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:

March 31, 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
		March 31, 2016 and December 31, 2015	3

		Consolidated Statements of Income (Unaudited) for the
		Three Months Ended March 31, 2016 and 2015	4

		Consolidated Statements of Comprehensive Income (Unaudited)
		for the Three Months Ended March 31, 2016 and 2015	5

		Consolidated Statements of Changes in Equity (Unaudited) for the
		Three Months Ended March 31, 2016 and 2015	6

		Consolidated Statements of Cash Flows (Unaudited) for the
		Three Months Ended March 31, 2016 and 2015	8

		Notes to Consolidated Financial Statements (Unaudited)	10

		Report of Independent Registered Public Accounting Firm	30

	Item 2.	Management's Discussion and Analysis of Financial Condition
		and Results of Operations	31

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	57

	Item 4.	Controls and Procedures	57


PART II.		Other Information:

	Item 1.	Legal Proceedings	58

	Item 1A.	Risk Factors	58

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58

	Item 3.	Defaults Upon Senior Securities	58

	Item 4.	Mine Safety Disclosures	58

	Item 5.	Other Information	58

	Item 6.	Exhibits	58

SIGNATURES			59

EXHIBIT INDEX			60

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VORNADO REALTY L.P.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

(Amounts in thousands, except unit amounts)			March 31, 2016		December 31, 2015
ASSETS
Real estate, at cost:
	Land		$	4,164,796	$	4,164,799
	Buildings and improvements			12,358,371		12,582,671
	Development costs and construction in progress			1,305,849		1,226,637
	Leasehold improvements and equipment			109,536		116,030
		Total		17,938,552		18,090,137
	Less accumulated depreciation and amortization			(3,352,986)		(3,418,267)
Real estate, net				14,585,566		14,671,870
Cash and cash equivalents				1,673,566		1,835,707
Restricted cash				109,147		107,799
Marketable securities				162,091		150,997
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				1,553,250		1,550,422
Real estate fund investments				566,696		574,761
Receivable arising from the straight-lining of rents, net of allowance of $2,539 and $2,751				973,709		931,245
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 $188,094 and $187,360				218,388		227,901
Assets related to discontinued operations				36,514		37,020
Other assets				411,819		477,088
			$	20,873,374	$	21,143,293

LIABILITIES, REDEEMABLE PARTNERSHIP UNITS AND EQUITY
Mortgages payable, net			$	9,844,242	$	9,513,713
Senior unsecured notes, net				844,514		844,159
Unsecured revolving credit facilities				-		550,000
Unsecured term loan, net				371,076		183,138
Accounts payable and accrued expenses				447,700		443,955
Deferred revenue				325,013		346,119
Deferred compensation plan				116,824		117,475
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 - 12,414,019 and 12,242,820 units outstanding			1,172,256		1,223,793
	Series D cumulative redeemable preferred units - 177,101 units outstanding			5,428		5,428
		Total redeemable partnership units		1,177,684		1,229,221
Equity:
	Partners' capital			8,471,519		8,417,454
	Earnings less than distributions			(1,999,994)		(1,766,780)
	Accumulated other comprehensive income			53,399		46,921
		Total Vornado Realty L.P. equity		6,524,924		6,697,595
Noncontrolling interests in consolidated subsidiaries				774,632		778,483
	Total equity			7,299,556		7,476,078
			$	20,873,374	$	21,143,293

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,
		2016		2015
REVENUES:
	Property rentals	$	519,492	$	500,274
	Tenant expense reimbursements		59,575		66,921
	Fee and other income		33,970		39,607
Total revenues			613,037		606,802
EXPENSES:
	Operating		256,349		254,493
	Depreciation and amortization		142,957		124,122
	General and administrative		48,704		58,492
	Impairment loss and acquisition and transaction related costs		165,307		1,981
Total expenses			613,317		439,088
Operating (loss) income			(280)		167,714
Loss from partially owned entities			(4,240)		(2,743)
Income from real estate fund investments			11,284		24,089
Interest and other investment income, net			3,518		10,792
Interest and debt expense			(100,489)		(91,674)
Net gain on disposition of wholly owned and partially owned assets			714		1,860
(Loss) income before income taxes			(89,493)		110,038
Income tax expense			(2,831)		(971)
(Loss) income from continuing operations			(92,324)		109,067
Income from discontinued operations			716		16,179
Net (loss) income			(91,608)		125,246
Less net income attributable to noncontrolling interests in consolidated subsidiaries			(9,678)		(15,882)
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

