Vornado Realty Trust (VNO) Business, 2021

Vornado is a fully‑integrated REIT and conducts its business through, and substantially all of its interests in properties are held by, the Operating Partnership, a Delaware limited partnership. Accordingly, Vornado’s cash flow and ability to pay dividends to its shareholders are dependent upon the cash flow of the Operating Partnership and the ability of its direct and indirect subsidiaries to first satisfy their obligations to creditors. Vornado is the sole general partner of and owned approximately 92.6% of the common limited partnership interest in the Operating Partnership as of December 31, 2021.

We currently own all or portions of:

•67 Manhattan operating properties consisting of:

•20.6 million square feet of office space in 32 of the properties;

•2.7 million square feet of street retail space in 60 of the properties;

•1,674 units in eight residential properties;

•Multiple development sites, including Hotel Pennsylvania;

•A 32.4% interest in Alexander’s, Inc. (“Alexander’s”) (NYSE: ALX), which owns six properties in the greater New York metropolitan area, including 731 Lexington Avenue, the 1.1 million square foot Bloomberg, L.P. headquarters building, and The Alexander, a 312-unit apartment tower in Queens;

•Signage throughout the Penn District and Times Square; and

•Building Maintenance Services LLC ("BMS"), a wholly owned subsidiary, which provides cleaning and security services for our buildings and third parties.

•The 3.7 million square foot theMART in Chicago;

•A 70% controlling interest in 555 California Street, a three-building office complex in San Francisco’s financial district aggregating 1.8 million square feet;

•A 25% interest in Vornado Capital Partners, our real estate fund (the "Fund"). We are the general partner and investment manager of the fund. The fund is in wind-down; and

•Other real estate and investments.

Our business objective is to maximize Vornado shareholder value. We intend to achieve this objective by continuing to pursue our investment philosophy and to execute our operating strategies through:

•maintaining a superior team of operating and investment professionals and an entrepreneurial spirit;

•investing in properties in select markets, such as New York City, where we believe there is a high likelihood of capital appreciation;

•acquiring quality properties at a discount to replacement cost and where there is a significant potential for higher rents;

•developing and redeveloping properties to increase returns and maximize value; and

•investing in operating companies that have a significant real estate component.

We expect to finance our growth, acquisitions and investments using internally generated funds and proceeds from asset sales and by accessing the public and private capital markets. We may also offer Vornado common or preferred shares or Operating Partnership units in exchange for property and may repurchase or otherwise reacquire these securities in the future.

We completed the following acquisition during 2021:

•$158 million purchase of our joint venture partner's 45% ownership interest in One Park Avenue (valuing the property at $875 million, encumbered by $525 million of existing debt), increasing our ownership interest to 100%.

We completed the following sale transactions during 2021:

•$137 million net proceeds from the sale of six condominium units at 220 Central Park South ("220 CPS");

•$100 million aggregate sale of three Manhattan retail properties located at 677-679, 759-771 and 828-850 Madison Avenue;

•$75 million sale by Alexander's (32.4% interest) of its Paramus, New Jersey property to IKEA Property, Inc. ("IKEA"), the tenant at the property, pursuant to IKEA's purchase option contained in the lease;

•$28 million sale of 501 Broadway by the Fund (25% interest); and

•$10 million sale by Alexander's (32.4% interest) of a parcel of land in the Bronx, New York.

We completed the following financing transactions during 2021:

•$1.25 billion unsecured revolving credit facility extended from January 2023 to April 2026, lowering the interest rate to LIBOR plus 0.89% from LIBOR plus 1.00%;

•$1.2 billion refinancing of 555 California Street (70% interest);

•$950 million refinancing of 1290 Avenue of the Americas (70% interest);

•$750 million green bond public offering of senior unsecured notes;

•$675 million repayment of theMART mortgage loan;

•$525 million refinancing of One Park Avenue;

•$500 million modification of the PENN 11 mortgage loan lowering the interest rate to LIBOR plus 1.95% from LIBOR plus 2.75%, resulting in a fixed rate of 2.23% pursuant to the interest rate swap agreement;

•$350 million refinancing of 909 Third Avenue;

•$300 million issuance of 4.45% Series O cumulative redeemable preferred shares; and

•$300 million redemption of 5.70% Series K cumulative redeemable preferred shares.

PENN District

Farley

Our 95% joint venture (5% is owned by the Related Companies ("Related")) is developing Farley Office and Retail, which will include approximately 845,000 rentable square feet of commercial space, comprised of approximately 730,000 square feet of office space and approximately 115,000 square feet of restaurant and retail space. The total development cost of this project is estimated to be approximately $1,120,000,000 at our 95% share, of which $896,186,000 of cash has been expended as of December 31, 2021.

