UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended ~~April 30,~~July 31, 2022
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from __________________ to ____________________
	Commission File No. 000-25043

FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY, INC.
(Exact name of registrant as specified in its charter)
Maryland	22-1697095
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
505 Main Street, Hackensack, New Jersey	07601
(Address of principal executive offices)	(Zip Code)
~~201-488-6400~~201-488-6400
(~~Registrant's~~Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

	Title of each class		Trading Symbol(s)		Name of each exchange on which registered
	Common stock, par value $0.01 per share		FREVS		OTC Pink Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ☐	Accelerated Filer ☐	Non-Accelerated Filer ☒	Smaller Reporting Company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~June~~September 14, 2022, the number of shares of common stock outstanding was ~~6,863,744.~~6,863,744.

Page 2

FIRST REAL ESTATE

INVESTMENT TRUST OF NEW JERSEY, INC.

INDEX



Part I:Financial Information	Page
Item 1:Unaudited Condensed Consolidated Financial Statements
a.)Condensed Consolidated Balance Sheets as of ~~April 30,~~July 31, 2022 and October 31, 2021;	3
b.)Condensed Consolidated Statements of ~~Operations~~Income for the ~~Six~~Nine and Three Months Ended July 31, ~~April 30,~~ 2022 and 2021;	4
c.)Condensed Consolidated Statements of Comprehensive Income for the ~~Six~~Nine and Three Months Ended ~~April 30,~~July 31, 2022 and 2021;	5
d.)Condensed Consolidated Statements of Equity for the ~~Six~~Nine and Three Months Ended ~~April 30,~~July 31, 2022 and 2021;	66-7
e.)Condensed Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~April 30,~~July 31, 2022 and 2021;	8
f.)Notes to Condensed Consolidated Financial Statements.	9


Item 2:Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3:Quantitative and Qualitative Disclosures About Market Risk	3433

Item 4:Controls and Procedures	3433


Part II:Other Information

Item 1:Legal Proceedings	3534

Item 1A:Risk Factors	3635

Item 6:Exhibits	3635

Signatures	3635

Index

Page 3

Part I: Financial Information

Item 1: Unaudited Condensed Consolidated Financial Statements

FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	April 30, 2022			October 31, 2021			July 31, 2022			October 31, 2021
	(In Thousands, Except Share and Per Share Amounts)						(In Thousands, Except Share and Per Share Amounts)
ASSETS

Real estate, at cost, net of accumulated depreciation	$	96,513		$	270,634		$	95,986		$	270,634
Construction in progress		678			665			687			665
Cash and cash equivalents		95,748			35,891			98,307			35,891
Investment in tenancy-in-common		18,870			19,383			18,927			19,383
Tenants’ security accounts		1,030			1,340
Tenants' security accounts								1,038			1,340
Receivables arising from straight-lining of rents		711			3,747			747			3,747
Accounts receivable, net of allowance for doubtful accounts of $1,260 and $966 as of April 30, 2022 and October 31, 2021, respectively		736			1,622
Accounts receivable, net of allowance for doubtful accounts of $1,148 and $966 as of July 31, 2022 and October 31, 2021, respectively								571			1,622
Secured loans receivable (related party)		222			5,292			-			5,292
Funds held in post-closing escrow		6,251			0-			6,251			-
Prepaid expenses and other assets		2,710			5,493			3,960			5,493
Deferred charges, net		204			2,038			213			2,038
Interest rate swap contracts		1,493			0-
Interest rate swap contract								116			-
Total Assets	$	225,166		$	346,105		$	226,803		$	346,105


LIABILITIES AND EQUITY

Liabilities:
Mortgages payable, including deferred interest of $358 as of April 30, 2022 and October 31, 2021	$	137,190		$	301,276
Mortgages payable, including deferred interest of $222 and $358 as of July 31, 2022 and October 31, 2021, respectively							$	139,604		$	301,276
Less unamortized debt issuance costs		1,132			1,400			1,304			1,400
Mortgages payable, net		136,058			299,876			138,300			299,876

Due to affiliate		0-			3,252			-			3,252
Deferred director compensation payable		2,317			2,475			2,317			2,475
Accounts payable and accrued expenses		1,613			2,375			1,534			2,375
Dividends payable		686			686			-			686
Tenants’ security deposits		1,303			2,039
Tenants' security deposits								1,294			2,039
Deferred revenue		462			1,143			373			1,143
Interest rate cap and swap contracts		0-			2,308			16			2,308
Total Liabilities		142,439			314,154			143,834			314,154

