
Pro rata share of other comprehensive income
	of nonconsolidated subsidiaries			-		-		-		-		-		~~(151)~~157		-		~~(151)~~157
Increase in value of interest rate swap				-		-		-		-		-		5,846		-		5,846
Reduction in value of interest rate swaps				-		-		-		-		-		(776)		-		(776)
Adjustments to carry redeemable Class A
	units at redemption value			-		-		-		~~(144~~25,~~231)~~349		-		-		-		~~(144~~25,~~231)~~349
Redeemable partnership units' share of above
	adjustments			-		-		-		-		-		~~109~~1,288		-		~~109~~1,288
Other				-		~~(6)~~-		-		~~(297)~~-		~~(2,372)~~-		-5		-(90)		(~~2,675~~85)
Balance, September 30, 2014				52,679	$	1,277,026		187,735	$	7,048,025	$	(1,878,125)	$	69,580	$	708,413	$	7,224,919
Balance, March 31, 2015				52,679	$	1,277,014		188,273	$	6,942,714	$	(2,006,439)	$	72,609	$	757,750	$	7,043,648
See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Amounts in thousands)			For the ~~Nine~~Three Months Ended ~~September~~March 3031,
			2015		2014
			2016		2015
Cash Flows from Operating Activities:
Net income			$	575,886	$	433,040
Net (loss) income			$	(91,608)	$	125,246
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
	Depreciation and amortization (including amortization of deferred financing costs)			420,494		423,959
	Real estate impairment losses			160,700		256
	Straight-lining of rental income			(108,529)		(56,983)
	Depreciation and amortization (including amortization of deferred financing costs)			150,648		131,112
	Net gain on disposition of wholly owned and partially owned assets			(104,897)		(13,205)
	Straight-lining of rental income			(41,626)		(29,474)
	Return of capital from real estate fund investments			91,036		215,676
	Distributions of income from partially owned entities			29,860		15,874
	Reversal of allowance for deferred tax assets			(90,030)		-
	Amortization of below-market leases, net			(17,507)		(12,754)
	Net gains on sale of real estate and other			(65,396)		(57,796)
	Other non-cash adjustments			15,248		15,865
	Distributions of income from partially owned entities			51,650		42,164
	Return of capital from real estate fund investments			14,676		72,208
	Amortization of below-market leases, net			(45,918)		(32,663)
	Net realized and unrealized gains on real estate fund investments			(6,611)		(17,639)
	Net realized and unrealized gains on real estate fund investments			(38,781)		(131,558)
	Loss from partially owned entities			4,240		2,405
	Other non-cash adjustments			35,190		28,691
	Net gain on disposition of wholly owned and partially owned assets			(714)		(1,860)
	Loss from partially owned entities			7,961		77,426
	Net gains on sale of real estate and other			-		(32,243)
	Impairment losses			256		20,842
	Defeasance cost in connection with the refinancing of mortgage notes payable			-		5,589
	Changes in operating assets and liabilities:
		Real estate fund investments		~~(95,010)~~-		(395,~~392~~022)
		Tenant and other receivables, net		~~1,892~~800		~~(2,775)~~975
		Prepaid assets		~~(77~~64,~~899)~~851		~~(85~~62,~~372)~~658
		Other assets		(9220,~~413~~113)		(6813,~~833~~093)
		Accounts payable and accrued expenses		(512,~~799)~~774		36(12,~~949~~691)
		Other liabilities		~~(16~~1,~~168)~~027		(317,~~190~~307)
Net cash provided by operating activities				~~443~~276,~~525~~645		~~828~~194,~~569~~516
Cash Flows from Investing Activities:
	Acquisitions of real estate and other			(388,565)		(95,546)
	Development costs and construction in progress			(127,283)		(88,052)
	Proceeds from sales of real estate and related investments			375,850		335,489
	Additions to real estate			(77,243)		(54,466)
	Development costs and construction in progress			(339,586)		(368,571)
	Investments in partially owned entities			(63,188)		(23,912)
	Additions to real estate			(207,845)		(171,660)
	Distributions of capital from partially owned entities			25,524		13,409
	Restricted cash			201,895		101,592
	Proceeds from sales of real estate and related investments			2,867		334,725
	Investments in partially owned entities			(144,890)		(91,697)
	Restricted cash			(1,348)		1,282
	Distributions of capital from partially owned entities			31,822		8,130
	Acquisitions of real estate and other			(938)		(49,878)
	Investments in loans receivable			(25,845)		(11,380)
	Proceeds from sales and repayments of mortgage and mezzanine loans receivable and other			11		16,763
	Proceeds from repayments of mortgage and mezzanine loans receivable and other			16,781		96,504
Net cash (used in) provided by investing activities				(241,598)		149,871
Net cash used in investing activities				(480,383)		(197,139)
See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(UNAUDITED)
(Amounts in thousands)				For the ~~Nine~~Three Months Ended ~~September~~March 3031,
				2015		2014
				2016		2015
Cash Flows from Financing Activities:
	Proceeds from borrowings			$	2,876,460	$	1,713,285
	Repayments of borrowings			$	(909,617)	$	(907,431)
	Repayments of borrowings				(2,539,677)		(343,354)
	Proceeds from borrowings				887,500		800,000
	Distributions to Vornado				(~~355~~118,~~945~~867)		(~~410~~118,~~724~~447)
	Cash included in the spin-off of Urban Edge Properties				(225,000)		-
	Distributions to redeemable security holders and noncontrolling interests				(21,474)		(60,287)
	Distributions to redeemable security holders and noncontrolling interests				(93,738)		(208,773)
	Distributions to preferred unitholders				(20,364)		(19,484)
	Distributions to preferred unitholders				(60,213)		(61,102)
	Debt issuance and other costs				(16,704)		(5,076)
	Contributions from noncontrolling interests in consolidated subsidiaries				51,725		5,297
	Proceeds received from exercise of Vornado stock options				2,523		12,018
	Debt issuance costs				(37,467)		(40,424)
	Repurchase of Class A units related to equity compensation agreements and related
	Proceeds received from exercise of Vornado share options				15,273		13,738
		tax withholdings and other			(185)		(2,939)
	Repurchase of Class A units related to equity compensation agreements and/or related
	Cash included in the spin-off of Urban Edge Properties				-		(225,000)
		tax withholdings and other			(4,900)		(637)
	Contributions from noncontrolling interests in consolidated subsidiaries				-		51,350
	Purchase of marketable securities in connection with the defeasance of mortgage
Net cash used in financing activities					(197,188)		(475,296)
		notes payable			-		(198,884)
Net decrease in cash and cash equivalents					(162,141)		(130,909)
Net cash (used in) provided by financing activities					(373,482)		468,422
Cash and cash equivalents at beginning of period					1,835,707		1,198,477
Net (decrease) increase in cash and cash equivalents					(410,340)		1,099,852
Cash and cash equivalents at end of period				$	1,673,566	$	1,067,568
Cash and cash equivalents at beginning of period					1,198,477		583,290
Cash and cash equivalents at end of period				$	788,137	$	1,683,142
Supplemental Disclosure of Cash Flow Information:
	Cash payments for interest, excluding capitalized interest of $40,924 and $46,517			$	256,254	$	317,162
	Cash payments for interest, excluding capitalized interest of $7,497 and $8,479			$	91,719	$	91,702
	Cash payments for income taxes			$	72,~~640~~193	$	92,~~407~~175
Non-Cash Investing and Financing Activities:
	Accrued capital expenditures included in accounts payable and accrued expenses			$	113,755	$	87,232
	Adjustments to carry redeemable Class A units at redemption value				36,524		25,349
	Write-off of fully depreciated assets				(187,419)		(18,790)
	Non-cash distribution of Urban Edge Properties:
			Assets	$	~~1,722,263~~-	$	-1,722,263
			Liabilities		~~(1,482,660)~~-		-(1,482,660)
			Equity		~~(239,603)~~-		-(239,603)
	Adjustments to carry redeemable Class A units at redemption value				295,713		(144,231)
	Transfer of interest in real estate to Pennsylvania Real Estate Investment Trust				-		(145,313)
	Transfer of interest in real estate to Pennsylvania Real Estate Investment Trust				(145,313)		-
	Financing assumed in acquisitions				-		62,000
	Write-off of fully depreciated assets				(127,788)		(103,184)
	Accrued capital expenditures included in accounts payable and accrued expenses				95,535		103,032
	Like-kind exchange of real estate:
			Acquisitions		~~80,269~~-		5057,~~159~~722
			Dispositions		~~(213,621)~~-		(5038,~~159~~822)
	Class A units in connection with acquisition				80,000		-
	Receipt of security deposits included in restricted cash and other liabilities				-		42,346
	Financing assumed in acquisitions				62,000		-
	Marketable securities transferred in connection with the defeasance of mortgage
		notes payable			-		198,884
	Defeasance of mortgage notes payable				-		(193,406)
	Elimination of a mortgage and mezzanine loan asset and liability				-		59,375
	Transfer of interest in real estate fund investments to an unconsolidated joint venture				-		(58,564)
	Transfer of noncontrolling interest in real estate fund investments				-		(33,028)
See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. Organization

Vornado Realty L.P. (the “Operating Partnership” and/or the “Company”) is a Delaware limited partnership. Vornado Realty Trust (“Vornado”) is the sole general partner of, and owned approximately 93.6% of the common limited partnership interest in, the Operating Partnership at ~~September~~ 30March 31, ~~2015~~2016. All references to “we,” “us,” “our,” the “Company” and “~~the~~ Operating Partnership” refer to Vornado Realty L.P. and its consolidated subsidiaries.

On January 15, 2015, we completed the spin-off of substantially all of our retail segment comprised of 79 strip shopping centers, three malls, a warehouse park and $225,000,000 of cash to Urban Edge Properties (“UE”) (NYSE: UE)2. AsBasis part of this transaction, we retained 5,717,184 UE operating partnership units (5.4% ownership interest). We are providing transition services to UE for an initial period of up to two years, including information technology, human resources, tax and financial reporting. UE is providing us with leasing and property management services for (i) certain small retail properties that we plan to sell, and (ii) our affiliate, Alexander’s, Inc. (NYSE: ALX) Rego Park retail assets. Steven Roth, Chairman of Vornado’s Board of Trustees and its Chief Executive Officer is a member of the Board of Trustees of UE. The spin-off distribution was effected by Vornado distributing one UE common share for every two Vornado common shares. The historical financial results of UE are reflected in our consolidated financial statements as discontinued operations for all periods presented. Presentation

2The accompanying consolidated financial statements are unaudited and include the accounts of Vornado Realty L.P. ~~Basis~~and its consolidated subsidiaries. All inter-company amounts have been eliminated. In our opinion, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of ~~Presentation~~operations and ~~Significant~~changes ~~Accounting~~in ~~Policies~~cash flows have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2015, as filed with the SEC.

~~Basis~~We have made estimates and assumptions that affect the reported amounts of assets and ~~Presentation~~liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the operating results for the full year.

~~The accompanying consolidated financial statements are unaudited and include the accounts of Vornado Realty L~~3.~~P. and its consolidated subsidiaries. All intercompany~~ Recently ~~amounts~~Issued ~~have~~Accounting been eliminated. In our opinion, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. These condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q of the SEC and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2014, as filed with the SEC.Literature

WeIn ~~have~~May ~~made~~2014, the Financial ~~estimates~~Accounting ~~and~~Standards ~~assumptions~~Board ~~that~~(“FASB”) issued ~~affect~~an ~~the~~update ~~reported~~("ASU ~~amounts~~2014-09") ofestablishing ~~assets~~Accounting ~~and~~Standards ~~liabilities~~Codification (“ASC”) Topic 606, ~~disclosure~~Revenue offrom ~~contingent~~Contracts ~~assets~~with ~~and~~Customers. ASU ~~liabilities~~2014-09 atestablishes ~~the~~a ~~date~~single ofcomprehensive ~~the~~model for entities to use in ~~consolidated~~accounting ~~financial~~for ~~statements~~revenue arising from contracts with customers and supersedes most of the ~~reported~~existing ~~amounts~~revenue ofrecognition ~~revenues~~guidance. ASU ~~and~~2014-09 requires an ~~expenses~~entity ~~during~~to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the ~~reporting~~consideration ~~periods.~~to ~~Actual~~which ~~results~~the ~~could~~entity expects ~~differ~~to ~~from~~be entitled in exchange for those goods or services and also ~~estimates~~requires certain additional disclosures. ~~The~~ASU ~~results~~2014-09 ofis ~~operations~~effective for ~~the~~interim and ~~three~~annual ~~and~~reporting ~~nine~~periods ~~months~~in ~~ended September~~fiscal 30years that begin after December 15, ~~2015~~2017. We are ~~not~~currently ~~necessarily~~evaluating ~~indicative~~the impact of the ~~operating~~adoption ~~results~~of ~~for~~ASU 2014-09 on our ~~the~~consolidated ~~full~~financial ~~year~~statements.

Certain prior year balances have been reclassified in order to conform to the current period presentation. Beginning in the three months ended March 31, 2015, the Company classifies signage revenue within “property rentals”. For the three and nine months ended September 30, 2014, $7,698,000 and $25,889,000, respectively, related to signage revenue has been reclassified from “fee and other income” to “property rentals” to conform to the current period presentation. 10

~~Significant Accounting~~VORNADO ~~Policies~~REALTY L.P.