PENN 1

We are redeveloping PENN 1, a 2,547,000 square foot office building located on 34th Street between Seventh and Eighth Avenue. In December 2020, we entered into an agreement with the Metropolitan Transportation Authority (the “MTA”) to oversee the redevelopment of the Long Island Rail Road Concourse at Penn Station (the "Concourse"), within the footprint of PENN 1. Skanska USA Civil Northeast, Inc. will perform the redevelopment under a fixed price contract for $380,000,000 which is being funded by the MTA. In connection with the redevelopment, we entered into an agreement with the MTA which will result in the widening of the Concourse to relieve overcrowding and our trading of 15,000 square feet of back of house space for 22,000 square feet of retail frontage space. Vornado's total development cost for the PENN 1 project is estimated to be $450,000,000. As of December 31, 2021, $309,437,000 of cash has been expended.

PENN 2

We are redeveloping PENN 2, a 1,795,000 square foot (as expanded) office building, located on the west side of Seventh Avenue between 31st and 33rd Street. The development cost of this project is estimated to be $750,000,000, of which $161,066,000 of cash has been expended as of December 31, 2021.

PENN 15 (Hotel Pennsylvania Site)

We have permanently closed the Hotel Pennsylvania and plan to develop an office tower on the site. Demolition of the existing building structure commenced in the fourth quarter of 2021.

We are also making districtwide improvements within the PENN District. The development cost of these improvements is estimated to be $100,000,000, of which $31,481,000 of cash has been expended as of December 31, 2021.

We are also evaluating other development and redevelopment opportunities at certain of our properties in Manhattan including, in particular, the PENN District.

There can be no assurance that the above projects will be completed, completed on schedule or within budget.

We have long believed a focus on environmental sustainability is responsible management of our business and important to our tenants. It has been central to Vornado's business strategy for over 10 years. The Corporate Governance and Nominating Committee of Vornado's Board of Trustees is assigned with oversight of Environmental, Social and Governance (“ESG”) matters, which includes climate change risk. Environmental sustainability initiatives are carried out by a dedicated team of professionals that work directly with our business units.

Vornado is an industry leader in sustainability, owning and operating more than 27 million square feet of LEED (Leadership in Energy and Environmental Design) certified buildings, representing 95% of our office portfolio, with over 23 million square feet at LEED Gold or Platinum. In 2021, we were selected as a global “Sector Leader” for all Office/Retail Diversified REITs in the Global Real Estate Sustainability Benchmark ("GRESB"), ranked second among 94 responding listed companies in the United States and received the “Green Star” distinction for the ninth consecutive year. In 2020, we received the Leader in the Light Award by the National Association for Real Estate Investment Trusts (NAREIT) for the 11th consecutive year; were recognized as an EPA ENERGY STAR Partner of the Year, with the Sustained Excellence distinction; and received the 2020 Leadership Award from the United States Green Buildings Council (USGBC). We prioritize addressing climate change and in 2019 adopted a 10-year plan to make our buildings carbon neutral by 2030 (“Vision 2030”). Vision 2030 is a multi-faceted approach that prioritizes energy efficiency, demand management, and renewable power. We rely on both existing and future technology, as well as meaningful stakeholder collaboration with our tenants, our employees, and our communities, to achieve this plan. Our commitment to carbon neutrality and associated emissions reduction targets have been approved by the Science Based Targets Initiative as consistent with a 1.5°C climate scenario, the most ambitious goal of the Paris Agreement.

We consider sustainability in all aspects of our business, including the design, construction, retrofit and ongoing maintenance and operations of our portfolio of buildings. We operate our buildings sustainably and efficiently by establishing best practices in energy and water consumption, carbon reduction, resource and waste management and ecologically sensitive procurement. Our policies, from 100% green cleaning to energy efficiency, are implemented across our entire portfolio. Mandatory sustainability training is required for all of our building operators and managers, and we undertake significant outreach with our tenants, employees and investors regarding Vornado’s sustainability programs and strategies.

In January 2022, the Compensation Committee of Vornado's Board of Trustees approved the 2022 performance based long-term incentive plan which for the first time formally ties senior management compensation to achievement of certain ESG targets, including reductions in greenhouse emissions, achieving a specified GRESB score and targeting a higher percentage of LEED Gold or Platinum certified square footage.

We are committed to transparent reporting of sustainability performance indicators and publish an annual ESG Report in accordance with the Global Reporting Initiative and aligned with the metrics codified by the Sustainability Accounting Standards Board and recommendations set forth by the Task Force on Climate-related Financial Disclosures. Further details on our environmental sustainability initiatives and strategy, including our Vision 2030 Roadmap, can be found in our 2020 ESG Report at (esg.vno.com). There can be no assurance that our Vision 2030 commitment will be achieved in the planned time frame. The ESG Report is not incorporated by reference and should not be considered part of this Annual Report on Form 10-K.

As of December 31, 2021, we have approximately 3,224 employees, consisting of (i) 2,710 employees of Building Maintenance Services LLC, a wholly owned subsidiary, which provides cleaning, security, and engineering services primarily to our New York properties, (ii) 235 employees in our corporate office, (iii) 161 employees in leasing and property management, and (iv) 118 employees of theMART. The foregoing does not include employees of partially owned entities.

Human capital management is critical to our success and our employees are the foundation of our human capital. To foster talent and growth, we provide training and continuing education, promote career and personal development, and encourage innovation and engagement.