(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
	Weighted average units outstanding		200,072		198,675

(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
	Weighted average units outstanding		200,072		200,749

DISTRIBUTIONS PER CLASS A UNIT		$	0.63	$	0.63


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,
		2016		2015
Net (loss) income		$	(91,608)	$	125,246
Other comprehensive income (loss):
	Increase (reduction) in unrealized net gain on available-for-sale securities		11,094		(21,332)
	Pro rata share of other comprehensive income of nonconsolidated subsidiaries		6		157
	Reduction in value of interest rate swaps and other		(4,195)		(771)
Comprehensive (loss) income			(84,703)		103,300
Less comprehensive income attributable to noncontrolling interests in consolidated subsidiaries			(9,678)		(15,882)
Comprehensive (loss) income attributable to Vornado Realty L.P.		$	(94,381)	$	87,418


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		Subsidiaries		Equity
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 loss attributable to Vornado Realty L.P.				-		-		-		-		(101,286)		-		-		(101,286)
Net loss attributable to redeemable
	partnership units			-		-		-		-		7,487		-		-		7,487
Net income attributable to noncontrolling
	interests in consolidated subsidiaries			-		-		-		-		-		-		9,678		9,678
Distributions to Vornado				-		-		-		-		(118,867)		-		-		(118,867)
Distributions to preferred unitholders				-		-		-		-		(20,364)		-		-		(20,364)
Class A Units issued to Vornado:
	Upon redemption of redeemable Class A
		units, at redemption value		-		-		157		14,482		-		-		-		14,482
	Under Vornado's employees' share option plan			-		-		26		2,166		-		-		-		2,166
	Under Vornado's dividend reinvestment plan			-		-		4		357		-		-		-		357
Distributions:
	Real estate fund investments			-		-		-		-		-		-		(13,487)		(13,487)
	Other			-		-		-		-		-		-		(152)		(152)
Deferred compensation units and options				-		-		7		536		(186)		-		-		350
Increase in unrealized net gain on
	available-for-sale securities			-		-		-		-		-		11,094		-		11,094
Pro rata share of other comprehensive income
	of nonconsolidated subsidiaries			-		-		-		-		-		6		-		6
Reduction in value of interest rate swaps				-		-		-		-		-		(4,195)		-		(4,195)
Adjustments to carry redeemable Class A
	units at redemption value			-		-		-		36,524		-		-		-		36,524
Redeemable partnership units' share of above
	adjustments			-		-		-		-		-		(427)		-		(427)
Other				-		-		-		-		2		-		110		112
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		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
Net income attributable to Vornado Realty L.P.				-		-		-		-		109,364		-		-		109,364
Net income attributable to redeemable
	partnership units			-		-		-		-		(5,287)		-		-		(5,287)
Net income attributable to noncontrolling
	interests in consolidated subsidiaries			-		-		-		-		-		-		15,882		15,882
Distribution of Urban Edge Properties				-		-		-		-		(464,262)		-		(341)		(464,603)
Distributions to Vornado				-		-		-		-		(118,447)		-		-		(118,447)
Distributions to preferred unitholders				-		-		-		-		(19,484)		-		-		(19,484)
Class A Units issued to Vornado:
	Upon redemption of redeemable Class A
		units, at redemption value		-		-		210		23,493		-		-		-		23,493
	Under Vornado's employees' share option plan			-		-		165		11,679		(2,579)		-		-		9,100
	Under Vornado's dividend reinvestment plan			-		-		3		338		-		-		-		338
Contributions:
	Real estate fund investments			-		-		-		-		-		-		51,350		51,350
Distributions:
	Real estate fund investments			-		-		-		-		-		-		(52,882)		(52,882)
	Other			-		-		-		-		-		-		(125)		(125)
Conversion of Series A preferred units to
	Class A units			-		(12)		1		12		-		-		-		-
Deferred compensation units and options				-		-		7		1,325		(359)		-		-		966
Reduction in unrealized net gain on
	available-for-sale securities			-		-		-		-		-		(21,332)		-		(21,332)
Pro rata share of other comprehensive income
	of nonconsolidated subsidiaries			-		-		-		-		-		157		-		157
Reduction in value of interest rate swaps				-		-		-		-		-		(776)		-		(776)
Adjustments to carry redeemable Class A
	units at redemption value			-		-		-		25,349		-		-		-		25,349
Redeemable partnership units' share of above
	adjustments			-		-		-		-		-		1,288		-		1,288
Other				-		-		-		-		-		5		(90)		(85)
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 Three Months Ended March 31,
			2016		2015
Cash Flows from Operating Activities:
Net (loss) income			$	(91,608)	$	125,246
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
	Real estate impairment losses			160,700		256
	Depreciation and amortization (including amortization of deferred financing costs)			150,648		131,112
	Straight-lining of rental income			(41,626)		(29,474)
	Distributions of income from partially owned entities			29,860		15,874
	Amortization of below-market leases, net			(17,507)		(12,754)
	Other non-cash adjustments			15,248		15,865
	Return of capital from real estate fund investments			14,676		72,208
	Net realized and unrealized gains on real estate fund investments			(6,611)		(17,639)
	Loss from partially owned entities			4,240		2,405
	Net gain on disposition of wholly owned and partially owned assets			(714)		(1,860)
	Net gains on sale of real estate and other			-		(32,243)
	Changes in operating assets and liabilities:
		Real estate fund investments		-		(95,022)
		Tenant and other receivables, net		800		975
		Prepaid assets		64,851		62,658
		Other assets		(20,113)		(13,093)
		Accounts payable and accrued expenses		12,774		(12,691)
		Other liabilities		1,027		(17,307)
Net cash provided by operating activities				276,645		194,516