~~Condominium~~NOTES ~~Units~~TO ~~Held~~CONSOLIDATED ~~For~~FINANCIAL ~~Sale: Pursuant to~~STATEMENTS ~~ASC 605~~-~~35-25-88,~~ Revenue Recognition: Completed Contract Method, revenue from condominium unit sales is recognized upon closing of the sale, as all conditions for full profit recognition have not been met until that time. We use the relative sales value method to allocate costs to individual condominium units. CONTINUED

We(UNAUDITED) ~~are constructing a residential condominium tower containing 392,000 salable square feet on our 220 Central Park South development site.~~

103. Recently Issued Accounting Literature - continued

~~VORNADO~~In ~~REALTY~~June L2014, the FASB issued an update (“ASU 2014-12”) to ASC Topic 718, Compensation – Stock Compensation.P ASU 2014-12 requires an entity to treat performance targets that can be met after the requisite service period of a share based award has ended, as a performance condition that affects vesting. ASU 2014-12 is effective for interim and annual reporting periods in fiscal years that began after December 15, 2015. The adoption of this update as of January 1, 2016, did not have any impact on our consolidated financial statements.

~~NOTES~~In TOFebruary ~~CONSOLIDATED~~2015, ~~FINANCIAL~~the ~~STATEMENTS~~FASB issued an update (“ASU 2015-02”) ~~CONTINUED~~Amendments to the Consolidation Analysis to ASC Topic 810, Consolidation. ASU 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the amendments: (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities, (ii) eliminate the presumption that a general partner should consolidate a limited partnership, (iii) affect the consolidation analysis of reporting entities that are involved with VIEs, and (iv) provide a scope exception for certain entities. ASU 2015-02 is effective for interim and annual reporting periods beginning after December 15, 2015. The adoption of this update on January 1, 2016 resulted in the identification of additional VIEs, but did not have an impact on our consolidated financial statements other than additional disclosures (see Note 12 - Variable Interest Entities (“VIEs”)).

In January 2016, the FASB issued an update (~~UNAUDITED~~“ASU 2016-01”) Recognition and Measurement of Financial Assets and Financial Liabilities to ASC Topic 825, Financial Instruments (“ASC 825”). ASU 2016-01 amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments, including the requirement to measure certain equity investments at fair value with changes in fair value recognized in net income. ASU 2016-01 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. We are currently evaluating the impact of the adoption of ASU 2016-01 on our consolidated financial statements.

2In February 2016, the FASB issued (“ASU 2016-02”) Leases, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. ~~Basis~~ ASU 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of ~~Presentation~~whether or not the lease is effectively a financed purchase. Lessees are required to record a right-of-use asset and ~~Significant~~a ~~Accounting Policies~~lease liability for all leases with a term of greater than 12 months. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. Lessees will recognize expense based on the effective interest method for finance leases or on a straight-line ~~continued~~basis for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact of the adoption of ASU 2016-02 on our consolidated financial statements.

~~Significant~~ In March 2016, the FASB issued an update (“ASU 2016-09”) Improvements to Employee Share-Based Payment Accounting ~~Policies~~to ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). ASU 2016-09 ~~continued~~amends several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2017. We are currently evaluating the impact of the adoption of ASU 2016-09 on our consolidated financial statements.

Income Taxes: As a limited partnership, our partners are required to report their respective share of taxable income on their individual tax returns. The provision for income taxes in our consolidated financial statements relates to certain taxable REIT subsidiaries pursuant to an amendment to the Internal Revenue Code that became effective January 1, 2001. Taxable REIT subsidiaries may participate in non-real estate related activities and/or perform non-customary services for tenants and are subject to Federal and State income tax at regular corporate tax rates.11

AtVORNADO ~~September~~REALTY 30, 2015 and December 31, 2014, our taxable REIT subsidiaries had deferred tax assets related to net operating loss carryforwards of $95,419,000 and $94,100,000, respectively, which are included in “other assets” on our consolidated balance sheetsL. Prior to the quarter ended June 30, 2015, there was a full valuation allowance against these deferred tax assets because we had not determined that it is more-likely-than-not that we would use the net operating loss carryforwards to offset future taxable incomeP. Based upon residential condominium unit sales, among other factors, we have concluded that it is more-likely-than-not that we will generate sufficient taxable income to realize these deferred tax assets. Accordingly, during the second quarter of 2015, we reversed $90,030,000 of the allowance for deferred tax assets and recognized an income tax benefit in our consolidated statements of income.

~~3. Recently Issued~~NOTES ~~Accounting~~TO ~~Literature~~CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

~~In April 2014, the Financial Accounting Standards Board~~ (~~“FASB”~~UNAUDITED) issued an update (“ASU 2014-08”) Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity to ASC Topic 205, Presentation of Financial Statements and ASC Topic 360, Property Plant and Equipment. Under ASU 2014-08, only disposals that represent a strategic shift that has (or will have) a major effect on the entity’s results and operations would qualify as discontinued operations. In addition, ASU 2014-08 expands the disclosure requirements for disposals that meet the definition of a discontinued operation and requires entities to disclose information about disposals of individually significant components that do not meet the definition of discontinued operations. ASU 2014-08 is effective for interim and annual reporting periods in fiscal years that began after December 15, 2014. Upon adoption of this standard on January 1, 2015, individual properties sold in the ordinary course of business are not expected to qualify as discontinued operations. The financial results of UE and certain other retail assets are reflected in our consolidated financial statements as discontinued operations for all periods presented (see Note 8 – Dispositions for further details).

~~In May 2014, the FASB issued an update ("ASU 2014-09") establishing ASC Topic 606, Revenue from Contracts with Customers~~4. ~~ASU~~ Real ~~2014-09~~Estate ~~establishes~~Fund a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures. ASU 2014-09 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2017. We are currently evaluating the impact of the adoption of ASU 2014-09 on our consolidated financial statements. Investments

11We are the general partner and investment manager of Vornado Capital Partners Real Estate Fund (the “Fund”), which has an eight-year term and a three-year investment period that ended in July 2013. During the investment period, the Fund was our exclusive investment vehicle for all investments that fit within its investment parameters, as defined. The Fund is accounted for under ASC 946, Financial Services – Investment Companies (“ASC 946”) and its investments are reported on its balance sheet at fair value, with changes in value each period recognized in earnings. We consolidate the accounts of the Fund into our consolidated financial statements, retaining the fair value basis of accounting.

~~VORNADO~~We ~~REALTY~~are Lalso the general partner and investment manager of Crowne Plaza Times Square Hotel Co-Investment (the “Co-Investment”), which owns a 24.P7% interest in the Crowne Plaza Times Square Hotel. The Fund owns the remaining 75.3% interest. The Co-Investment is also accounted for under ASC 946. We consolidate the accounts of the Co-Investment into our consolidated financial statements, retaining the fair value basis of accounting.

~~NOTES~~At TOMarch ~~CONSOLIDATED~~31, ~~FINANCIAL~~2016, ~~STATEMENTS~~we had six real estate fund investments with an aggregate fair value of $566,696,000, or $200,549,000 in excess of cost, and had remaining unfunded commitments of $102,212,000, of which our share was $25,553,000. Below is a summary of income from the Fund and the Co-Investment ~~CONTINUED~~for the three months ended March 31, 2016 and 2015.

(UNAUDITED)

(Amounts in thousands)		For the Three Months Ended March 31,
		2016		2015
Net investment income		$	4,673	$	6,450
Net realized gain on exited investments			14,676		24,705
Previously recorded unrealized gain on exited investment			(14,254)		(23,279)
Net unrealized gains on held investments			6,189		16,213
Income from real estate fund investments			11,284		24,089
Less income attributable to noncontrolling interests			(5,973)		(13,539)
Income from real estate fund investments attributable to Vornado Realty L.P.⁽¹⁾		$	5,311	$	10,550


(1)	Excludes management, leasing and development fees of $760 and $704 for the three months ended March 31, 2016 and 2015, respectively, which are included as a component of "fee and other income" on our consolidated statements of income.

35. ~~Recently~~Marketable ~~Issued~~Securities ~~Accounting Literature - continued~~

InBelow ~~June~~is ~~2014, the~~a ~~FASB~~summary ~~issued~~of anour ~~update~~marketable ~~(“ASU~~securities ~~2014-12”)~~portfolio toas ~~ASC Topic 718, Compensation – Stock Compensation. ASU 2014-12 requires an entity to treat performance targets that can be met after the requisite service period~~ of aMarch ~~share based award has ended~~31, as2016 ~~a performance condition that affects vesting. ASU 2014-12 is effective for interim~~ and ~~annual reporting periods in fiscal years that begin~~ ~~after~~ December 1531, 2015. ~~We are currently evaluating the impact of the adoption of ASU 2014-12 on our consolidated financial statements.~~

In February 2015, the FASB issued an update (“ASU 2015-02”) Amendments to the Consolidation Analysis to ASC Topic 810, Consolidation. ASU 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal entities. Specifically, the amendments: (i) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities, (ii) eliminate the presumption that a general partner should consolidate a limited partnership, (iii) affect the consolidation analysis of reporting entities that are involved with VIEs, and (iv) provide a scope exception for certain entities. ASU 2015-02 is effective for interim and annual reporting periods beginning after December 15, 2015. We are currently evaluating the impact of the adoption of ASU 2015-02 on our consolidated financial statements.


(Amounts in thousands)		As of March 31, 2016						As of December 31, 2015
				GAAP		Unrealized				GAAP		Unrealized
		Fair Value		Cost		Gain		Fair Value		Cost		Gain
Equity securities:
	Lexington Realty Trust	$	158,833	$	72,549	$	86,284	$	147,752	$	72,549	$	75,203
	Other		3,258		-		3,258		3,245		-		3,245
		$	162,091	$	72,549	$	89,542	$	150,997	$	72,549	$	78,448

In April 2015, the FASB issued an update (“ASU 2015-03”) Simplifying the Presentation of Debt Issuance Costs to ASC Topic 835, Interest. ASU 2015-03 requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability to which they relate, consistent with debt discounts, as opposed to being presented as assets. ASU 2015-03 is effective for interim and annual reporting periods in fiscal years that begin after December 15, 2015. The adoption of this update on January 1, 2016 will not have a material impact on our consolidated financial statements.12

4VORNADO REALTY L. ~~Acquisitions~~P.

OnNOTES ~~January~~TO ~~20,~~CONSOLIDATED ~~2015,~~FINANCIAL weSTATEMENTS ~~and one of our real estate fund’s limited partners co~~-~~invested~~ ~~with the Fund to buy out the Fund’s joint venture partner’s 57% interest in the Crowne Plaza Times Square Hotel (see Note 5 – Real Estate Fund Investments).~~CONTINUED

On(UNAUDITED) March 18, 2015, we acquired the Center Building, a 437,000 square foot office building, located at 33-00 Northern Boulevard in Long Island City, New York, for $142,000,000, including the assumption of an existing $62,000,000, 4.43% mortgage maturing in October 2018.

On June 2, 2015, we completed the acquisition of 150 West 34th Street, a 78,000 square foot retail property leased to Old Navy through May 2019, and 226,000 square feet of additional zoning air rights, for approximately $355,000,0006. At Investments ~~closing~~in wePartially ~~completed~~Owned ~~a $205,000,000 financing of the property (see Note 10 – Debt).~~Entities

On July 31Alexander’s, 2015, we acquired 260 Eleventh Avenue, a 235,000 square foot office property leased to the City of New York through 2021 with two five-year renewal options, a 10,000 square foot parking lot and additional air rightsInc. The transaction(“Alexander’s”) is(NYSE: structured as a 99-year ground lease with an option to purchase the land for $110,000,000. The $3,900,000 annual ground rent and the purchase option price escalate annually at the lesser of 1.5% or CPI. The buildings were purchased for 813,900 newly issued Operating Partnership units valued at approximately $80,000,000.ALX)

OnAs ~~September~~of 25March 31, ~~2015~~2016, we ~~acquired~~own ~~265~~1,654,068 ~~West 34th~~Alexander’s ~~Street~~common shares, representing a ~~1,700~~32.4% ~~square~~interest ~~foot~~in ~~retail~~Alexander’s. We ~~property~~account ~~and~~for our 15investment in Alexander’s under the equity method. We manage,~~200~~ ~~square~~lease ~~feet~~and develop Alexander’s properties pursuant to agreements which expire in March of ~~additional~~each ~~zoning~~year ~~air~~and ~~rights,~~are ~~for~~automatically ~~approximately $28,500,000~~renewable.

12As of March 31, 2016, the market value (“fair value” pursuant to ASC 820) of our investment in Alexander’s, based on Alexander’s March 31, 2016 closing share price of $380.55, was $629,456,000, or $501,192,000 in excess of the carrying amount on our consolidated balance sheet. As of March 31, 2016, the carrying amount of our investment in Alexander’s, excluding amounts owed to us, exceeds our share of the equity in the net assets of Alexander’s by approximately $40,162,000. The majority of this basis difference resulted from the excess of our purchase price for the Alexander’s common stock acquired over the book value of Alexander’s net assets. Substantially all of this basis difference was allocated, based on our estimates of the fair values of Alexander’s assets and liabilities, to real estate (land and buildings). We are amortizing the basis difference related to the buildings into earnings as additional depreciation expense over their estimated useful lives. This depreciation is not material to our share of equity in Alexander’s net income. The basis difference related to the land will be recognized upon disposition of our investment.

~~VORNADO~~Urban ~~REALTY~~Edge ~~L.P.~~Properties (“UE”) (NYSE: UE)

~~NOTES~~As TOof ~~CONSOLIDATED~~March ~~FINANCIAL~~31, ~~STATEMENTS~~2016, we own 5,717,184 UE operating partnership units, representing a 5.4% ownership interest in UE. We account for our investment in UE under the equity method and record our share of UE’s net income or loss on a one-quarter ~~CONTINUED~~lag basis. During 2015, we provided transition services to UE, primarily for information technology, human resources, tax and financial planning. In 2016, we continue to provide UE information technology support. UE is providing us with leasing and property management services for (i) certain small retail properties that we plan to sell, and (ii) our affiliate, Alexander’s, Rego Park retail assets. As of March 31, 2016, the fair value of our investment in UE, based on UE’s March 31, 2016 closing share price of $25.84, was $147,732,000, or $121,505,000 in excess of the carrying amount on our consolidated balance sheet.

