VORNADO REALTY TRUST 6 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (1) Most leases include periodic step-ups in rent, which are not reflected in the initial rent per square foot leased. Overview—Leasing Activity As of December 31, 2002 Office Merchandise Mart Temperature  Controlled  (SQUARE FEET AND CUBIC FEET IN THOUSANDS) New York City CESCR Retail Office Showroom Logistics Square feet/cubic feet 13,957 13,395 12,528 2,838 5,528 17,509/441,500 Number of properties 21 53 62 9 9 88 Occupancy rate 95.8% 93.6% 88.3% 91.7% 95.2% 78.5% Leasing Activity: Year Ended December 31, 2002: Square feet 579 2,342 1,960 164 911 — Initial rent  (1) $ 44.82 $ 31.01 $ 9.73 $26.97 $18.99 — Rent per square foot on relet space: Square feet 457 2,025 1,339 164 911 — Initial rent  (1) $ 44.34 $ 31.29 $ 12.17 $26.97 $18.99 — Prior escalated rent $ 34.11 $ 29.66 $ 9.19 $26.66 $18.63 — Percentage increase 30.0% 5.5% 32.4% 1.2% 2.0% — Rent per square foot on space previously vacant: Square feet 122 317 621 — — — Initial rent (1) $ 46.80 $ 29.21 $ 4.48 — — — Tenant improvements per square foot $ 12.18 $ 14.23 $ 1.18 $ 5.03 $ 1.38 — Leasing commissions per square foot $ 7.48 $ 3.39 $ 0.18 $ 4.04 — —