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EXHIBIT 8.2
December 20, 1996
Vornado Realty Trust
Park 80 West, Plaza II
Saddle Brook, NJ 07663
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Alexander's REIT Election
Dear Sirs:
You have requested our opinion in connection with the election by
Alexander's, Inc. ("Alexander's") to be treated for Federal income tax purposes
as a real estate investment trust (a "REIT"), within the meaning of section
856(a) of the Internal Revenue Code of 1986, as amended (the "Code"). We
understand that Alexander's has elected to be treated as a REIT initially for
its taxable year ended December 31, 1995, and intends to continue to be so
treated for subsequent taxable years.
In rendering this opinion, we have relied upon statements and
information contained in Alexander's letter to us, dated the date hereof and
delivered in connection with this opinion, and in the Exhibits to such letter
(such letter and Exhibits hereinafter referred to as the "Representation
Letter"). We have assumed that the statements made in the Representation
Letter are true and correct and that the Representation Letter has been
executed by appropriate and authorized officers of Alexander's.
In rendering this opinion, with your permission we have also made the
following assumptions:
(a) Alexander's has made a valid election to be taxed as a REIT
for its taxable year ended December 31, 1995, which election has not
been, and will not be, revoked or terminated.
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(b) Since January 1, 1995, the outstanding shares of Alexander's
haven been held by at least 100 or more persons, and such shares will
continue to be held by 100 or more persons.
(c) Not more than 50 percent in value of the outstanding shares of
Alexander's have been or will be owned directly or indirectly, actually
or constructively (within the meaning of section 542(a)(2) of the Code,
as modified by section 856(h) of the Code) by five or fewer individuals
(or entities treated as individuals for purposes of section 856(h) of the
Code), during the second half of every taxable year following the taxable
year ended December 31, 1995.
(d) Alexander's will not receive or accrue (and since January 1,
1995, has not received or accrued) any amount from (i) any corporation in
which it owns (or since July 1, 1994, has owned) 10 percent or more of the
total combined voting power of all shares of stock entitled to vote or 10
percent or more of the total number of shares of all classes of stock of
such corporation, or (ii) any unincorporated entity in which it owns (or
since July 1, 1994, has owned) an interest of 10 percent or more in the
assets or net profits of such person. For purposes of this assumption,
ownership is determined in accordance with section 856(d)(5) of the Code.
(e) Alexander's has requested and maintained, and will continue to
request and maintain, records concerning ownership of its outstanding
shares in accordance with section 857(a)(2) of the Code and section
1.857-8 of the Treasury Regulations.
(f) Alexander's has made and will make distributions to its
stockholders sufficient to meet the 95 percent distribution requirements
of section 857(a)(1) of the Code for the taxable year for which the REIT
election was made and every subsequent taxable year.
(g) For its taxable year ended December 31, 1995, Alexander's had
a deficit in earnings and profits (as defined in the Code) in excess of
its accumulated earnings and profits (if any) as of the close of its
taxable year ended December 31, 1994.
Based on the foregoing and in reliance thereon and subject thereto and
on an analysis of the Code, Treasury Regulations thereunder, judicial authority
and current administrative rulings and such other laws and facts as we have
deemed relevant and necessary, we are of the opinion that Alexander's has been
organized and operated in conformity with the requirements for qualification as
a REIT under the Code, and its proposed method of operation will enable it to
continue to meet the requirements for qualification and taxation as a REIT.
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Qualification of Alexander's as a REIT will depend upon the
satisfaction by Alexander's and its subsidiaries (the "Company"), through
actual operating results, distribution levels, diversity of stock ownership and
otherwise, of the applicable asset composition, source of income, shareholder
diversification, distribution, recordkeeping and other requirements of the Code
necessary for a corporation to qualify as a REIT. No assurance can be given
that the actual results of the Company's operations for any one taxable year
will satisfy all such requirements. We do not undertake to monitor whether the
Company will actually satisfy the various qualification tests, and we express
no opinion whether the Company actually will satisfy these various
qualification tests in the future.
This opinion is based on current Federal income tax law, and we do not
undertake to advise you as to future changes in Federal income tax law that may
affect this opinion unless we are specifically engaged to do so. This opinion
relates solely to Federal income tax law, and we do not undertake to render any
opinion as to the taxation of the Company under any state or local corporate
franchise or income tax law. Furthermore, this opinion is rendered solely for
your benefit and is not to be relied upon by any other person without our prior
written consent.
We hereby consent to (i) the use of our name and the making of
statements with respect to us as set forth under the heading of "Certain
Federal Income Tax Considerations" in the Prospectus Supplement of Vornado
Realty Trust dated December 18, 1996 and (ii) the incorporation by reference
of this opinion into Registration Statement No. 33-52441 and into Registration
Statement No. 33-62395. In giving such consent, we do not thereby admit that
we are within the category of persons whose consent is required under Section 7
of the Securities Act of 1933, as amended.
Very truly yours,
Shearman & Sterling