Pennsylvania Real Estate Investment Trust (~~UNAUDITED~~“PREIT”) (NYSE: PEI)

5As of March 31, 2016, we own 6,250,000 PREIT operating partnership units, representing an 8. ~~Real~~1% ~~Estate~~interest ~~Fund~~in ~~Investments~~PREIT. We account for our investment in PREIT under the equity method and record our share of PREIT’s net income or loss on a one-quarter lag basis. As of March 31, 2016, the fair value of our investment in PREIT, based on PREIT’s March 31, 2016 closing share price of $21.85, was $136,563,000, or $8,495,000 in excess of the carrying amount on our consolidated balance sheet. As of March 31, 2016, the carrying amount of our investment in PREIT exceeds our share of the equity in the net assets of PREIT by approximately $64,827,000. The majority of this basis difference resulted from the excess of the fair value of the PREIT operating units received over our share of the book value of PREIT’s net assets. Substantially all of this basis difference was allocated, based on our estimates of the fair values of PREIT’s assets and liabilities, to real estate (land and buildings). We are amortizing the basis difference related to the buildings into earnings as additional depreciation expense over their estimated useful lives. This depreciation is not material to our share of equity in PREIT’s net loss. The basis difference related to the land will be recognized upon disposition of our investment.

WeOne ~~are~~Park the general partner and investment manager of Vornado Capital Partners Real Estate Fund (the “Fund”), which has an eight-year term and a three-year investment period that ended in July 2013. During the investment period, the Fund was our exclusive investment vehicle for all investments that fit within its investment parameters, as defined. The Fund is accounted for under ASC 946, Financial Services – Investment Companies (“ASC 946”) and its investments are reported on its balance sheet at fair value, with changes in value each period recognized in earnings. We consolidate the accounts of the Fund into our consolidated financial statements, retaining the fair value basis of accounting.Avenue

On ~~January~~March 207, ~~2015~~2016, we ~~and~~completed ~~one~~a of$300,000,000 ~~the~~refinancing ~~Fund’s~~of ~~limited~~our ~~partners~~55% ~~co-invested~~owned ~~with the Fund to buy out the Fund’s~~ joint venture, ~~partner’s~~One ~~57%~~Park ~~interest in the Crowne Plaza Times Square Hotel (the “Co-Investment”). The purchase price for the 57% interest was approximately $95~~Avenue,~~000,000 (our~~ ~~share~~a ~~$39~~947,000~~,000)~~ ~~which~~square ~~valued~~foot Manhattan ~~the~~office ~~property at approximately $480,000,000~~building. The ~~property~~loan ismatures ~~encumbered~~in byMarch a2021 ~~$310,000,000~~and ~~mortgage~~is ~~loan~~interest ~~bearing~~only ~~interest~~ at LIBOR plus 21.8075% ~~which matures in December 2018 with a one-year extension option~~(2. ~~Our~~19% ~~aggregate~~at ~~ownership~~March ~~interest~~31, ~~in the property increased to 33% from 11%~~2016). The ~~Co-Investment~~property ~~is also accounted for under ASC~~was ~~946~~previously ~~and~~encumbered isby ~~included as~~ a ~~component~~4.995%, of$250,000,000 ~~“real~~mortgage ~~estate~~maturing ~~fund~~in ~~investments” on our~~March ~~consolidated balance sheet~~2016.

OnMezzanine ~~March~~Loan ~~25,~~– ~~2015, the Fund completed the~~New ~~sale of 520 Broadway in Santa Monica, CA for $91,650,000. The Fund realized a $23,768,000 net gain over the holding period.~~York

AtOn ~~September~~March 3017, ~~2015~~2016, we ~~had~~entered ~~six~~into ~~real~~a joint ~~estate~~venture, ~~fund~~in ~~investments~~which ~~with~~we anown ~~aggregate~~a ~~fair~~33.3% ~~value~~interest, ofwhich owns a $~~555~~138,~~414~~240,000, ormezzanine loan. The ~~$190~~interest rate is LIBOR plus 8.875% (9.32% at March 31,~~620,000~~ 2016) and the debt matures in ~~excess~~November of2016, ~~cost~~with two three-month extension options. At March 31, ~~and~~2016, ~~had~~the ~~remaining~~joint ~~unfunded~~venture ~~commitments~~has ofan $~~102~~11,~~212~~760,000 remaining commitment, of which our share ~~was~~is $253,~~553~~920,000. ~~Below~~The isjoint aventure’s ~~summary~~investment ofis ~~income~~subordinate to ~~from~~$350,000,000 ~~the~~of ~~Fund~~third ~~and the~~party ~~Co-Investment~~debt. We account for ~~the~~our ~~three~~investment ~~and~~in ~~nine~~the joint ~~months~~venture ~~ended~~under ~~September~~the ~~30,~~equity ~~2015 and 2014~~method.

(Amounts in thousands)		For the Three Months Ended				For the Nine Months Ended
		September 30,				September 30,
		2015		2014		2015		2014
Net investment income		$	5,116	$	3,829	$	13,716	$	10,860
Net realized (losses) gains on exited investments			(907)		51,584		24,684		126,653
Previously recorded unrealized gains on exited investments			-		(49,586)		(23,279)		(50,316)
Net unrealized (losses) gains on held investments			(2,544)		18,333		37,001		55,221
Income from real estate fund investments			1,665		24,160		52,122		142,418
Less income attributable to noncontrolling interests			(42)		(8,588)		(29,453)		(81,217)
Income from real estate fund investments attributable to Vornado Realty L.P.(1)		$	1,623	$	15,572	$	22,669	$	61,201
(1)	Excludes property management, leasing and development fees of $678 and $669 for the three months ended September 30, 2015 and 2014, respectively, and $2,015 and $1,925 for the nine months ended September 30, 2015 and 2014, respectively, which are included as a component of "fee and other income" on our consolidated statements of income.

~~6. Marketable~~VORNADO ~~Securities~~REALTY L.P.

~~Below~~NOTES isTO ~~a summary~~CONSOLIDATED ofFINANCIAL ~~our~~STATEMENTS ~~marketable~~- ~~securities portfolio as of September 30, 2015 and December 31, 2014.~~CONTINUED

(Amounts in thousands)		As of September 30, 2015						As of December 31, 2014
				GAAP		Unrealized				GAAP		Unrealized
		Fair Value		Cost		Gain		Fair Value		Cost		Gain
Equity securities:
	Lexington Realty Trust	$	149,599	$	72,549	$	77,050	$	202,789	$	72,549	$	130,240
	Other		3,328		-		3,328		3,534		-		3,534
		$	152,927	$	72,549	$	80,378	$	206,323	$	72,549	$	133,774

(UNAUDITED)

136. Investments in Partially Owned Entities – continued

~~VORNADO~~Below ~~REALTY~~are Lschedules summarizing our investments in, and income (loss) from, partially owned entities.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(Amounts in thousands)		Percentage
		Ownership at		Balance as of
		March 31, 2016		March 31, 2016		December 31, 2015
Investments:
	Partially owned office buildings⁽¹⁾		Various	$	869,233	$	909,782
	Alexander’s		32.4%		128,264		133,568
	PREIT		8.1%		128,068		133,375
	India real estate ventures		4.1%-36.5%		48,037		48,310
	UE		5.4%		26,227		25,351
	Other investments⁽²⁾		Various		353,421		300,036
				$	1,553,250	$	1,550,422


(1)	Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue, 512 West 22nd Street and others.
(2)	Includes interests in Independence Plaza, 85 Tenth Avenue, Fashion Center Mall, 50-70 West 93rd Street, Toys "R" Us, Inc. (which has a carrying amount of zero) and others.

(UNAUDITED)

(Amounts in thousands)			Percentage
			Ownership at		For the Three Months Ended March 31,
			March 31, 2016		2016		2015
Our Share of Net Income (Loss):
	Alexander's (see page 13 for details):
		Equity in net income		32.4%	$	6,937	$	5,594
		Management, leasing and development fees				1,725		2,097
						8,662		7,691

	UE (see page 13 for details):
		Equity in net earnings		5.4%		876		-
		Management fees				209		584
						1,085		584

	Partially owned office buildings⁽¹⁾			Various		(14,249)		(9,296)

	PREIT (see page 13 for details)			8.1%		(4,288)		-

	India real estate ventures			4.1%-36.5%		(686)		(109)

	Other investments⁽²⁾			Various		5,236		(1,613)

					$	(4,240)	$	(2,743)


(1)	Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue, 512 West 22nd Street and others.
(2)	Includes interests in Independence Plaza, 85 Tenth Avenue, Fashion Center Mall, 50-70 West 93rd Street, Toys "R" Us, Inc. and others.

~~7. Investments in Partially Owned Entities~~14

~~Toys~~VORNADO ~~“R”~~REALTY ~~Us (“Toys”)~~L.P.

AsNOTES ofTO ~~September~~CONSOLIDATED ~~30,~~FINANCIAL ~~2015, we~~STATEMENTS ~~own 32.5% of Toys. We have not guaranteed any of Toys’ obligations and are not committed to provide any support to Toys. Pursuant to ASC 323~~-~~10-35-20,~~ we discontinued applying the equity method for our Toys’ investment when the carrying amount was reduced to zero in the third quarter of 2014. We will resume application of the equity method if, during the period the equity method has been suspended, our share of unrecognized net income exceeds our share of unrecognized net losses.CONTINUED

In(UNAUDITED) ~~the first quarter of 2014, we recognized our share of Toys’ fourth quarter net income of $75,196,000 and a corresponding non-cash impairment loss of the same amount.~~

~~Below is a summary of Toys’ latest available financial information on a purchase accounting basis:~~7. Dispositions

(Amounts in thousands)						Balance as of
						August 1, 2015		November 1, 2014
Balance Sheet:
	Assets					$	9,732,000	$	11,267,000
	Liabilities						9,056,000		10,377,000
	Noncontrolling interests						85,000		82,000
	Toys “R” Us, Inc. equity (1)						591,000		808,000
(Amounts in thousands)		For the Three Months Ended				For the Nine Months Ended
		August 1, 2015		August 2, 2014		August 1, 2015		August 2, 2014
Income Statement:
	Total revenues	$	2,293,000	$	2,440,000	$	9,601,000	$	10,186,000
	Net loss attributable to Toys		(108,700)		(133,000)		(44,700)		(244,000)
(1)	At September 30, 2015, the carrying amount of our investment in Toys is less than our share of Toys' equity by approximately $191,859. This basis difference results primarily from non-cash impairment losses aggregating $355,953 that we have recognized through September 30, 2015. We have allocated the basis difference primarily to Toys' real estate.

The tables below set forth the assets and liabilities related to discontinued operations at March 31, 2016 and December 31, 2015 and their combined results of operations and cash flows for the three months ended March 31, 2016 and 2015.

Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX)

(Amounts in thousands)	Balance as of
	March 31, 2016		December 31, 2015
Assets related to discontinued operations:
Real estate, net	$	29,517	$	29,561
Other assets		6,997		7,459
	$	36,514	$	37,020

Liabilities related to discontinued operations:
Other liabilities	$	12,902	$	12,470
	$	12,902	$	12,470


(Amounts in thousands)	For the Three Months Ended March 31,
	2016		2015
Income from discontinued operations:
Total revenues	$	1,182	$	20,296
Total expenses		466		13,373
		716		6,923
Transaction related costs (primarily UE spin off)		-		(22,645)
Net gain on sale of lease position in Geary Street, CA		-		21,376
Net gains on sale of real estate		-		10,867
Impairment losses		-		(256)
Pretax income from discontinued operations		716		16,265
Income tax expense		-		(86)
Income from discontinued operations	$	716	$	16,179


Cash flows related to discontinued operations:
Cash flows from operating activities	$	1,654	$	(36,672)
Cash flows from investing activities		-		310,069

As of September 30, 2015, we own 1,654,068 Alexander’s common shares, or approximately 32.4% of Alexander’s common equity. We manage, lease and develop Alexander’s properties pursuant to agreements which expire in March of each year and are automatically renewable. 15

AsVORNADO ofREALTY September 30, 2015, the market value (“fair value” pursuant to ASC 820, Fair Value Measurements and Disclosures (“ASC 820”)) of our investment in Alexander’s, based on Alexander’s September 30, 2015 closing share price of $374L.~~00, was $618,621,000, or $487,226,000 in excess of the carrying amount on our consolidated balance sheet~~P. As of September 30, 2015, the carrying amount of our investment in Alexander’s exceeds our share of the equity in the net assets of Alexander’s by approximately $40,527,000. The majority of this basis difference resulted from the excess of our purchase price for the Alexander’s common stock acquired over the book value of Alexander’s net assets. Substantially all of this basis difference was allocated, based on our estimates of the fair values of Alexander’s assets and liabilities, to real estate (land and buildings). We are amortizing the basis difference related to the buildings into earnings as additional depreciation expense over their estimated useful lives. This depreciation is not material to our share of equity in Alexander’s net income. The basis difference related to the land will be recognized upon disposition of our investment.

14NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

~~VORNADO~~(UNAUDITED) ~~REALTY L.P.~~

~~NOTES~~8. Identified TOIntangible ~~CONSOLIDATED~~Assets ~~FINANCIAL~~and ~~STATEMENTS - CONTINUED~~Liabilities

The following summarizes our identified intangible assets (~~UNAUDITED~~primarily above-market leases) and liabilities (primarily acquired below-market leases) as of March 31, 2016 and December 31, 2015.

