VORNADO REALTY TRUST 62 NOTES TO CONSOLIDATED FINANCIAL STA TEMENTS GAINS ON SALES OF REAL ESTATE (DISCONTINUED OPERATIONS IN 2003): On November 3, 2003, the Company sold its Hagerstown, Maryland shopping center property for $3,100,000, which resulted in a net gain on sale after closing costs of $1,945,000. On October 10, 2003, the Company sold Two Park Avenue, a 965,000 square foot office building, for $292,000,000 to SEB Immobilien-Investment GmbH, a German capital investment company , which resulted in a net gain on the sale after closing costs of $156,433,000. On January 9, 2003, the Company sold its Baltimore, Maryland shopping center for $4,752,000, which resulted in a net gain on the sale after closing costs of $2,644,000. On August 6, 2001, the Company sold its leasehold interest in 550/600 Mamaroneck Avenue for $22,500,000, which approximated book value. On May 17, 2001, the Company sold its 50% interest in 570 Lexington Avenue for $60,000,000, which resulted in a net gain on sale after closing costs of $12,445,000. In September 1998, Atlantic City condemned the Company’s property . In the third quarter of 1998, the Company recorded a gain of $1,694,000, which reflected the condemnation awar of $3,100,000, net of the carrying value of the property of $1,406,000. The Company appealed the amount and on June 27, 2001, was awarded an additional $3,050,000. Net gains (losses) on disposition of wholly-owned and partially-owned assets other than depreciable real estate: On February 2, 2004, the Palisades Ventur in which the Company owns a 75% interest entered into an agreement to sell its only asset, a 538 unit high-rise residential apartment tower in Fort Lee, New Jersey, for $222,500,000. On February 27, 2004, the Company acquired the remaining 25% interest it did not previously own for approximately $17,000,000. The Company’s gain on sale after closing costs will be approximately $70,000,000. The sale, which is subject to customary closing conditions, is expected to be completed by the third quarter of 2004.  For the Years Ended December 31, On September 28, 2000, the Company made a $62,000,000 loan to Primestone Investment Partners, L.P. (“Primestone”). The Company received a 1% up-front fee and was entitled to receive certain other fees aggregating approximately 3% upon repay- ment of the loan. The loan bore interest at 16% per annum. Primestone defaulted on the repayment of this loan on October 25, 2001. The loan was subordinate to $37,957,000 of other debt of the borr ower that liened the Company’s collateral. On October 31, 2001, the Company purchased the other debt for its face amount. The loans were secured by 7,944,893 partnership units in Prime Group Realty, L.P., the operating partnership of Prime Group Realty Trust (NYSE:PGE) and the partnership units are exchangeable for the same number of common shares of PGE. The loans are also guaranteed by affiliates of Primestone. PRIMESTONE SETTLEMENT OF GUARANTEES (2003) AND FORECLOSURE AND IMP AIRMENT LOSSES (2002) (AMOUNTS IN THOUSANDS) 2003 2002 2001 Wholly-owned: Primestone loss on settlement of guarantees (2003) and  foreclosure and impairment losses (2002) $(1,388) $(35,757) $ — Net gain on sale of marketable securities 2,950 12,346 — Gains on sale of land parcels 499 — — Gain on sale of condominium units 188 2,156 — Gain on transfer of mortgages — 2,096 — Net gain on sale of air rights  — 1,688 — Write-off of investments in technology companies — — (16,513) Partially-owned: After-tax net gain on sale of Park Laurel condominium units 94 — 15,657 Write-off of net investment in the Russian Tea Room (“RTR”) — — (7,374) Other — — 160 Net gain (loss) on disposition of wholly-owned and partially-owned  assets other than depreciable real estate $ 2,343 $(17,471) $ (8,070)