Commitments and contingencies


Common Equity:
Preferred stock with par value of $0.01 per share:
5,000,000 and 0 shares authorized and issued at April 30, 2022 and October 31, 2021, respectively		0-			0-
Common stock with par value of $0.01 per share:
20,000,000 shares authorized at April 30, 2022 and October 31, 2021; 6,863,744 and 6,860,048 shares issued plus 176,307 and 175,923 vested share units granted to Directors at April 30, 2022 and October 31, 2021, respectively		71			71
Preferred stock with par value of $0.01 per share:
5,000,000 and 0 shares authorized and issued, respectively, at July 31, 2022 and October 31, 2021								-			-
Common stock with par value of $0.01 per share:
20,000,000 shares authorized at July 31, 2022 and October 31, 2021; 6,863,744 and 6,860,048 shares issued plus 177,390 and 175,923 vested share units granted to Directors at July 31, 2022 and October 31, 2021, respectively								71			71
Additional paid-in-capital		25,666			25,556			25,697			25,556
Retained earnings		56,981			12,963			58,102			12,963
Accumulated other comprehensive income (loss)		769			(2,017	)		99			(2,017	)
Total Common Equity		83,487			36,573			83,969			36,573
Noncontrolling interests in subsidiaries		(760	)		(4,622	)		(1,000	)		(4,622	)
Total Equity		82,727			31,951			82,969			31,951
Total Liabilities and Equity	$	225,166		$	346,105		$	226,803		$	346,105


	Six Months Ended April 30,						Three Months Ended April 30,						Nine Months Ended July 31,						Three Months Ended July 31,
	2022			2021			2022			2021			2022			2021			2022			2021
	(In Thousands Except Per Share Amounts)						(In Thousands Except Per Share Amounts)						(In Thousands Except Per Share Amounts)						(In Thousands Except Per Share Amounts)
Revenue:
Rental income	$	15,778		$	21,915		$	6,015		$	11,065		$	22,095		$	32,871		$	6,317		$	10,956
Reimbursements		1,255			3,197			498			1,653			1,813			4,667			558			1,470
Sundry income		231			446			102			86			315			562			84			116
Total revenue		17,264			25,558			6,615			12,804			24,223			38,100			6,959			12,542

Expenses:
Operating expenses		6,696			8,885			2,403			4,777			9,185			13,078			2,489			4,193
Management fees		811			1,087			314			561			1,129			1,625			318			538
Real estate taxes		3,295			3,959			1,432			2,042			4,727			6,018			1,432			2,059
Depreciation		2,534			4,633			714			2,338			3,257			6,948			723			2,315
Total expenses		13,336			18,564			4,863			9,718			18,298			27,669			4,962			9,105

Operating income		3,928			6,994			1,752			3,086			5,925			10,431			1,997			3,437

Investment income		64			59			38			29			183			88			119			29
Loss on investment in tenancy-in-common		(156	)		(145	)		(32	)		(118	)
Net gain (loss) on sale of Maryland properties		68,771			0-			(1,232	)		0-
(Loss) Gain on investment in tenancy-in-common														(99	)		(245	)		57			(100	)
Net gain on sale of Maryland properties														68,771			-			-			-
Net realized gain on Wayne PSC interest rate swap termination														1,415			-			1,415			-
Interest expense including amortization of deferred financing costs		(4,455	)		(6,192	)		(1,527	)		(3,060	)		(6,229	)		(9,242	)		(1,774	)		(3,050	)
Net income (loss)		68,152			716			(1,001	)		(63	)
Net income														69,966			1,032			1,814			316

Net (income) loss attributable to noncontrolling interests in subsidiaries		(22,727	)		(149	)		649			72
Net income (loss) attributable to common equity	$	45,425		$	567		$	(352	)	$	9
Net income attributable to noncontrolling interests in subsidiaries														(23,420	)		(256	)		(693	)		(107	)
Net income attributable to common equity													$	46,546		$	776		$	1,121		$	209

Earnings (Loss) per share:
Earnings per share:
Basic	$	6.46		$	0.08		$	(0.05	)	$	0.00		$	6.61		$	0.11		$	0.16		$	0.03
Diluted	$	6.40		$	0.08		$	(0.05	)	$	0.00		$	6.56		$	0.11		$	0.16		$	0.03

Weighted average shares outstanding:
Basic		7,037			7,012			7,038			7,016			7,038			7,016			7,040			7,022
Diluted		7,108			7,012			7,038			7,018			7,110			7,018			7,114			7,026