7. Investments in Partially Owned Entities - continued

(Amounts in thousands)	Balance as of
	March 31, 2016		December 31, 2015
Identified intangible assets:
Gross amount	$	406,482	$	415,261
Accumulated amortization		(188,094)		(187,360)
Net	$	218,388	$	227,901
Identified intangible liabilities (included in deferred revenue):
Gross amount	$	607,241	$	643,488
Accumulated amortization		(307,858)		(325,340)
Net	$	299,383	$	318,148

~~Alexander’s~~Amortization of acquired below-market leases, ~~Inc~~net of acquired above-market leases, resulted in an increase to rental income of $17,507,000 and $12,450,000 for the three months ended March 31, 2016 and 2015, respectively. Estimated ~~(“Alexander’s”)~~annual amortization of acquired below-market leases, ~~(NYSE:~~net ~~ALX)~~of acquired above-market ~~continued~~leases, for each of the five succeeding years commencing January 1, 2017 is as follows:

Below is a summary of Alexander’s latest available financial information:

(Amounts in thousands)
2017	$	44,463
2018		42,991
2019		30,973
2020		23,320
2021		18,263

(Amounts in thousands)						Balance as of
						September 30, 2015		December 31, 2014
Balance Sheet:
	Assets					$	1,457,000	$	1,423,000
	Liabilities						1,112,000		1,075,000
	Stockholders' equity						345,000		348,000
(Amounts in thousands)		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2015		2014		2015		2014
Income Statement:
	Total revenues	$	52,000	$	50,000	$	155,000	$	149,000
	Net income attributable to Alexander’s		18,000		18,000		53,000		50,000

Amortization of all other identified intangible assets (a component of depreciation and amortization expense) was $7,793,000 and $6,185,000 for the three months ended March 31, 2016 and 2015, respectively. Estimated annual amortization of all other identified intangible assets including acquired in-place leases, customer relationships, and third party contracts for each of the five succeeding years commencing January 1, 2017 is as follows:

Urban Edge Properties (“UE”) (NYSE: UE)

(Amounts in thousands)
2017	$	24,427
2018		20,063
2019		15,779
2020		12,345
2021		10,957

AsWe ~~part~~are ofa ~~our~~tenant ~~spin-off~~under ofground ~~substantially~~leases ~~all~~for ~~of our~~certain ~~retail segment to UE on January 15, 2015 (see Note 1 – Organization),~~properties. weAmortization ~~retained~~of ~~5,717,184~~these UEacquired ~~operating~~below-market ~~partnership units~~leases, ~~representing~~net ~~a 5.4% ownership interest in UE. We account for our investment in UE under the equity method and record our share~~ of ~~UE’s net income or loss on a one~~above-~~quarter~~market ~~lag basis. We are providing transition~~leases, ~~services~~resulted toin ~~UE for~~ an ~~initial~~increase ~~period of up~~ to ~~two~~rent ~~years,~~expense ~~including~~of ~~information technology~~$458,000 ~~human~~and ~~resources~~$458,000 ~~tax and financial reporting. UE is providing us with leasing and property management services~~ for ~~(i)~~the ~~certain small retail~~three ~~properties~~months ~~that~~ended weMarch ~~plan to sell~~31, 2016 and ~~(ii) our affiliate~~2015, ~~Alexander’s, Rego Park retail assets~~respectively. AsEstimated annual amortization of ~~September~~these ~~30,~~below-market ~~2015~~leases, ~~the~~net ~~fair value~~ of ~~our~~above-market ~~investment in UE~~leases, ~~based~~for oneach of ~~UE’s~~the ~~September~~five ~~30,~~succeeding ~~2015~~years ~~closing~~commencing ~~share~~January ~~price of $21.59~~1, ~~was $123,434,000,~~2017 oris ~~$98,033,000~~as ~~in excess of the carrying amount on our consolidated balance sheet.~~ follows:

Pennsylvania Real Estate Investment Trust (“PREIT”) (NYSE: PEI)

(Amounts in thousands)
2017	$	1,832
2018		1,832
2019		1,832
2020		1,832
2021		1,832

On March 31, 2015, we transferred the redeveloped Springfield Town Center, a 1,350,000 square foot mall located in Springfield, Fairfax County, Virginia, to PREIT Associates, L.P., which is the operating partnership of PREIT, in exchange for $485,313,000; comprised of $340,000,000 of cash and 6,250,000 PREIT operating partnership units (valued at $145,313,000 or $23.25 per PREIT unit) (See Note 8 – Dispositions). $19,000,000 of tenant improvements and allowances was credited to PREIT as a closing adjustment. As a result of this transaction, we own an 8.1% interest in PREIT. We account for our investment in PREIT under the equity method and record our share of PREIT’s net income or loss on a one-quarter lag basis. As of September 30, 2015, the fair value of our investment in PREIT, based on PREIT’s September 30, 2015 closing share price of $19.83, was $123,938,000, or $14,327,000 lower than the carrying amount on our consolidated balance sheet. As of September 30, 2015, the carrying amount of our investment in PREIT exceeds our share of the equity in the net assets of PREIT by approximately $65,681,000. The majority of this basis difference resulted from the excess of the fair value of the PREIT operating units received over our share of the book value of PREIT’s net assets. Substantially all of this basis difference was allocated, based on our estimates of the fair values of PREIT’s assets and liabilities, to real estate (land and buildings). We are amortizing the basis difference related to the buildings into earnings as additional depreciation expense over their estimated useful lives. This depreciation is not material to our share of equity in PREIT’s net loss. The basis difference related to the land will be recognized upon disposition of our investment.16

~~512~~VORNADO ~~West~~REALTY ~~22nd Street~~ L.P.

OnNOTES ~~June~~TO ~~24,~~CONSOLIDATED ~~2015,~~FINANCIAL weSTATEMENTS ~~entered into a joint venture, in which we own a 55% interest, to develop a 173,000 square foot Class~~-A office building, located along the western edge of the High Line at 512 West 22nd Street. The development cost of this project is approximately $235,000,000. The development is expected to commence during the fourth quarter of 2015 and be completed in 2017. We account for our investment in the joint venture under the equity method. CONTINUED

15(UNAUDITED)

~~VORNADO REALTY L~~9.P. Debt

~~NOTES~~On TOFebruary ~~CONSOLIDATED~~8, 2016, ~~FINANCIAL~~we ~~STATEMENTS~~completed a $700,000,000 refinancing of 770 Broadway, a 1,158,000 square foot Manhattan office building. The five-year ~~CONTINUED~~loan is interest only at LIBOR plus 1.75%, (2.19% at March 31, 2016) which was swapped for four and a half years to a fixed rate of 2.56%. The Company realized net proceeds of approximately $330,000,000. The property was previously encumbered by a 5.65%, $353,000,000 mortgage which was to mature in March 2016.

~~(UNAUDITED)~~On March 15, 2016, we notified the servicer of the $678,000,000 mortgage loan on the Skyline properties in Virginia that cash flow will be insufficient to service the debt and pay other property related costs and expenses and that we were not willing to fund additional cash shortfalls. Accordingly, at our request, the loan has been transferred to the special servicer. Consequently, based on our shortened estimated holding period for the underlying assets, we concluded that the excess of carrying amount over our estimate of fair value was not recoverable and recognized a $160,700,000 non-cash impairment loss in the first quarter of 2016.

~~7. Investments~~The infollowing ~~Partially~~is ~~Owned~~a ~~Entities~~summary –of our ~~continued~~debt:

Below are schedules summarizing our investments in, and (loss) income from, partially owned entities.

(Amounts in thousands)			Interest Rate at		Balance at
			March 31, 2016		March 31, 2016		December 31, 2015
Mortgages Payable:
	Fixed rate			4.04%	$	6,695,401	$	6,356,634
	Variable rate			2.25%		3,259,067		3,258,204
		Total		3.46%		9,954,468		9,614,838
	Deferred financing costs, net and other					(110,226)		(101,125)
		Total, net			$	9,844,242	$	9,513,713

Unsecured Debt:
	Senior unsecured notes			3.68%	$	850,000	$	850,000
	Deferred financing costs, net and other					(5,486)		(5,841)
		Senior unsecured notes, net				844,514		844,159

	Unsecured term loan			1.58%		375,000		187,500
	Deferred financing costs, net and other					(3,924)		(4,362)
		Unsecured term loan, net				371,076		183,138

	Unsecured revolving credit facilities			-		-		550,000

		Total, net			$	1,215,590	$	1,577,297

(Amounts in thousands)		Percentage
		Ownership at		Balance as of
		September 30, 2015		September 30, 2015		December 31, 2014
Investments:
	Partially owned office buildings (1)		Various	$	857,282	$	760,749
	PREIT Associates		8.1%		138,265		-
	Alexander’s		32.4%		131,395		131,616
	India real estate ventures		4.1%-36.5%		48,114		76,752
	UE		5.4%		25,401		-
	Toys		32.5%		-		-
	Other investments (2)		Various		259,721		271,372
				$	1,460,178	$	1,240,489
(1)	Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue, 512 West 22nd Street and others.
(2)	Includes interests in Independence Plaza, 85 Tenth Avenue, Fashion Center Mall, 50-70 West 93rd Street and others.

(Amounts in thousands)			Percentage		For the Three Months Ended				For the Nine Months Ended
			Ownership at		September 30,				September 30,
			September 30, 2015		2015		2014		2015			2014
Our Share of Net (Loss) Income:
	Alexander's:
		Equity in net income		32.4%	$	5,716	$	5,552	$	16,757		$	15,583
		Management, leasing and development fees				1,828		1,640		5,801			4,888
						7,544		7,192		22,558			20,471
	Partially owned office buildings (1)			Various		(2,039)		18		(14,573)			(1,387)
	Toys:
		Equity in net loss		32.5%		-		(20,357)		-			(4,691)
		Non-cash impairment loss				-		-		-			(75,196)
		Management fees				46		1,939		2,000			5,725
						46		(18,418)		2,000			(74,162)
	India real estate ventures			4.1%-36.5%		(1,704)		(262)		(18,380)	(2)		(2,440)
	Other investments (3)			Various		(4,172)		(14,564)		(314)			(21,158)
					$	(325)	$	(26,034)	$	(8,709)		$	(78,676)
(1)	Includes interests in 280 Park Avenue, 650 Madison Avenue, One Park Avenue, 666 Fifth Avenue (Office), 330 Madison Avenue, 512 West 22nd Street and others.
(2)	Includes $14,806 for our share of non-cash impairment losses.
(3)	Includes interests in UE, PREIT Associates, Independence Plaza, 85 Tenth Avenue, Fashion Center Mall, 50-70 West 93rd Street and others. In the third quarter of 2014, we recognized a $10,263 non-cash charge, comprised of a $5,959 impairment loss and a $4,304 loan loss reserve, on our equity and debt investments in Suffolk Downs.

VORNADO REALTY L.P.

16NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

~~VORNADO~~(UNAUDITED) ~~REALTY L.P.~~

~~NOTES~~10. Redeemable TOPartnership ~~CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~Units

~~(UNAUDITED)~~Redeemable partnership units on our consolidated balance sheets are comprised primarily of Class A units held by third parties and are recorded at the greater of their carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to “partners’ capital” on our consolidated balance sheets. Below is a table summarizing the activity of our redeemable partnership units.

8. Dispositions

(Amounts in thousands)
Balance at December 31, 2014	$	1,337,780
Net income		5,287
Other comprehensive loss		(1,288)
Distributions		(7,280)
Redemption of Class A units, at redemption value		(23,493)
Adjustments to carry redeemable Class A units at redemption value		(25,349)
Other, net		19,133
Balance at March 31, 2015	$	1,304,790

Balance at December 31, 2015	$	1,229,221
Net loss		(7,487)
Other comprehensive income		427
Distributions		(7,835)
Redemption of Class A units, at redemption value		(14,482)
Adjustments to carry redeemable Class A units at redemption value		(36,524)
Other, net		14,364
Balance at March 31, 2016	$	1,177,684

OnAs ~~September 9,~~of ~~2015~~March 31, we2016 ~~completed~~and ~~the~~December ~~sale of 1750 Pennsylvania Avenue~~31, NW2015, ~~a 278,000~~the ~~square~~aggregate ~~foot~~redemption ~~office~~value ~~building~~of inredeemable ~~Washington,~~Class DCA ~~for $182~~units,~~000,000,~~ ~~resulting~~which inare athose ~~net~~units ~~gain~~held ofby ~~approximately~~third parties, was $~~102~~1,~~000~~172,256,000 ~~which is included in “net gain on disposition of wholly owned~~ and ~~partially owned assets” on our consolidated statement of income. The tax gain of approximately~~ $~~137~~1,~~000~~223,793,000, ~~was deferred as part of a like-kind exchange~~respectively. ~~We are managing the property on behalf of the new owner.~~

~~Discontinued~~Redeemable partnership units exclude our Series ~~Operations~~G-1 through G-4 convertible preferred units and Series D-13 cumulative redeemable preferred units, as they are accounted for as liabilities in accordance with ASC 480, Distinguishing Liabilities and Equity, because of their possible settlement by issuing a variable number of Vornado common shares. Accordingly, the fair value of these units is included as a component of “other liabilities” on our consolidated balance sheets and aggregated $50,561,000 as of March 31, 2016 and December 31, 2015. Changes in the value from period to period, if any, are charged to “interest and debt expense” on our consolidated statements of income.

On January 15, 2015, we completed the spin-off of substantially all of our retail segment comprised of 79 strip shopping centers, three malls, a warehouse park and $225,000,000 of cash to UE (NYSE: UE) (see Note 1 – Organization). In addition, we completed the following retail property sales, substantially completing the exit of the retail strips and malls business.18

OnVORNADO ~~March~~REALTY ~~13, 2015, we sold our Geary Street, CA lease for $34,189,000, which resulted in a net gain of $21,376,000~~L.P.