Cash Flows from Investing Activities:
	Development costs and construction in progress			(127,283)		(88,052)
	Additions to real estate			(77,243)		(54,466)
	Investments in partially owned entities			(63,188)		(23,912)
	Distributions of capital from partially owned entities			25,524		13,409
	Proceeds from sales of real estate and related investments			2,867		334,725
	Restricted cash			(1,348)		1,282
	Acquisitions of real estate and other			(938)		(49,878)
	Proceeds from sales and repayments of mortgage and mezzanine loans receivable and other			11		16,763
Net cash (used in) provided by investing activities				(241,598)		149,871

See notes to consolidated financial statements (unaudited).

VORNADO REALTY L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(UNAUDITED)

(Amounts in thousands)				For the Three Months Ended March 31,
				2016		2015
Cash Flows from Financing Activities:
	Repayments of borrowings			$	(909,617)	$	(907,431)
	Proceeds from borrowings				887,500		800,000
	Distributions to Vornado				(118,867)		(118,447)
	Distributions to redeemable security holders and noncontrolling interests				(21,474)		(60,287)
	Distributions to preferred unitholders				(20,364)		(19,484)
	Debt issuance and other costs				(16,704)		(5,076)
	Proceeds received from exercise of Vornado stock options				2,523		12,018
	Repurchase of Class A units related to equity compensation agreements and related
		tax withholdings and other			(185)		(2,939)
	Cash included in the spin-off of Urban Edge Properties				-		(225,000)
	Contributions from noncontrolling interests in consolidated subsidiaries				-		51,350
Net cash used in financing activities					(197,188)		(475,296)
Net decrease in cash and cash equivalents					(162,141)		(130,909)
Cash and cash equivalents at beginning of period					1,835,707		1,198,477
Cash and cash equivalents at end of period				$	1,673,566	$	1,067,568


