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.

On January 20, 2015, we and one of the 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 (the “Co-Investment”). The purchase price for the 57% interest was approximately $95,000,000 (our share $39,000,000) which valued the property at approximately $480,000,000. The property is encumbered by a $310,000,000 mortgage loan bearing interest at LIBOR plus 2.80% which matures in December 2018 with a one-year extension option. Our aggregate ownership interest in the property increased to 33% from 11%. The Co-Investment is also accounted for under ASC 946 and is included as a component of “real estate fund investments” on our consolidated balance sheet.

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.

At September 30, 2015, we had six real estate fund investments with an aggregate fair value of $555,414,000, or $190,620,000 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 and nine months ended September 30, 2015 and 2014.

(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 ⁽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.