OnNOTES ~~March~~TO ~~31,~~CONSOLIDATED ~~2015,~~FINANCIAL weSTATEMENTS transferred the redeveloped Springfield Town Center, a 1,350,000 square foot mall located in Springfield, Fairfax County, Virginia, to PREIT (see Note 7 – Investments in Partially Owned Entities). The financial statement gain was $7,823,000, of which $7,192,000 was recognized in the first quarter of 2015 and the remaining $631,000 was deferred based on our ownership interest in PREIT. On March 31, 2018, we will be entitled to additional consideration of 50% of the increase in the value of Springfield Town Center, if any, over $465,000,000, calculated utilizing a 5.5% capitalization rate. In the first quarter of 2014, we recorded a non-~~cash~~ ~~impairment loss of $20,000,000 on Springfield Town Center which is included in “income from discontinued operations” on our consolidated statements of income.~~ CONTINUED

On(UNAUDITED) August 6, 2015, we sold our 50% interest in the Monmouth Mall in Eatontown, NJ to our joint venture partner for $38,000,000, valuing the property at approximately $229,000,000, which resulted in a net gain of $33,153,000.

We11. Accumulated ~~also~~Other ~~sold five~~Comprehensive ~~residual~~Income ~~retail properties, in separate transactions, for an aggregate of $10,731,000, which resulted in net gains of $3,675,000.~~(“AOCI”)

17The following tables set forth the changes in accumulated other comprehensive income by component.

VORNADO REALTY L.P.

(Amounts in thousands)				Securities		Pro rata share of		Interest
				available-		nonconsolidated		rate
		Total		for-sale		subsidiaries' OCI		swaps		Other
For the Three Months Ended March 31, 2016
Balance as of December 31, 2015		$	46,921	$	78,448	$	(9,319)	$	(19,368)	$	(2,840)
	OCI before reclassifications		6,478		11,094		6		(4,195)		(427)
	Amounts reclassified from AOCI		-		-		-		-		-
Net current period OCI			6,478		11,094		6		(4,195)		(427)
Balance as of March 31, 2016		$	53,399	$	89,542	$	(9,313)	$	(23,563)	$	(3,267)


For the Three Months Ended March 31, 2015
Balance as of December 31, 2014		$	93,267	$	133,774	$	(8,992)	$	(25,803)	$	(5,712)
	OCI before reclassifications		(20,658)		(21,332)		157		(776)		1,293
	Amounts reclassified from AOCI		-		-		-		-		-
Net current period OCI			(20,658)		(21,332)		157		(776)		1,293
Balance as of March 31, 2015		$	72,609	$	112,442	$	(8,835)	$	(26,579)	$	(4,419)

~~NOTES~~12. Variable TOInterest ~~CONSOLIDATED~~Entities ~~FINANCIAL STATEMENTS - CONTINUED~~(“VIEs”)

At March 31, 2016 and December 31, 2015, we have several unconsolidated VIEs. We do not consolidate these entities because we are not the primary beneficiary and the nature of our involvement in the activities of these entities does not give us power over decisions that significantly affect these entities’ economic performance. We account for our investment in these entities under the equity method (~~UNAUDITED~~see Note 6 – Investments in Partially Owned Entities). As of March 31, 2016 and December 31, 2015, the net carrying amounts of our investment in these entities were $361,921,000 and $379,939,000, respectively, and our maximum exposure to loss in these entities, is limited to our investments.

8We adopted ASU 2015-02 on January 1, 2016 which resulted in the identification of several VIEs at March 31, 2016. ~~Dispositions~~ Prior –to ~~continued~~the adoption of ASU 2015-02, these entities were consolidated under the voting interest model. Our most significant consolidated VIEs are our real estate fund investments and certain properties that have non-controlling interests. These entities are VIEs because the non-controlling interests do not have substantive kick-out or participating rights. We consolidate these entities because we control all significant business activities. As of March 31, 2016, the total assets and liabilities of these consolidated VIEs are $3,966,853,000 and $2,458,554,000 respectively.

We have reclassified the revenues and expenses of the UE portfolio and other retail properties discussed above to “income from discontinued operations” and the related assets and liabilities to “assets related to discontinued operations” and “liabilities related to discontinued operations” for all of the periods presented in the accompanying consolidated financial statements. The net gains resulting from the sale of these properties are included in “income from discontinued operations” on our consolidated statements of income. The tables below set forth the assets and liabilities related to discontinued operations at September 30, 2015 and December 31, 2014 and their combined results of operations and cash flows for the nine months ended September 30, 2015 and 2014.19

(Amounts in thousands)					Balance as of
					September 30, 2015		December 31, 2014
Assets related to discontinued operations:
Real estate, net					$	27,560	$	2,028,677
Other assets						7,582		215,804
					$	35,142	$	2,244,481
Liabilities related to discontinued operations:
Mortgages payable					$	-	$	1,288,535
Other liabilities (primarily deferred revenue in 2014)						11,520		222,827
					$	11,520	$	1,511,362
(Amounts in thousands)	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
Income from discontinued operations:
Total revenues	$	2,589	$	93,440	$	24,868	$	297,039
Total expenses		1,279		62,715		16,672		204,619
		1,310		30,725		8,196		92,420
Net gain on sale of our interest in Monmouth Mall		33,153		-		33,153		-
Net gains on sale of real estate		-		57,796		10,867		57,796
Transaction related costs (primarily UE spin off)		-		(5,828)		(22,972)		(9,343)
Net gain on sale of lease position in Geary Street, CA		-		-		21,376		-
Impairment losses		-		-		(256)		(20,842)
Pretax income from discontinued operations		34,463		82,693		50,364		120,031
Income tax expense		-		(525)		(86)		(1,575)
Income from discontinued operations	$	34,463	$	82,168	$	50,278	$	118,456
Cash flows related to discontinued operations:
Cash flows from operating activities					$	(34,490)	$	153,815
Cash flows from investing activities						348,697		(122,247)

VORNADO REALTY L.P.

18NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

~~VORNADO~~(UNAUDITED) ~~REALTY L.P.~~

~~NOTES~~13. Fair TOValue ~~CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~Measurements

ASC 820 defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (~~UNAUDITED~~the exit price). ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 – quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 – observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 – unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as consider counterparty credit risk in our assessment of fair value. Considerable judgment is necessary to interpret Level 2 and 3 inputs in determining the fair value of our financial and non-financial assets and liabilities. Accordingly, our fair value estimates, which are made at the end of each reporting period, may be different than the amounts that may ultimately be realized upon sale or disposition of these assets.

~~9. Identified~~Financial ~~Intangible~~ Assets and Liabilities Measured at Fair Value on a Recurring Basis

~~The~~Financial ~~following~~assets ~~summarizes~~and liabilities that are measured at fair value on our ~~identified~~consolidated ~~intangible~~balance sheets consist of (i) ~~assets~~marketable securities, (~~primarily~~ii) ~~acquired~~real estate fund investments, (iii) the assets in our deferred compensation plan (for which there is a corresponding liability on our consolidated balance sheet), (iv) mandatorily redeemable instruments (Series G-~~place~~1 through G-4 convertible preferred units and ~~above~~Series D-~~market~~13 ~~leases~~cumulative redeemable preferred units), and ~~liabilities~~ (~~primarily~~v) ~~acquired~~interest rate swaps. The tables below~~-market~~ aggregate ~~leases)~~the fair values of these financial assets and liabilities by their levels in the fair value hierarchy as of ~~September~~March 3031, ~~2015~~2016 and December 31, ~~2014~~2015, respectively.

(Amounts in thousands)	~~(Amounts in thousands)~~	~~Balance as of~~	As of March 31, 2016
		September 30, 2015			December 31, 2014
			Total			Level 1		Level 2		Level 3
	Identified intangible assets:
Marketable securities			$	162,091		$	162,091	$	-	$	-
	Gross amount	$	432,357		$	424,976
Real estate fund investments (75% of which is attributable to
	Accumulated amortization		(190,543)			(199,821)
	noncontrolling interests)			566,696			-		-		566,696
	Net	$	241,814		$	225,155
Deferred compensation plan assets (included in other assets)				116,824			59,640		-		57,184
	Identified intangible liabilities (included in deferred revenue):
Interest rate swap (included in other assets)				5,039			-		5,039		-
	Gross amount	$	666,370		$	657,976
	Total assets		$	850,650		$	221,731	$	5,039	$	623,880
	Accumulated amortization		(316,908)			(329,775)
Mandatorily redeemable instruments (included in other liabilities)			$	50,561		$	50,561	$	-	$	-
	Net	$	349,462		$	328,201
Interest rate swaps (included in other liabilities)				28,914			-		28,914		-
	Total liabilities		$	79,475		$	50,561	$	28,914	$	-
(Amounts in thousands)			As of December 31, 2015
			Total			Level 1		Level 2		Level 3
Marketable securities			$	150,997		$	150,997	$	-	$	-
Real estate fund investments (75% of which is attributable to
	noncontrolling interests)			574,761			-		-		574,761
Deferred compensation plan assets (included in other assets)				117,475			58,289		-		59,186
	Total assets		$	843,233		$	209,286	$	-	$	633,947
Mandatorily redeemable instruments (included in other liabilities)			$	50,561		$	50,561	$	-	$	-
Interest rate swaps (included in other liabilities)				19,600			-		19,600		-
	Total liabilities		$	70,161		$	50,561	$	19,600	$	-

Amortization of acquired below-market leases, net of acquired above-market leases, resulted in an increase to rental income of $19,786,000 and $8,099,000 for the three months ended September 30, 2015 and 2014, respectively, and $45,614,000 and $26,333,000 for the nine months ended September 30, 2015 and 2014, respectively. Estimated annual amortization of acquired below-market leases, net of acquired above-market leases, for each of the five succeeding years commencing January 1, 2016 is as follows:20

(Amounts in thousands)
2016	$	51,780
2017		44,079
2018		42,733
2019		30,775
2020		23,143

VORNADO REALTY L.P.

~~Amortization~~NOTES ofTO ~~all~~CONSOLIDATED ~~other~~FINANCIAL ~~identified~~STATEMENTS intangible assets (a component of depreciation and amortization expense) was $9,658,000 and $5,866,000 for the three months ended September 30, 2015 and 2014, respectively, and $24,402,000 and $21,697,000 for the nine months ended September 30, 2015 and 2014, respectively. Estimated annual amortization of all other identified intangible assets including acquired in-~~place~~ ~~leases, customer relationships, and third party contracts for each of the five succeeding years commencing January 1, 2016 is as follows:~~CONTINUED

(Amounts in thousands)
2016	$	30,165
2017		24,745
2018		20,373
2019		15,685
2020		12,245

(UNAUDITED)

~~We are a tenant under ground leases for certain properties~~13. Amortization of these acquired below-market leases, net of above-market leases resulted in an increase to rent expense of $458,000 for the three months ended September 30, 2015 and 2014 and $1,374,000 for the nine months ended September 30, 2015 and 2014. ~~Estimated~~Fair ~~annual~~Value ~~amortization~~Measurements of– ~~these below-market leases, net of above-market leases for each of the five succeeding years commencing January 1, 2016 is as follows:~~continued

(Amounts in thousands)
2016	$	1,832
2017		1,832
2018		1,832
2019		1,832
2020		1,832

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - continued

19Real Estate Fund Investments

~~VORNADO~~At ~~REALTY~~March L31, 2016, we had six real estate fund investments with an aggregate fair value of $566,696,000, or $200,549,000 in excess of cost.P These investments are classified as Level 3. We use a discounted cash flow valuation technique to estimate the fair value of each of these investments, which is updated quarterly by personnel responsible for the management of each investment and reviewed by senior management at each reporting period. The discounted cash flow valuation technique requires us to estimate cash flows for each investment over the anticipated holding period, which currently ranges from 1.3 to 4.8 years. Cash flows are derived from property rental revenue (base rents plus reimbursements) less operating expenses, real estate taxes and capital and other costs, plus projected sales proceeds in the year of exit. Property rental revenue is based on leases currently in place and our estimates for future leasing activity, which are based on current market rents for similar space plus a projected growth factor. Similarly, estimated operating expenses and real estate taxes are based on amounts incurred in the current period plus a projected growth factor for future periods. Anticipated sales proceeds at the end of an investment’s expected holding period are determined based on the net cash flow of the investment in the year of exit, divided by a terminal capitalization rate, less estimated selling costs.

~~NOTES~~The TOfair ~~CONSOLIDATED~~value of ~~FINANCIAL~~each ~~STATEMENTS~~property -is ~~CONTINUED~~calculated by discounting the future cash flows (including the projected sales proceeds), using an appropriate discount rate and then reduced by the property’s outstanding debt, if any, to determine the fair value of the equity in each investment. Significant unobservable quantitative inputs used in determining the fair value of each investment include capitalization rates and discount rates. These rates are based on the location, type and nature of each property, and current and anticipated market conditions, industry publications and from the experience of our Acquisitions and Capital Markets departments. Significant unobservable quantitative inputs in the table below were utilized in determining the fair value of these real estate fund investments at March 31, 2016 and December 31, 2015.

(UNAUDITED)

				Weighted Average
		Range		(based on fair value of investments)
Unobservable Quantitative Input		March 31, 2016	December 31, 2015	March 31, 2016	December 31, 2015
	Discount rates	12.0% to 14.9%	12.0% to 14.9%	13.5%	13.6%
	Terminal capitalization rates	4.8% to 6.1%	4.8% to 6.1%	5.4%	5.5%

10The above inputs are subject to change based on changes in economic and market conditions and/or changes in use or timing of exit. ~~Debt~~ Changes in discount rates and terminal capitalization rates result in increases or decreases in the fair values of these investments. The discount rates encompass, among other things, uncertainties in the valuation models with respect to terminal capitalization rates and the amount and timing of cash flows. Therefore, a change in the fair value of these investments resulting from a change in the terminal capitalization rate, may be partially offset by a change in the discount rate. It is not possible for us to predict the effect of future economic or market conditions on our estimated fair values.