Supplemental Disclosure of Cash Flow Information:
	Cash payments for interest, excluding capitalized interest of $7,497 and $8,479			$	91,719	$	91,702
	Cash payments for income taxes			$	2,193	$	2,175


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
			Liabilities		-		(1,482,660)
			Equity		-		(239,603)
	Transfer of interest in real estate to Pennsylvania Real Estate Investment Trust				-		(145,313)
	Financing assumed in acquisitions				-		62,000
	Like-kind exchange of real estate:
			Acquisitions		-		57,722
			Dispositions		-		(38,822)
	Receipt of security deposits included in restricted cash and other liabilities				-		42,346


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 March 31, 2016. All references to “we,” “us,” “our,” the “Company” and “Operating Partnership” refer to Vornado Realty L.P. and its consolidated subsidiaries.

2. Basis of Presentation

The accompanying consolidated financial statements are unaudited and include the accounts of Vornado Realty L.P. 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 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 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.

We have made estimates and assumptions that affect the reported amounts of assets and 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.

3. Recently Issued Accounting Literature

In May 2014, the Financial Accounting Standards Board (“FASB”) issued an update ("ASU 2014-09") establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. ASU 2014-09 establishes 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.

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

3. Recently Issued Accounting Literature - continued

In June 2014, the FASB issued an update (“ASU 2014-12”) to 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 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.

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. 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 (“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.

In 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. ASU 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase. Lessees are required to record a right-of-use asset and a 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 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.

In March 2016, the FASB issued an update (“ASU 2016-09”) Improvements to Employee Share-Based Payment Accounting to ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). ASU 2016-09 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.

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

4. Real Estate Fund Investments

We 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.

We are also the general partner and investment manager of Crowne Plaza Times Square Hotel Co-Investment (the “Co-Investment”), which owns a 24.7% 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.

At March 31, 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, 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 for the three months ended March 31, 2016 and 2015.

(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.

5. Marketable Securities

Below is a summary of our marketable securities portfolio as of March 31, 2016 and December 31, 2015.


(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

VORNADO REALTY L.P.

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(UNAUDITED)

6. Investments in Partially Owned Entities

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

As of March 31, 2016, we own 1,654,068 Alexander’s common shares, representing a 32.4% interest in Alexander’s. We account for our investment in Alexander’s under the equity method. We manage, lease and develop Alexander’s properties pursuant to agreements which expire in March of each year and are automatically renewable.

As 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.

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

As of March 31, 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 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 (“PREIT”) (NYSE: PEI)

As of March 31, 2016, we own 6,250,000 PREIT operating partnership units, representing 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 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.

One Park Avenue

On March 7, 2016, we completed a $300,000,000 refinancing of our 55% owned joint venture, One Park Avenue, a 947,000 square foot Manhattan office building. The loan matures in March 2021 and is interest only at LIBOR plus 1.75% (2.19% at March 31, 2016). The property was previously encumbered by a 4.995%, $250,000,000 mortgage maturing in March 2016.

Mezzanine Loan – New York

On March 17, 2016, we entered into a joint venture, in which we own a 33.3% interest, which owns a $138,240,000 mezzanine loan. The interest rate is LIBOR plus 8.875% (9.32% at March 31, 2016) and the debt matures in November 2016, with two three-month extension options. At March 31, 2016, the joint venture has an $11,760,000 remaining commitment, of which our share is $3,920,000. The joint venture’s investment is subordinate to $350,000,000 of third party debt. We account for our investment in the joint venture under the equity method.

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

6. Investments in Partially Owned Entities – continued

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

(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.

(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.

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

7. Dispositions

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.

(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

VORNADO REALTY L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

(UNAUDITED)

8. Identified Intangible Assets and Liabilities

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

(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

Amortization of acquired below-market leases, 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 annual amortization of acquired below-market leases, net of acquired above-market leases, for each of the five succeeding years commencing January 1, 2017 is as follows:

(Amounts in thousands)

VORNADO REALTY LP 10-Q