Shearman & Sterling LLP
599 LEXINGTON AVENUE | NEW YORK | NY | 10022-6069
WWW.SHEARMAN.COM | T +1.212.848.4000 | F +1.212.848.7179
(212) 848-8244
October 26, 2005
BY EDGAR AND FEDERAL EXPRESS
Mr. Jorge Bonilla
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: Alexander's, Inc.
Form 10-K For the Fiscal Year Ended December 31, 2004
Form 10-Q For the Quarterly Period Ended March 31, 2005
Form 10-Q For the Quarterly Period Ended June 30, 2005
File No. 1-06064
Dear Mr. Bonilla:
We refer to your letter dated October 20, 2005 regarding a comment on the
above-referenced filings of Alexander's, Inc. (the "Company"). We have set forth
below the Company's response to the comment in your letter. For your
convenience, we have included your comment in full before our response.
On behalf of the Company, we advise you as follows:
Form 10-Q for the Quarterly Period Ended June 30, 2005
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Note 4 - 731 Lexington Avenue, page 8
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1. You state that you are recognizing the sales of the condominium units using
the percentage of completion method. We note on your balance sheet that you
have significant receivables arising from the sale of condominiums. Please
tell us how you considered these receivables in recognizing gain on these
sales and how you applied the criteria outlined in paragraph 37 of SFAS 66.
RESPONSE:
The Company notes for the information of the Staff that the
"receivables arising from the sale of condominiums" represent the
difference between the sales price on the 22 units under contract for
sale and the cash deposits received for those units. The Company has
recognized
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net gains on sale of condominiums in accordance with
paragraph 37 of SFAS 66, which states that if individual units in
condominiums projects are being sold separately, profit shall be
recognized using the percentage of completion method if all of the
following criteria are met:
(A) Construction is beyond a preliminary stage
o At June 30, 2005, approximately 92% of the project had been completed
and of the 105 condominium units, 77 had been sold and all proceeds
collected and 22 were under binding sales contracts.
(B) The buyer is committed to the extent of being unable to require a refund
except for non delivery of the unit
o All deposits are non-refundable unless there is a material change in
the condominium offering plan or in the event the Company is unable to
deliver the units within a reasonable period of time, as defined.
(C) Sufficient units have already been sold to assure that the entire property
will not revert to rental property
o Of the 105 condominium units, 77 had been sold and closed and 22 were
under binding sales contract at June 30, 2005.
(D) Sales prices are collectible
o The Company had assessed the collectibility of the sales prices of the
22 units under sales contract at June 30, 2005 in accordance with
paragraph 4 of SFAS 66 and notes for the information of the Staff that
the initial and continuing investments (non-refundable down payments
made by purchasers) received on the 22 condominiums that had not
closed as of June 30, 2005 were in excess of 25% of the purchase
prices, thus giving the buyers a substantial incentive to complete the
acquisition of the condominium units under binding sales contracts. In
addition, these individuals were of high credit standing further
mitigating any chance of default (these facts were similar for the 77
units previously sold and, in each case, the entire purchase price was
collected). The Company also notes for the information of the Staff
that as of September 30, 2005, the sales of 21 of the 22 units had
closed and the receivables relating to those 21 units have been
collected in full.
(E) Aggregate sale proceeds and costs can be reasonably estimated.
o At June 30, 2005, 92% of the project had been completed and
substantially all of the remaining project costs have been contracted
for.
****
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In connection with responding to your comment, the Company hereby acknowledges
that:
o the Company is responsible for the adequacy and accuracy of the
disclosure in the filings;
o staff comments or changes to disclosure in response to staff comments
do not foreclose the Commission from taking any action with respect to
the filings; and
o the Company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
If you have any additional comments or questions, please contact the undersigned
at (212) 848-8244 or Joseph Macnow, the Company's Chief Financial Officer, at
(201) 587-1000.
Very truly yours,
/s/ Danielle Carbone
Danielle Carbone
cc: Joseph Macnow -- Alexander's, Inc.
Alan Rice -- Alexander's, Inc.
Thomas Flinn -- SEC