OnThe ~~January~~table 1,below ~~2015,~~summarizes ~~we redeemed~~the ~~all~~changes ofin the fair ~~$500,000,000~~value ~~principal amount~~ of ~~our~~real ~~outstanding~~estate ~~4.25% senior~~fund ~~unsecured~~investments ~~notes,~~that ~~which~~are ~~were~~classified ~~scheduled~~as toLevel ~~mature on April 1~~3, ~~2015, at a~~for ~~redemption price of 100% of~~ the ~~principal~~three ~~amount~~months ~~plus~~ended ~~accrued~~March ~~interest through December~~ 31, ~~2014.~~2016 and 2015.

On April 1, 2015, we completed a $308,000,000 refinancing of RiverHouse Apartments, a three building, 1,670 unit rental complex located in Arlington, VA. The loan is interest-only at LIBOR plus 1.28% and matures in 2025. We realized net proceeds of approximately $43,000,000. The property was previously encumbered by a 5.43%, $195,000,000 mortgage maturing in April 2015 and a $64,000,000 mortgage at LIBOR plus 1.53% maturing in 2018.

(Amounts in thousands)	For the Three Months Ended March 31,
	2016		2015
Beginning balance	$	574,761	$	513,973
Purchases		-		95,000
Dispositions / distributions		(14,676)		(72,186)
Net unrealized gains		6,189		16,213
Net realized gains		422		1,426
Ending balance	$	566,696	$	554,426

On June 2, 2015, we completed a $205,000,000 financing in connection with the acquisition of 150 West 34th Street (see Note 4 – Acquisitions). The loan bears interest at LIBOR plus 2.25% and matures in 2018 with two one-year extension options. 21

OnVORNADO ~~July~~REALTY ~~28, 2015, we completed a $580,000,000 refinancing of 100 West 33rd Street, a 1~~L.~~1 million square foot property comprised of 851,000 square feet of office space and the 256,000 square foot Manhattan Mall~~P. ~~The loan is interest only at LIBOR plus 1.65% and matures in July 2020. We realized net proceeds of approximately $242,000,000.~~

OnNOTES ~~September~~TO ~~22,~~CONSOLIDATED ~~2015,~~FINANCIAL weSTATEMENTS ~~upsized~~- the loan on our 220 Central Park South development by $350,000,000 to $950,000,000. The interest rate on the loan is LIBOR plus 2.00% and the final maturity date is 2020. In connection with the upsizing, the standby commitment for a $500,000,000 mezzanine loan for this development has been terminated by payment of a $15,000,000 contractual termination fee, which was capitalized as a component of “development costs and construction in progress” on our consolidated balance sheet as of September 30, 2015. CONTINUED

~~The~~(UNAUDITED) ~~following is a summary of our debt:~~

(Amounts in thousands)		Interest Rate at		Balance at
		September 30, 2015		September 30, 2015		December 31, 2014
Mortgages Payable:
	Fixed rate		4.43%	$	6,341,271	$	6,499,396
	Variable rate		2.01%		2,818,142		1,763,769
			3.69%	$	9,159,413	$	8,263,165
Unsecured Debt:
	Senior unsecured notes		3.68%	$	847,594	$	1,347,159
	Revolving credit facility debt		-		-		-
			3.68%	$	847,594	$	1,347,159

13. Fair Value Measurements – continued

20Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - continued

~~VORNADO~~Deferred Compensation ~~REALTY~~Plan ~~L.P.~~Assets

~~NOTES~~Deferred compensation TOplan ~~CONSOLIDATED~~assets ~~FINANCIAL~~that ~~STATEMENTS~~are classified as Level 3 consist of investments in limited partnerships and investment funds, which are managed by third parties. We receive quarterly financial reports from a third-party administrator, ~~CONTINUED~~which are compiled from the quarterly reports provided to them from each limited partnership and investment fund. The quarterly reports provide net asset values on a fair value basis which are audited by independent public accounting firms on an annual basis. The third-party administrator does not adjust these values in determining our share of the net assets and we do not adjust these values when reported in our consolidated financial statements.

~~(UNAUDITED)~~The table below summarizes the changes in the fair value of deferred compensation plan assets that are classified as Level 3, for the three months ended March 31, 2016 and 2015.

11. Redeemable Partnership Units

(Amounts in thousands)	For the Three Months Ended March 31,
	2016		2015
Beginning balance	$	59,186	$	63,315
Purchases		1,166		624
Sales		(1,372)		(438)
Realized and unrealized (loss) gain		(1,907)		1,335
Other, net		111		-
Ending balance	$	57,184	$	64,836

~~Redeemable~~Fair ~~partnership~~Value ~~units~~Measurements on ~~our~~a ~~consolidated~~Nonrecurring ~~balance~~Basis sheets are comprised primarily of Class A units that are held by third parties and are recorded at the greater of their carrying amount or redemption value at the end of each reporting period. Changes in the value from period to period are charged to “partners’ capital” on our consolidated balance sheets. Below is a table summarizing the activity of redeemable partnership units.

(Amounts in thousands)
Balance at December 31, 2013	$	1,003,620
Net income		16,552
Other comprehensive loss		(109)
Distributions		(25,166)
Redemption of Class A units, at redemption value		(22,668)
Adjustments to carry redeemable Class A units at redemption value		144,231
Other, net		23,592
Balance at September 30, 2014	$	1,140,052
Balance at December 31, 2014	$	1,337,780
Net income		28,189
Other comprehensive loss		(3,082)
Distributions		(22,502)
Redemption of Class A units, at redemption value		(46,693)
Adjustments to carry redeemable Class A units at redemption value		(295,713)
Issuance of Class A units		80,000
Issuance of Series D-17 Preferred Units		4,428
Other, net		31,478
Balance at September 30, 2015	$	1,113,885

Assets measured at fair value on a nonrecurring basis on our consolidated balance sheets consist primarily of real estate assets required to be measured for impairment at March 31, 2016. There are no assets or liabilities measured at fair value on a nonrecurring basis at December 31, 2015. The fair values of real estate assets required to be measured for impairment were determined using widely accepted valuation techniques, including (i) discounted cash flow analysis, which considers, among other things, leasing assumptions, growth rates, discount rates and terminal capitalization rates, (ii) income capitalization approach, which considers prevailing market capitalization rates, and (iii) comparable sales activity.

As of September 30, 2015 and December 31, 2014, the aggregate redemption value of redeemable Class A units, which are those units held by third parties, was $1,108,457,000 and $1,336,780,000, respectively.

(Amounts in thousands)	As of March 31, 2016
	Total		Level 1		Level 2		Level 3
Real estate assets (Skyline properties)	$	192,003	$	-	$	-	$	192,003

Redeemable partnership units exclude our Series G-1 through G-4 convertible preferred units and Series D-13 cumulative redeemable preferred units, as they are accounted for as liabilities in accordance with ASC 480, Distinguishing Liabilities and Equity, because of their possible settlement by issuing a variable number of Vornado common shares. Accordingly, the fair value of these units is included as a component of “other liabilities” on our consolidated balance sheets and aggregated $53,135,000 as of September 30, 2015 and $55,097,000 as of December 31, 2014. Changes in the value from period to period, if any, are charged to “interest and debt expense” on our consolidated statements of income. 22

21VORNADO REALTY L.P.

~~VORNADO~~NOTES ~~REALTY~~TO ~~L.P.~~CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

~~NOTES~~(UNAUDITED) ~~TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~

~~(UNAUDITED)~~13. Fair Value Measurements – continued

~~12. Accumulated~~Financial ~~Other~~Assets ~~Comprehensive~~and Liabilities ~~Income~~not ~~(“AOCI”)~~Measured at Fair Value

~~The~~Financial ~~following~~assets and liabilities that are not ~~tables~~measured ~~set~~at ~~forth~~fair ~~the~~value ~~changes~~on inour ~~accumulated~~consolidated ~~other~~balance ~~comprehensive~~sheets ~~income~~include cash equivalents (~~loss~~primarily money market funds, which invest in obligations of the United States government), and our secured and unsecured debt. Estimates of the fair value of these instruments are determined by ~~component~~the standard practice of modeling the contractual cash flows required under the instrument and discounting them back to their present value at the appropriate current risk adjusted interest rate, which is provided by a third-party specialist. For floating rate debt, we use forward rates derived from observable market yield curves to project the expected cash flows we would be required to make under the instrument. The fair value of cash equivalents and borrowings under our unsecured revolving credit facilities and unsecured term loan are classified as Level 1. The fair value of our secured and unsecured debt is classified as Level 2. The table below summarizes the carrying amounts and fair value of these financial instruments as of March 31, 2016 and December 31, 2015.

(Amounts in thousands)		As of March 31, 2016					~~Securities~~	As of December 31, 2015		~~Pro rata share of~~			~~Interest~~
							available-			nonconsolidated			rate
		Carrying			Fair			Carrying			Fair
				Total			for-sale			subsidiaries' OCI			swap		Other
		Amount			Value			Amount			Value
For the Three Months Ended September 30, 2015
Cash equivalents		$	1,445,442		$	1,445,000		$	1,295,980		$	1,296,000
Balance as of June 30, 2015				$	50,613		$	87,442		$	(10,026)		$	(23,730)	$	(3,073)
Debt:
	OCI before reclassifications				(7,020)			(7,064)			(114)			(290)		448
	Mortgages payable	$	9,954,468		$	9,705,000		$	9,614,838		$	9,306,000
	Amounts reclassified from AOCI				-			-			-			-		-
	Senior unsecured notes		850,000			887,000			850,000			868,000
Net current period OCI					(7,020)			(7,064)			(114)			(290)		448
	Unsecured term loan		375,000			375,000			187,500			187,500
Balance as of September 30, 2015				$	43,593		$	80,378		$	(10,140)		$	(24,020)	$	(2,625)
	Unsecured revolving credit facilities		-			-			550,000			550,000
For the Three Months Ended September 30, 2014
	Total	$	11,179,468	(1)	$	10,967,000		$	11,202,338		$	10,911,500
Balance as of June 30, 2014				$	92,221		$	134,312		$	(5,624)		$	(30,817)	$	(5,650)
(1)	Excludes $119,636 of deferred financing costs, net and other.
	OCI before reclassifications				(22,641)			(22,764)			(6,028)			4,781		1,370
	Amounts reclassified from AOCI				-			-			-			-		-
Net current period OCI					(22,641)			(22,764)			(6,028)			4,781		1,370
Balance as of September 30, 2014				$	69,580		$	111,548		$	(11,652)		$	(26,036)	$	(4,280)
For the Nine Months Ended September 30, 2015
Balance as of December 31, 2014				$	93,267		$	133,774		$	(8,992)		$	(25,803)	$	(5,712)
	OCI before reclassifications				(49,674)			(53,396)			(1,148)			1,783		3,087
	Amounts reclassified from AOCI				-			-			-			-		-
Net current period OCI					(49,674)			(53,396)			(1,148)			1,783		3,087
Balance as of September 30, 2015				$	43,593		$	80,378		$	(10,140)		$	(24,020)	$	(2,625)
For the Nine Months Ended September 30, 2014
Balance as of December 31, 2013				$	71,537		$	119,309		$	(11,501)		$	(31,882)	$	(4,389)
	OCI before reclassifications				(1,957)			(7,761)			(151)			5,846		109
	Amounts reclassified from AOCI				-			-			-			-		-
Net current period OCI					(1,957)			(7,761)			(151)			5,846		109
Balance as of September 30, 2014				$	69,580		$	111,548		$	(11,652)		$	(26,036)	$	(4,280)

2214. Incentive Compensation

~~VORNADO~~Vornado’s ~~REALTY~~2010 LOmnibus Share Plan (the “Plan”) provides for grants of incentive and non-qualified Vornado stock options, restricted stock, restricted partnership units and Out-Performance Plan awards to certain of Vornado’s employees and officers.P We account for all equity-based compensation in accordance with ASC 718, Compensation – Stock Compensation. Equity-based compensation expense was $14,571,000 and $20,142,000 for the three months ended March 31, 2016 and 2015, respectively.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~23

~~(UNAUDITED)~~VORNADO REALTY L.P.

~~13. Variable~~NOTES ~~Interest~~TO ~~Entities~~CONSOLIDATED ~~(“VIEs”)~~FINANCIAL STATEMENTS - CONTINUED

At(UNAUDITED) September 30, 2015 and December 31, 2014, we have four unconsolidated VIEs. We do not consolidate these entities because we are not the primary beneficiary and the nature of our involvement in the activities of these entities does not give us power over decisions that significantly affect these entities’ economic performance. We account for our investment in these entities under the equity method. As of September 30, 2015 and December 31, 2014, the net carrying amounts of our investment in these entities were $302,649,000 and $286,783,000, respectively, and our maximum exposure to loss in these entities is limited to our investment. We did not have any consolidated VIEs as of September 30, 2015 and December 31, 2014.

