Acquisitions

Our external growth has never been programmed, formulaic or linear, i.e., we do not budget acquisition activity. Each year, we mine our deal flow for opportunities and,

as such, our acquisition volume is lumpy. Here is a ten-year schedule of acquisitions:

Since last year's letter, in an extraordinarily competitive acquisitions market, Mike, Michelle Felman, Executive Vice President -Acquisitions, and her 45th floor colleagues, working with business heads David Greenbaum, Sandeep Mathrani, Mitchell Schear and Chris Kennedy, have made some great acquisitions. They are scheduled in Appendix I. Several deserve special mention:

Springfield Mall: A 1.4 million square foot southeast Washington fixer-upper which we will totally re-tenant, redevelop and expand to mixed-use, which we expect will contain up to 4 million square feet (of which 2.7 million square feet is currently allowable).

1540 Broadway Retail: The famous Virgin block front in Times Square, certainly the best retail in Times Square, maybe in New York and perhaps in the nation. Here we own all the retail stores and, importantly, all the signage.

350 Park Avenue: The 538,000 square foot office building on the 51st to 52nd Street block front. Here, in place rents are $57 a square foot, about half market.

Manhattan Mall: An addition to our already dominant holdings in the Penn Plaza district, this asset contains 812,000 square feet of office, 164,000 square feet of retail and 250,000 square feet of air rights. It is contiguous to our Hotel Penn site. We acquired this asset on January 10, 2007. JCPenney announced days ago that they will locate a 145,000 square foot store here, their first ever in Manhattan.

Project America: A 70% interest in the 2,000,000 square foot 1290 Avenue of the Americas building and the 1,800,000 square foot Bank of America building in San Francisco. Current rents at 1290 are $55 per square foot.