FREVS First Real Estate Investment Trust Of New Jersey

Management Discussion

• Real estate revenue for the three months ended January 31, 2020 (“Current Quarter”) increased 4.5% to $15,593,000, compared to $14,928,000 for the three months ended January 31, 2019 (“Prior Year’s Quarter”). The increase in revenue was primarily attributable to an increase in base rents across most properties and an increase in the average annual occupancy rate for the commercial space (office and retail) at the Rotunda property from an average occupancy rate of 81.2% in the Prior Year’s Quarter to 84.2% in the Current Quarter.
• Net (loss) income attributable to common equity (“net (loss) income-common equity”) for the Current Quarter was a net loss of $2,262,000 (($0.32) per share basic and diluted), compared to net income of $459,000 ($0.07 per share basic and diluted) for the Prior Year’s Quarter. The net loss was primarily driven by $3.4 million related to Special Committee expenses for advisory and legal fees incurred in Fiscal 2020; offset by an increase in revenue as explained above (consolidated impact of approximately $0.4 million); and a decrease in interest expense of approximately $0.4 million (consolidated impact of $0.3 million) driven by a decline in interest rates on the variable mortgage loans. (Refer to the segment disclosure below for a more detailed discussion of the financial performance of FREIT’s commercial and residential segments.)
• The condensed consolidated results of operations for the Current Quarter are not necessarily indicative of the results to be expected for the full year or any other period. The table above includes income from real estate operations which is a non-GAAP financial measure and is not a measure of operating results or cash flow as measured by GAAP, and is not necessarily indicative of cash available to fund cash needs.