1415. ~~Fair~~ Fee ~~Value~~and ~~Measurements~~Other Income

~~ASC 820 defines fair value and establishes a framework for measuring fair value.~~ The ~~objective of fair value is to~~ ~~determine~~following ~~the~~table ~~price~~sets ~~that~~forth ~~would be received upon~~ the ~~sale~~details of anfee asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). ASC 820 establishes a fair value hierarchy that prioritizes observable and ~~unobservable~~other ~~inputs used to measure fair value into three levels~~income: Level 1 – quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 – observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 – unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as consider counterparty credit risk in our assessment of fair value. Considerable judgment is necessary to interpret Level 2 and 3 inputs in determining the fair value of our financial and non-financial assets and liabilities. Accordingly, our fair value estimates, which are made at the end of each reporting period, may be different than the amounts that may ultimately be realized upon sale or disposition of these assets.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

(Amounts in thousands)	For the Three Months Ended March 31,
	2016		2015
BMS cleaning fees	$	18,146	$	22,633
Management and leasing fees		4,799		4,192
Lease termination fees		2,405		3,747
Other income		8,620		9,035
	$	33,970	$	39,607

~~Financial~~Management ~~assets~~ and ~~liabilities that are~~ ~~measured~~leasing atfees ~~fair~~include ~~value~~management onfees ~~our~~from ~~consolidated~~Interstate ~~balance~~Properties, ~~sheets~~a ~~consist~~related party, of ~~(i) marketable securities~~$134,000 ~~(ii)~~and ~~real estate fund investments~~$139,000 ~~(iii)~~for the ~~assets~~three ~~in our~~months ~~deferred~~ended ~~compensation~~March ~~plan (for which there is a corresponding liability on our consolidated balance sheet)~~31, ~~(iv)~~2016 ~~mandatorily redeemable instruments (Series G-1 through G-4 convertible preferred units~~ and ~~Series D-13 cumulative~~ ~~redeemable preferred units)~~2015, ~~and (v) an interest rate swap~~respectively. The ~~tables~~above ~~below aggregate~~table ~~the~~excludes ~~fair~~fee ~~values~~income offrom ~~these~~partially ~~financial~~owned ~~assets~~entities, which ~~and~~is ~~liabilities~~included ~~by their levels~~ in ~~the~~“loss ~~fair~~from ~~value~~partially ~~hierarchy~~owned atentities” ~~September~~(see ~~30,~~Note ~~2015~~6 ~~and~~– ~~December~~Investments in ~~31,~~Partially ~~2014, respectively~~Owned Entities).

(Amounts in thousands)		As of September 30, 2015
		Total		Level 1		Level 2		Level 3
Marketable securities		$	152,927	$	152,927	$	-	$	-
Real estate fund investments (75% of which is attributable to
	noncontrolling interests)		555,414		-		-		555,414
Deferred compensation plan assets (included in other assets)			117,037		48,829		-		68,208
	Total assets	$	825,378	$	201,756	$	-	$	623,622
Mandatorily redeemable instruments (included in other liabilities)		$	53,135	$	53,135	$	-	$	-
Interest rate swap (included in other liabilities)			24,014		-		24,014		-
	Total liabilities	$	77,149	$	53,135	$	24,014	$	-
(Amounts in thousands)		As of December 31, 2014
		Total		Level 1		Level 2		Level 3
Marketable securities		$	206,323	$	206,323	$	-	$	-
Real estate fund investments (75% of which is attributable to
	noncontrolling interests)		513,973		-		-		513,973
Deferred compensation plan assets (included in other assets)			117,284		53,969		-		63,315
	Total assets	$	837,580	$	260,292	$	-	$	577,288
Mandatorily redeemable instruments (included in other liabilities)		$	55,097	$	55,097	$	-	$	-
Interest rate swap (included in other liabilities)			25,797		-		25,797		-
	Total liabilities	$	80,894	$	55,097	$	25,797	$	-

16. Interest and Other Investment Income, Net

23The following table sets forth the details of interest and other investment income, net:

VORNADO REALTY L.P.

(Amounts in thousands)		For the Three Months Ended March 31,
		2016		2015
Dividends on marketable securities		$	3,215	$	3,203
Mark-to-market (loss) income of investments in our deferred compensation plan⁽¹⁾			(1,938)		2,859
Interest on loans receivable			748		2,824
Other, net			1,493		1,906
		$	3,518	$	10,792


(1)	This (loss) income is entirely offset by the income (expense) resulting from the mark-to-market of the deferred compensation plan liability, which is included in "general and administrative" expense.

~~NOTES~~17. Interest TOand ~~CONSOLIDATED~~Debt ~~FINANCIAL STATEMENTS - CONTINUED~~Expense

~~(UNAUDITED)~~The following table sets forth the details of interest and debt expense:

14. Fair Value Measurements – continued

(Amounts in thousands)	For the Three Months Ended March 31,
	2016		2015
Interest expense	$	100,295	$	95,328
Amortization of deferred financing costs		9,265		7,456
Capitalized interest and debt expense		(9,071)		(11,110)
	$	100,489	$	91,674

~~Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - continued~~24

~~Real~~VORNADO ~~Estate~~REALTY ~~Fund Investments~~L.P.

AtNOTES ~~September~~TO ~~30, 2015,~~CONSOLIDATED weFINANCIAL ~~had~~STATEMENTS ~~six~~- real estate fund investments with an aggregate fair value of $555,414,000, or $190,620,000 in excess of cost. These investments are classified as Level 3. We use a discounted cash flow valuation technique to estimate the fair value of each of these investments, which is updated quarterly by personnel responsible for the management of each investment and reviewed by senior management at each reporting period. The discounted cash flow valuation technique requires us to estimate cash flows for each investment over the anticipated holding period, which currently ranges from 0.8 to 5.3 years. Cash flows are derived from property rental revenue (base rents plus reimbursements) less operating expenses, real estate taxes and capital and other costs, plus projected sales proceeds in the year of exit. Property rental revenue is based on leases currently in place and our estimates for future leasing activity, which are based on current market rents for similar space plus a projected growth factor. Similarly, estimated operating expenses and real estate taxes are based on amounts incurred in the current period plus a projected growth factor for future periods. Anticipated sales proceeds at the end of an investment’s expected holding period are determined based on the net cash flow of the investment in the year of exit, divided by a terminal capitalization rate, less estimated selling costs. CONTINUED

~~The fair value of each property is calculated by discounting the future cash flows~~ (~~including the projected sales proceeds~~UNAUDITED), using an appropriate discount rate and then reduced by the property’s outstanding debt, if any, to determine the fair value of the equity in each investment. Significant unobservable quantitative inputs used in determining the fair value of each investment include capitalization rates and discount rates. These rates are based on the location, type and nature of each property, and current and anticipated market conditions, which are derived from original underwriting assumptions, industry publications and from the experience of our Acquisitions and Capital Markets departments. Significant unobservable quantitative inputs in the table below were utilized in determining the fair value of these real estate fund investments at September 30, 2015 and December 31, 2014.

				Weighted Average
		Range		(based on fair value of investments)
Unobservable Quantitative Input		September 30, 2015	December 31, 2014	September 30, 2015	December 31, 2014
	Discount rates	12.0% to 14.5%	12.0% to 17.5%	13.2%	13.7%
	Terminal capitalization rates	4.8% to 6.5%	4.7% to 6.5%	5.5%	5.3%

18. (Loss) Income Per Class A Unit

The ~~above~~following ~~inputs~~table ~~are~~provides ~~subject~~a toreconciliation ~~change based on~~of ~~changes~~both innet ~~economic~~(loss) ~~and~~income ~~market conditions~~ and~~/or~~ ~~changes~~the innumber ~~use or timing~~ of ~~exit. Changes~~ inClass ~~discount~~A ~~rates~~units ~~and~~used ~~terminal capitalization rates result~~ in ~~increases~~ ~~or decreases in~~ the ~~fair~~computation of ~~values~~(i) ofbasic ~~these~~(loss) ~~investments. The~~income ~~discount rates~~per ~~encompass,~~Class ~~among~~A ~~other~~unit ~~things,~~- ~~uncertainties~~which inincludes the ~~valuation~~weighted average ~~models~~number ~~with respect~~of toClass ~~terminal~~A ~~capitalization~~units ~~rates~~outstanding ~~and~~without ~~the~~regard ~~amount~~to ~~and~~dilutive potential ~~timing~~Class ofA ~~cash flows. Therefore~~units, aand ~~change~~(ii) indiluted ~~the~~(loss) ~~fair~~income ~~value~~per ofClass ~~these~~A ~~investments~~unit ~~resulting~~- ~~from~~which aincludes ~~change in~~ the ~~terminal~~weighted ~~capitalization~~average ~~rate,~~Class ~~may~~A beunits ~~partially~~and ~~offset~~dilutive ~~by a~~unit ~~change in the discount rate~~equivalents. It isDilutive ~~not~~unit ~~possible~~equivalents ~~for~~may usinclude toour ~~predict~~Series ~~the~~A ~~effect~~convertible ofpreferred ~~future~~units, ~~economic~~Vornado orstock ~~market~~options ~~conditions~~and onrestricted ~~our~~unit ~~estimated fair values~~awards.

The table below summarizes the changes in the fair value of real estate fund investments that are classified as Level 3, for the three and nine months ended September 30, 2015 and 2014.

(Amounts in thousands, except per unit amounts)			For the Three Months Ended March 31,
			2016		2015
Numerator:
	(Loss) income from continuing operations, net of income attributable
		to noncontrolling interests	$	(102,002)	$	93,185
	Income from discontinued operations			716		16,179
	Net (loss) income attributable to Vornado Realty L.P.			(101,286)		109,364
	Preferred unit distributions			(20,412)		(19,496)
	Net (loss) income attributable to Class A unitholders			(121,698)		89,868
	Earnings allocated to unvested participating securities			(772)		(749)
	Numerator for basic and diluted (loss) income per Class A unit		$	(122,470)	$	89,119

Denominator:
	Denominator for basic (loss) income per Class A unit – weighted average units			200,072		198,675
	Effect of dilutive securities⁽¹⁾:
		Vornado stock options and restricted unit awards		-		2,074
	Denominator for diluted (loss) income per Class A unit – weighted average
		units and assumed conversions		200,072		200,749

(LOSS) INCOME PER CLASS A UNIT – BASIC:
	(Loss) income from continuing operations, net		$	(0.61)	$	0.37
	Income from discontinued operations, net			-		0.08
	Net (loss) income per Class A unit		$	(0.61)	$	0.45

(LOSS) INCOME PER CLASS A UNIT – DILUTED:
	(Loss) income from continuing operations, net		$	(0.61)	$	0.36
	Income from discontinued operations, net			-		0.08
	Net (loss) income per Class A unit		$	(0.61)	$	0.44


(1)	The effect of dilutive securities for the three months ended March 31, 2016 and 2015 excludes an aggregate of 1,867 and 76 weighted average Class A unit equivalents, respectively, as their effect was anti-dilutive.

(Amounts in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2015		2014	2015		2014
Beginning balance	$	565,976	$	549,091	$	513,973	$	667,710
Purchases		11		725		95,011		3,392
Dispositions / distributions		(8,029)		(74,755)		(91,450)		(307,268)
Net unrealized (losses) gains		(2,544)		18,333		37,001		55,221
Net realized (losses) gains		(907)		1,998		1,405		76,337
Other, net		907		-		(526)		-
Ending balance	$	555,414	$	495,392	$	555,414	$	495,392

19. Commitments and Contingencies

24Insurance

~~VORNADO~~We ~~REALTY~~maintain Lgeneral liability insurance with limits of $300,000,000 per occurrence and per property, and all risk property and rental value insurance with limits of $2.P0 billion per occurrence, with sub-limits for certain perils such as flood and earthquake. Our California properties have earthquake insurance with coverage of $180,000,000 per occurrence and in the annual aggregate, subject to a deductible in the amount of 5% of the value of the affected property. We maintain coverage for terrorism acts with limits of $4.0 billion per occurrence and in the aggregate, and $2.0 billion per occurrence and in the aggregate for terrorism involving nuclear, biological, chemical and radiological (“NBCR”) terrorism events, as defined by Terrorism Risk Insurance Program Reauthorization Act of 2015, which expires in December 2020.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED~~25

~~(UNAUDITED)~~VORNADO REALTY L.P.

~~14. Fair~~NOTES ~~Value~~TO ~~Measurements~~CONSOLIDATED –FINANCIAL ~~continued~~STATEMENTS - CONTINUED

~~Financial~~(UNAUDITED) ~~Assets and Liabilities Measured at Fair Value on a Recurring Basis - continued~~

~~Deferred Compensation~~19. Commitments ~~Plan~~and ~~Assets~~Contingencies - continued

~~Deferred compensation~~Insurance plan assets that are classified as Level 3 consist of investments in limited partnerships and investment funds, which are managed by third parties. We receive quarterly financial reports from a third-~~party administrator,~~ which are compiled from the quarterly reports provided to them from each limited partnership and investment fund. The quarterly reports provide net asset values on a fair value basis which are audited by independent public accounting firms on an annual basis. The third-party administrator does not adjust these values in determining our share of the net assets and we do not adjust these values when reported in our consolidated financial statements. continued

~~The~~Penn ~~table~~Plaza ~~below~~Insurance Company, LLC ~~summarizes~~(“PPIC”), ~~the~~our ~~changes~~wholly inowned ~~the~~consolidated ~~fair~~subsidiary, ~~value~~acts as a re-insurer with respect to a portion of ~~deferred~~all ~~compensation~~risk ~~plan~~property ~~assets~~and ~~that~~rental value insurance and a ~~are~~portion ~~classified~~of asour ~~Level~~earthquake 3insurance coverage, and as a direct insurer for coverage ~~the~~for ~~three~~acts of terrorism including NBCR acts. Coverage for acts of terrorism (excluding NBCR acts) is fully reinsured by third party insurance companies and ~~nine~~the ~~months~~Federal ~~ended~~government ~~September~~with 30no exposure to PPIC. For NBCR acts, ~~2015~~PPIC is responsible for a deductible of $2,400,000 per occurrence and ~~2014~~16% of the balance of a covered loss and the Federal government is responsible for the remaining 84% of a covered loss. We are ultimately responsible for any loss incurred by PPIC.

(Amounts in thousands)	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2015		2014	2015		2014
Beginning balance	$	67,668	$	64,609	$	63,315	$	68,782
Purchases		2,153		1,377		8,384		10,936
Sales		(171)		(4,917)		(5,264)		(21,296)
Realized and unrealized (loss) gain		(1,466)		927		1,256		2,901
Other, net		24		1,187		517		1,860
Ending balance	$	68,208	$	63,183	$	68,208	$	63,183

We continue to monitor the state of the insurance market and the scope and costs of coverage for acts of terrorism. However, we cannot anticipate what coverage will be available on commercially reasonable terms in the future.