Six Months Ended April 30,
Three Months Ended April 30,
2022
2021
2022
2021
(In Thousands of Dollars)
(In Thousands of Dollars)

Net income (loss)
$
68,152
$
716
$
(1,001
)
$
(63
)

Other comprehensive income:
Unrealized gain on interest rate cap and swap contracts before reclassifications
3,081
1,052
2,325
863
Amount reclassified from accumulated other comprehensive income to interest expense
720
623
214
314
Net unrealized gain on interest rate cap and swap contracts
3,801
1,675
2,539
1,177
Comprehensive income
71,953
2,391
1,538
1,114

Net (income) loss attributable to noncontrolling interests in subsidiaries
(22,727
)
(149
)
649
72
Other comprehensive income:
Unrealized gain on interest rate cap and swap contracts attributable to noncontrolling interests in subsidiaries
(1,015
)
(431
)
(681
)
(320
)
Comprehensive income attributable to noncontrolling interests in subsidiaries
(23,742
)
(580
)
(32
)
(248
)

Comprehensive income attributable to common equity
$
48,211
$
1,811
$
1,506

$
866

	Nine Months Ended July 31,						Three Months Ended July 31,
	2022			2021			2022			2021
	(In Thousands of Dollars)						(In Thousands of Dollars)

Net income	$	69,966		$	1,032		$	1,814		$	316

Other comprehensive income:
Unrealized gain (loss) on interest rate cap and swap contracts before reclassifications		2,994			501			(87	)		(551	)
Amount reclassified from accumulated other comprehensive income to realized gain on termination of interest rate swap		(1,415	)		-			(1,415	)		-
Amount reclassified from accumulated other comprehensive income to interest expense		829			940			109			317
Net unrealized gain (loss) on interest rate cap and swap contracts		2,408			1,441			(1,393	)		(234	)
Comprehensive income		72,374			2,473			421			82

Net income attributable to noncontrolling interests in subsidiaries		(23,420	)		(256	)		(693	)		(107	)
Other comprehensive (income) loss:
Unrealized (gain) loss on interest rate cap and swap contracts attributable to noncontrolling interests in subsidiaries		(292	)		(340	)		723			91
Comprehensive (income) loss attributable to noncontrolling interests in subsidiaries		(23,712	)		(596	)		30			(16	)

Comprehensive income attributable to common equity	$	48,662		$	1,877		$	451		$	66

																						Common Equity
																						Common Stock									Accumulated
	Common Equity																									Additional					Other			Total			Noncontrolling
	Common Stock				Additional Paid-In-		Retained			Accumulated Other Comprehensive			Total Common			Noncontrolling Interests in			Total							Paid-In-		Retained			Comprehensive			Common			Interests in
	Shares		Amount		Capital		Earnings			(Loss) Income			Equity			Subsidiaries			Equity			Shares		Amount		Captital		Earnings			(Loss) Income			Equity			Subsidiaries			Total Equity
	(In Thousands of Dollars, Except Per Share Amounts)																					(In Thousands of Dollars, Except Per Share Amounts)

Balance at October 31, 2021		7,036	$	71	$	25,556	$	12,963		$	(2,017	)	$	36,573		$	(4,622	)	$	31,951			7,036	$	71	$	25,556	$	12,963		$	(2,017	)	$	36,573		$	(4,622	)	$	31,951

Stock based compensation expense						5								5						5							5								5						5

Vested share units granted to Directors, including $17 in dividends declared payable in share units ($0.10 per share)		2				61								61						61			2				61								61						61

Distributions to noncontrolling interests in subsidiaries														0-			(19,700	)		(19,700	)														-			(19,700	)		(19,700	)

Net income								45,777						45,777			23,376			69,153									45,777						45,777			23,376			69,153

Dividends declared, including $17 payable in share units ($0.10 per share)								(703	)					(703	)					(703	)								(703	)					(703	)					(703	)

Net unrealized gain on interest rate swap contracts											928			928			334			1,262												928			928			334			1,262

Balance at January 31, 2022		7,038		71		25,622		58,037			(1,089	)		82,641			(612	)		82,029			7,038		71		25,622		58,037			(1,089	)		82,641			(612	)		82,029

Stock based compensation expense						5								5						5							5								5						5

Vested share units granted to Directors, including $18 in dividends declared payable in share units ($0.10 per share)		2				39								39						39			2				39								39						39

Distributions to noncontrolling interests in subsidiaries														0-			(180	)		(180	)														-			(180	)		(180	)

