Real Estate Fund Investments

We are the general partner and investment manager of Vornado Capital Partners Real Estate Fund (the “Fund”) and own a 25.0% interest in the Fund. On January 29, 2018, by unanimous consent of the Fund's limited partners, the Fund's term was extended to February 2023. The Fund had 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 the Crowne Plaza Times Square Hotel Joint Venture (the “Crowne Plaza Joint Venture”) and own a 57.1% interest in the joint venture which owns the 24.7% interest in the Crowne Plaza Times Square Hotel not owned by the Fund. The Crowne Plaza Joint Venture is also accounted for under ASC 946 and we consolidate the accounts of the joint venture into our consolidated financial statements, retaining the fair value basis of accounting.

At December 31, 2017, we had five real estate fund investments through the Fund and the Crowne Plaza Joint Venture with an aggregate fair value of $354,804,000, or $98,189,000 in excess of cost, and had remaining unfunded commitments of $117,872,000, of which our share was $34,502,000. At December 31, 2016, we had six real estate fund investments with an aggregate fair value of $462,132,000.

Below is a summary of (loss) income from the Fund and the Crowne Plaza Joint Venture for the years ended December 31, 2017, 2016 and 2015.



(Amounts in thousands)	For the Year Ended December 31,
	2017			2016			2015
Net investment income	$	18,507		$	17,053		$	16,329
Net realized gains on exited investments	36,078			14,761			26,036
Previously recorded unrealized gain on exited investments	(25,538		)	(14,254		)	(23,279		)
Net unrealized (loss) gain on held investments	(25,807		)	(41,162		)	54,995
Income (loss) from real estate fund investments	3,240			(23,602		)	74,081
Less (income) loss attributable to noncontrolling interests in consolidated subsidiaries	(14,044		)	2,560			(40,117		)
(Loss) income from real estate fund investments attributable to the Operating Partnership⁽¹⁾	(10,804		)	(21,042		)	33,964
Less loss (income) attributable to noncontrolling interests in the Operating Partnership	673			1,270			(2,011		)
(Loss) income from real estate fund investments attributable to Vornado	$	(10,131	)	$	(19,772	)	$	31,953

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(1)	Excludes $4,091, $3,831, and $2,939 of management and leasing fees in the years ended December 31, 2017, 2016 and 2015, respectively, which are included as a component of "fee and other income" on our consolidated statements of income.

On September 29, 2017, the Fund completed the sale of 800 Corporate Pointe in Culver City, CA for $148,000,000. From the inception of this investment through its disposition, the Fund realized a $35,620,000 net gain.

On July 27, 2017, the Fund completed a $100,000,000 loan facility for the refinancing of 1100 Lincoln Road, a 130,000 square foot retail and theater property in Miami, Florida. The loan is interest-only at LIBOR plus 2.40% (3.76% at December 31, 2017), matures in July 2020 with two one-year extension options. At closing, the fund drew $82,750,000, and subject to property performance, may borrow up to $17,250,000 of additional proceeds within the first 18 months of the loan term. The property was previously encumbered by a $66,000,000 interest-only mortgage at LIBOR plus 2.25% which was scheduled to mature in August 2017.

On March 25, 2015, the Fund completed the 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.