~~Fair~~Our ~~Value~~debt ~~Measurements~~instruments, consisting of mortgage loans secured by our properties which are non-recourse to us, senior unsecured notes and revolving credit agreements contain customary covenants requiring us to maintain insurance. Although we believe that we have adequate insurance coverage for purposes of these agreements, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. Further, if lenders insist on agreater ~~Nonrecurring~~coverage than we are able to obtain, it ~~Basis~~could adversely affect our ability to finance our properties and expand our portfolio.

~~Assets~~Other ~~measured~~Commitments at fair value on a nonrecurring basis on our consolidated balance sheets consist primarily of real estate assets required to be measured for impairment at December 31, 2014. There are no assets remaining at fair value on a nonrecurring basis at September 30, 2015. The fair values of real estate assets required to be measured for impairment were determined using widely accepted valuation techniques, including (i) discounted cash flow analysis, which considers, among other things, leasing assumptions, growth rates, discount rates and ~~terminal capitalization rates, (ii) income capitalization approach, which considers prevailing market capitalization rates, and (iii) comparable sales activity.~~Contingencies

(Amounts in thousands)	As of December 31, 2014
	Total		Level 1		Level 2		Level 3
Real estate assets	$	4,848	$	-	$	-	$	4,848

We are from time to time involved in legal actions arising in the ordinary course of business. In our opinion, after consultation with legal counsel, the outcome of such matters is not expected to have a material adverse effect on our financial position, results of operations or cash flows.

25Each of our properties has been subjected to varying degrees of environmental assessment at various times. The environmental assessments did not reveal any material environmental contamination. However, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites, or changes in cleanup requirements would not result in significant costs to us.

~~VORNADO~~Our ~~REALTY~~mortgage loans Lare non-recourse to us.P However, in certain cases we have provided guarantees or master leased tenant space. These guarantees and master leases terminate either upon the satisfaction of specified circumstances or repayment of the underlying loans. As of March 31, 2016, the aggregate dollar amount of these guarantees and master leases is approximately $481,000,000.

~~NOTES~~At TOMarch ~~CONSOLIDATED~~31, ~~FINANCIAL~~2016, $32,540,000 ~~STATEMENTS~~of -letters ~~CONTINUED~~of credit were outstanding under one of our unsecured revolving credit facilities. Our unsecured revolving credit facilities contain financial covenants that require us to maintain minimum interest coverage and maximum debt to market capitalization ratios, and provide for higher interest rates in the event of a decline in our ratings below Baa3/BBB. Our unsecured revolving credit facilities also contain customary conditions precedent to borrowing, including representations and warranties, and also contain customary events of default that could give rise to accelerated repayment, including such items as failure to pay interest or principal.

~~(UNAUDITED)~~As of March 31, 2016, we expect to fund additional capital to certain of our partially owned entities aggregating approximately $80,000,000.

~~14. Fair~~As ~~Value~~of ~~Measurements~~March –31, 2016, ~~continued~~we have construction commitments aggregating approximately $810,700,000.

~~Financial Assets and Liabilities not Measured at Fair Value~~ 26

~~Financial~~VORNADO ~~assets~~REALTY and liabilities that are not measured at fair value on our consolidated balance sheets include cash equivalents (primarily money market funds, which invest in obligations of the United States government), mortgage and mezzanine loans receivable and our secured and unsecured debtL. Estimates of the fair value of these instruments are determined by the standard practice of modeling the contractual cash flows required under the instrument and discounting them back to their present value at the appropriate current risk adjusted interest rate, which is provided by a third-party specialistP. For floating rate debt, we use forward rates derived from observable market yield curves to project the expected cash flows we would be required to make under the instrument. The fair value of cash equivalents and borrowings under our revolving credit facility is classified as Level 1, and the fair value of our mortgage and mezzanine loans receivable as of December 31, 2014 is classified as Level 3. There are no borrowings under our revolving credit facility as of September 30, 2015 and December 31, 2014 and no mortgage and mezzanine loans outstanding as of September 30, 2015. The fair value of our secured and unsecured debt are classified as Level 2. The table below summarizes the carrying amounts and fair value of these financial instruments as of September 30, 2015 and December 31, 2014.

(Amounts in thousands)		As of September 30, 2015				As of December 31, 2014
		Carrying		Fair		Carrying		Fair
		Amount		Value		Amount		Value
Cash equivalents		$	545,617	$	546,000	$	749,418	$	749,000
Mortgage and mezzanine loans receivable
	(included in other assets)		-		-		16,748		17,000
		$	545,617	$	546,000	$	766,166	$	766,000
Debt:
	Mortgages payable	$	9,159,413	$	9,272,000	$	8,263,165	$	8,224,000
	Senior unsecured notes		847,594		884,000		1,347,159		1,385,000
	Revolving credit facility debt		-		-		-		-
		$	10,007,007	$	10,156,000	$	9,610,324	$	9,609,000

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

~~15. Incentive~~(UNAUDITED) ~~Compensation~~

Vornado’s 2010 Omnibus Share Plan (the “Plan”) provides for grants of incentive and non-qualified Vornado share options, Vornado restricted shares, restricted units and Out-Performance Plan awards to certain of Vornado’s employees and officers20. We Segment account for all equity-based compensation in accordance with ASC 718, Compensation – Stock Compensation. Equity-based compensation expense was $6,501,000 and $8,315,000 for the three months ended September 30, 2015 and 2014, respectively and $33,328,000 and $28,389,000 for the nine months ended September 30, 2015 and 2014, respectively.Information

26Below is a summary of net income and a reconciliation of net income to EBITDA(1) by segment for the three months ended March 31, 2016 and 2015.

VORNADO REALTY L.P.


(Amounts in thousands)		For the Three Months Ended March 31, 2016
			Total		New York			Washington, DC			Other
Total revenues			$	613,037	$	410,825		$	128,012		$	74,200
Total expenses				613,317		269,595			256,565			87,157
Operating (loss) income				(280)		141,230			(128,553)			(12,957)
(Loss) income from partially owned entities				(4,240)		(3,563)			(2,043)			1,366
Income from real estate fund investments				11,284		-			-			11,284
Interest and other investment income, net				3,518		1,115			58			2,345
Interest and debt expense				(100,489)		(54,586)			(15,935)			(29,968)
Net gain on disposition of wholly owned and partially
	owned assets			714		-			-			714
(Loss) income before income taxes				(89,493)		84,196			(146,473)			(27,216)
Income tax expense				(2,831)		(959)			(264)			(1,608)
(Loss) income from continuing operations				(92,324)		83,237			(146,737)			(28,824)
Income from discontinued operations				716		-			-			716
Net (loss) income				(91,608)		83,237			(146,737)			(28,108)
Less net income attributable to noncontrolling interests in
	consolidated subsidiaries			(9,678)		(3,429)			-			(6,249)
Net (loss) income attributable to Vornado Realty L.P.				(101,286)		79,808			(146,737)			(34,357)
Interest and debt expense⁽²⁾				126,120		71,198			19,406			35,516
Depreciation and amortization⁽²⁾				174,811		108,403			42,681			23,727
Income tax expense ⁽²⁾				3,261		1,090			265			1,906
EBITDA⁽¹⁾			$	202,906	$	260,499	⁽³⁾	$	(84,385)	⁽⁴⁾	$	26,792	⁽⁵⁾

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


(Amounts in thousands)		For the Three Months Ended March 31, 2015
		Total		New York			Washington, DC			Other
Total revenues		$	606,802	$	399,513		$	133,968		$	73,321
Total expenses			439,088		252,760			92,997			93,331
Operating income (loss)			167,714		146,753			40,971			(20,010)
(Loss) income from partially owned entities			(2,743)		(5,663)			131			2,789
Income from real estate fund investments			24,089		-			-			24,089
Interest and other investment income, net			10,792		1,862			13			8,917
Interest and debt expense			(91,674)		(45,351)			(18,160)			(28,163)
Net gain on disposition of wholly owned and partially
	owned assets		1,860		-			-			1,860
Income (loss) before income taxes			110,038		97,601			22,955			(10,518)
Income tax (expense) benefit			(971)		(943)			674			(702)
Income (loss) from continuing operations			109,067		96,658			23,629			(11,220)
Income from discontinued operations			16,179		-			-			16,179
Net income			125,246		96,658			23,629			4,959
Less net income attributable to noncontrolling interests in
	condolidated subsidiaries		(15,882)		(1,506)			-			(14,376)
Net income (loss) attributable to Vornado Realty L.P.			109,364		95,152			23,629			(9,417)
Interest and debt expense⁽²⁾			114,675		58,667			21,512			34,496
Depreciation and amortization⁽²⁾			156,450		94,124			40,752			21,574
Income tax (benefit) expense⁽²⁾			(739)		1,002			(2,636)			895
EBITDA⁽¹⁾		$	379,750	$	248,945	⁽³⁾	$	83,257	⁽⁴⁾	$	47,548	⁽⁵⁾


See notes on the following pages.

~~(UNAUDITED)~~ 27

~~16. Fee~~VORNADO ~~and~~REALTY ~~Other Income~~ L.P.

~~The following~~NOTES ~~table~~TO ~~sets~~CONSOLIDATED ~~forth~~FINANCIAL ~~the~~STATEMENTS ~~details~~- ~~of fee and other income:~~CONTINUED

(Amounts in thousands)	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,
	2015		2014		2015		2014
BMS cleaning fees	$	18,563	$	22,467	$	62,937	$	63,618
Management and leasing fees		4,045		4,266		12,511		15,859
Lease termination fees		1,517		3,300		8,157		11,422
Other income		10,036		7,746		29,393		23,631
	$	34,161	$	37,779	$	112,998	$	114,530

(UNAUDITED)

Management and leasing fees include management fees from Interstate Properties, a related party, of $132,000 and $132,000 for the three months ended September 30, 2015 and 2014, and $403,000 and $397,000 for the nine months ended September 30, 2015 and 2014, respectively20. ~~The~~ Segment ~~above~~Information ~~table excludes fee income from partially owned entities, which is included in “loss from partially owned entities” (see Note 7~~ – ~~Investments in Partially Owned Entities).~~continued

17. Interest and Other Investment Income, Net


Notes to preceding tabular information:


(1)	EBITDA represents "Earnings Before Interest, Taxes, Depreciation and Amortization." We consider EBITDA a non-GAAP financial measure for making decisions and assessing the unlevered performance of our segments as it relates to the total return on assets as opposed to the levered return on equity. As properties are bought and sold based on a multiple of EBITDA, we utilize this measure to make investment decisions as well as to compare the performance of our assets to that of our peers. EBITDA should not be considered a substitute for net income. EBITDA may not be comparable to similarly titled measures employed by other companies.


(2)	Interest and debt expense, depreciation and amortization and income tax expense (benefit) in the reconciliation of net (loss) income to EBITDA includes our share of these items from partially owned entities.


(3)	The elements of "New York" EBITDA are summarized below.

	(Amounts in thousands)		For the Three Months Ended March 31,
			2016		2015
	Office^(a)		$	152,729	$	154,309
	Retail			93,323		81,305
	Residential			6,350		5,050
	Alexander's			11,569		10,407
	Hotel Pennsylvania			(3,472)		(2,126)
		Total New York	$	260,499	$	248,945


	(a)	2015 includes $3,540 of EBITDA from 20 Broad Street which was sold in December 2015. Excluding this item, EBITDA was $150,769.


(4)	The elements of "Washington, DC" EBITDA are summarized below.

	(Amounts in thousands)		For the Three Months Ended March 31,
			2016		2015
	Office, excluding the Skyline properties ^(a)		$	61,988	$	67,385
	Skyline properties			5,092		6,055
	Skyline properties impairment loss			(160,700)		-
		Total Office		(93,620)		73,440
	Residential			9,235		9,817
		Total Washington, DC	$	(84,385)	$	83,257


	(a)	2015 includes $1,923 of EBITDA from 1750 Pennsylvania Avenue which was sold in September 2015. Excluding this item, EBITDA was $65,462.

~~The following table sets forth the details of interest and other investment income:~~ 28

(Amounts in thousands)		For the Three Months Ended				For the Nine Months Ended
		September 30,				September 30,
		2015		2014		2015		2014
Dividends on marketable securities		$	3,215	$	3,200	$	9,620	$	9,504
Mark-to-market of investments in our deferred compensation plan (1)			(2,577)		1,352		(327)		8,132
Interest on loans receivable			1,154		1,129		5,113		4,843
Other, net			1,368		1,887		5,212		6,335
		$	3,160	$	7,568	$	19,618	$	28,814
(1)	This (loss) income is entirely offset by the expense resulting from the mark-to-market of the deferred compensation plan liability, which is included in "general and administrative" expense.

VORNADO REALTY L.P.

~~18. Interest~~NOTES ~~and~~TO ~~Debt~~CONSOLIDATED ~~Expense~~FINANCIAL STATEMENTS - CONTINUED

~~The following~~(UNAUDITED) ~~table sets forth the details of interest and debt expense:~~

(Amounts in thousands)		For the Three Months Ended				For the Nine Months Ended
		September 30,				September 30,
		2015		2014		2015		2014
Interest expense		$	113,485	$	110,296	$	305,110	$	328,544
Amortization of deferred financing costs			7,864		6,856		22,817		19,015
Capitalized standby loan commitment termination fee
	(220 Central Park South development project)		(15,000)		-		(15,000)		-
Capitalized interest and debt expense			(11,005)		(16,335)		(33,817)		(46,517)
		$	95,344	$	100,817	$	279,110	$	301,042

20. Segment Information – continued


Notes to preceding tabular information - continued:


(5)	The elements of "Other" EBITDA are summarized below.

	(Amounts in thousands)		For the Three Months Ended March 31,
			2016		2015
	Our share of real estate fund investments:
		Income before net realized/unrealized gains	$	2,231	$	1,614
		Net realized/unrealized gains on investments		1,561		5,548
		Carried interest		1,519		3,388
	Total			5,311

Filing Compare · VORNADO REALTY LP