To attract and retain the best-qualified talent and to help our employees stay healthy, balance their work and personal lives, and meet their financial and retirement goals, we offer competitive benefits including, but not limited to, market-competitive compensation, healthcare (medical, dental and vision coverage), a health savings account, 401(k) and employer match, dependent care flexible spending account, parental leave, adoption/surrogacy benefits, short-term and long-term disability insurance, life insurance, time off/paid holidays, tuition reimbursement, subsidized gym memberships, employee wellness programs and incentives, in-workplace COVID-19 and flu vaccinations, onsite COVID-19 testing, commuter benefits, employee assistance program and workplace flexibility.

We promote career and personal development, provide training and continuing education, and encourage innovation and engagement. This includes tuition reimbursement for our employees’ continuing education and professional development, and the opportunity to participate in a variety of training and networking engagements.

Our employees are critical to our success, and we believe creating a positive and inclusive culture is essential to attracting and retaining engaged employees. We seek to retain our employees by actively engaging with our workforce and we solicit their feedback through our divisional leaders and employee surveys. We use their feedback to create and continually enhance programs that support their needs.

Through our volunteer program, Vornado Volunteers, employees are granted one day of paid time off per calendar year to volunteer for a cause of their choice.

Vornado is a diverse and inclusive environment that empowers the individual and enriches the employment experience. We have published Equal Employment Opportunity “EEO” data since 2017 and have a broadly diverse workforce across both our corporate base as well as our BMS division. Our employee demographics data can be found on our ESG micro-site (esg.vno.com), which is not incorporated by reference and should not be considered part of this Annual Report on Form 10-K.

Our diversity metrics set a baseline from where we constantly strive to improve.

As a building owner and landlord to thousands of business tenants, we focus on maintaining and improving the health of our indoor environments, as well as communicating the value of our health and wellness programs with consistency and clarity to our stakeholders. We believe that consistent health programming and communications protocols not only mitigate health risks within our buildings, but they also create a responsible behavior framework for our employees, our tenants, and our visitors.

We responded to the COVID-19 pandemic with determination to ensure that our tenants, employees and visitors remain healthy and safe. We fortified many of our buildings with protections that include daily health screenings and questionnaires, social distancing and PPE requirements, enhanced HVAC and indoor air quality, and installed onsite COVID-19 testing and vaccination locations. This infrastructure is further reinforced with our green cleaning program and our on-site operations team.

BMS employs and manages janitorial and security staff who are members of 32BJ SEIU and engineering staff who are members of Local 94 of the International Union of Operating Engineers AFL-CIO. Through our active participation in the Realty Advisory Board on Labor Relations, we work collaboratively with both unions and consider our relations with our union employees to be very positive.

For additional information on human capital matters, please see our most recent ESG report, available for download on our website at www.vno.com and in digital format at esg.vno.com. This report and other information on our website are not incorporated by reference into and do not form any part of this Annual Report on Form 10-K.

We compete with a large number of real estate investors, property owners and developers, some of which may be willing to accept lower returns on their investments. Principal factors of competition are rents charged, sales prices, attractiveness of location, the quality of the property and the breadth and the quality of services provided. Our success depends upon, among other factors, trends of the global, national, regional and local economies, the financial condition and operating results of current and prospective tenants and customers, availability and cost of capital, construction and renovation costs, taxes, governmental regulations, legislation, population and employment trends. See "Risk Factors" in Item 1A for additional information regarding these factors.

We operate in the following reportable segments: New York and Other. Financial information related to these reportable segments for the years ended December 31, 2021, 2020 and 2019 is set forth in Note 23 – Segment Information to our consolidated financial statements in this Annual Report on Form 10-K.

None of our tenants accounted for more than 10% of total revenues in any of the years ended December 31, 2021, 2020 and 2019.

We do not base our acquisitions and investments on specific allocations by type of property. We have historically held our properties for long‑term investment; however, it is possible that properties in our portfolio may be sold or otherwise disposed of when circumstances warrant. Further, we have not adopted a policy that limits the amount or percentage of assets which could be invested in a specific property or property type. Generally our activities are reviewed and may be modified from time to time by Vornado’s Board of Trustees without the vote of our shareholders or Operating Partnership unitholders.

Our principal executive offices are located at 888 Seventh Avenue, New York, New York 10019; telephone (212) 894‑7000.

Copies of our Annual Report on Form 10‑K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8‑K and amendments to those reports, as well as Reports on Forms 3, 4 and 5 regarding officers, trustees or 10% beneficial owners, filed or furnished pursuant to Section 13(a), 15(d) or 16(a) of the Securities Exchange Act of 1934 are available free of charge through our website (www.vno.com) as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission. Also available on our website are copies of our Audit Committee Charter, Compensation Committee Charter, Corporate Governance and Nominating Committee Charter, Code of Business Conduct and Ethics, and Corporate Governance Guidelines. In the event of any changes to these charters or the code or guidelines, changed copies will also be made available on our website. Copies of these documents are also available directly from us free of charge. Our website also includes other financial and non-financial information, including certain non-GAAP financial measures, none of which is a part of this Annual Report on Form 10-K. Copies of our filings under the Securities Exchange Act of 1934 are also available free of charge from us, upon request.