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Alexander’s,
Inc.
210 Route
4 East
Paramus,
NJ 07652
In
connection with the filing by Alexander’s, Inc. (“Alexander’s”), on November 26,
2008, of a registration statement on Form S-3 (the “Registration Statement”)
with the Securities and Exchange Commission (the “Commission”) relating to the
offering from time to time, pursuant to Rule 415 of the Securities Act of 1933,
as amended (the “Securities Act”), of (i) debt securities of Alexander’s, (ii)
warrants to purchase debt securities of Alexander’s, (iii) shares of preferred
stock of Alexander’s, par value $1.00 per share, (iv) shares of preferred stock
of Alexander’s represented by depositary receipts and (v) shares of common stock
of Alexander’s, par value $1.00 per share (the “Registration”), you have
requested our opinion with regard to the election by 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 as to certain factual matters upon the
statements and representations contained in the certificate provided to us by
Alexander’s (the “Alexander’s Certificate”) dated November 26,
2008. We have assumed that the statements made in the Alexander’s
Certificate are true and correct and that the Alexander’s Certificate has been
executed by appropriate and authorized officers of Alexander’s.
In
rendering this opinion, with your permission we also have made the following
assumptions, which are based on factual representations made by Alexander’s and
certified to us:
(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.
2
(b) Since
January 1, 1995, the outstanding shares of Alexander’s have 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
and its subsidiaries (the “Company”) will not receive or accrue (and since
January 1, 1995, has not received or accrued) any amount that would constitute
“rents from real property” (within the meaning of section 856(d)(1) of the Code
without regard to section 856(d)(2)(B) of the Code) from (i) any corporation in
which it owns (or since July 1, 1994, has owned) (a) 10 percent or more of the
total combined voting power of all shares of stock entitled to vote, (b) 10
percent or more of the total number of shares of all classes of stock of such
corporation or (c) 10 percent or more of the total value of shares of all
classes of stock, 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, in each case, except for such rents that do not
materially adversely affect Alexander’s ability to satisfy the relevant REIT
income tests set forth in Section 856(c)(2) and Section 856(c)(3) of the
Code. 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(f)(1) of the Code and Treasury Regulations promulgated thereunder and
predecessor requirements.
(f) Alexander’s
has made and will make distributions to its stockholders sufficient to meet the
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 commencing with its taxable year ended
December 31, 1995, Alexander’s has been organized and operated in conformity
with the requirements for qualification and taxation 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 under the
Code.
3
Qualification
of Alexander’s as a REIT will depend upon the satisfaction by 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 actually has satisfied or actually will
satisfy the various qualification tests, and we express no opinion whether the
Company actually has satisfied or actually will satisfy these various
qualification tests.
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.
We hereby
consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of our name in the prospectus contained in the
Registration Statement under the caption “Certain Federal Income Tax
Considerations.” In giving this consent, we do not hereby admit that we are in
the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Commission promulgated
thereunder.
Very
truly yours,
/s/ Shearman & Sterling LLP
/s/ Shearman & Sterling LLP
RJB/AGL
DJL