Net loss								(352	)					(352	)		(649	)		(1,001	)								(352	)					(352	)		(649	)		(1,001	)

Dividends declared, including $18 payable in share units ($0.10 per share)								(704	)					(704	)					(704	)								(704	)					(704	)					(704	)

Net unrealized gain on interest rate swap contracts											1,858			1,858			681			2,539												1,858			1,858			681			2,539

Balance at April 30, 2022		7,040	$	71	$	25,666	$	56,981		$	769		$	83,487		$	(760	)	$	82,727			7,040		71		25,666		56,981			769			83,487			(760	)		82,727

Stock based compensation expense																											5								5						5

Vested share units granted to Directors																							1				26								26						26

Distributions to noncontrolling interests in subsidiaries																																			-			(210	)		(210	)

Net income																													1,121						1,121			693			1,814

Net unrealized loss on interest rate swap contracts																																(670	)		(670	)		(723	)		(1,393	)

Balance at July 31, 2022																							7,041	$	71	$	25,697	$	58,102		$	99		$	83,969		$	(1,000	)	$	82,969

	Common Equity																											Common Equity
	Beneficial Interest						Treasury Shares at Cost						Retained			Accumulated Other Comprehensive			Total Common			Noncontrolling Interests in			Total			Beneficial Interest						Treasury Shares at Cost					Common Stock				Additional Paid-In-		Retained			Accumulated Other Comprehensive			Total Common			Noncontrolling Interests			Total
	Shares			Amount			Shares			Amount			Earnings			Loss			Equity			Subsidiaries			Equity			Shares			Amount			Shares			Amount		Shares		Amount		Capital		Earnings			Loss			Equity			Subsidiaries			Equity
	(In Thousands of Dollars, Except Per Share Amounts)																											(In Thousands, Except Per Share Amounts)

Balance at October 31, 2020		7,145		$	27,960			137		$	(2,863	)	$	13,791		$	(3,986	)	$	34,902		$	(4,039	)	$	30,863			7,145		$	27,960		137		$	(2,863	)	-	$	-	$	-	$	13,791		$	(3,986	)	$	34,902		$	(4,039	)	$	30,863

Stock based compensation expense					12															12						12						12																			12						12

Vested share units granted to Directors, including $8 in dividends declared payable in share units ($0.05 per share)		7			118															118						118
Vested share units granted to Directors, including $8 in dividends declared payable in share units ($0.05 per share)																													7			118																			118						118

Net income														558						558			221			779																			558						558			221			779

Dividends declared, including $8 payable in share units ($0.05 per share)														(350	)					(350	)					(350	)
Dividends declared, including $8 payable in share units ($0.05 per share)																																													(350	)					(350	)					(350	)

Net unrealized gain on interest rate cap and swap contracts																	387			387			111			498																						387			387			111			498

Balance at January 31, 2021		7,152			28,090			137			(2,863	)		13,999			(3,599	)		35,627			(3,707	)		31,920			7,152			28,090		137			(2,863	)	-		-		-		13,999			(3,599	)		35,627			(3,707	)		31,920

Stock based compensation expense					12															12						12						12																			12						12

Vested share units granted to Directors, including $8 in dividends declared payable in share units ($0.05 per share)		7			113															113						113
Vested share units granted to Directors, including $8 in dividends declared payable in share units ($0.05 per share)																													7			113																			113						113

Vested share units issued to retired Director*		(4	)		(72	)		(4	)	$	72									0-						0-			(4	)		(72	)	(4	)		72														-						-

Distributions to noncontrolling interests																				-			(510	)		(510	)																								-			(510	)		(510	)

Net income (loss)														9						9			(72	)		(63	)																		9						9			(72	)		(63	)

Dividends declared, including $8 payable in share units ($0.05 per share)														(350	)					(350	)					(350	)
Dividends declared, including $8 payable in share units ($0.05 per share)																																													(350	)					(350	)					(350	)

Net unrealized gain on interest rate cap and swap contracts																	857			857			320			1,177																						857			857			320			1,177

Balance at April 30, 2021		7,155		$	28,143			133		$	(2,791	)	$	13,658		$	(2,742	)	$	36,268		$	(3,969	)	$	32,299			7,155			28,143		133			(2,791	)	-		-		-		13,658			(2,742	)		36,268			(3,969	)		32,299

Stock based compensation expense																																7											4								11						11

Vested share units granted to Directors, including $8 in dividends declared payable in share units ($0.05 per share)																																							7		1		124								125						125

Distributions to noncontrolling interests																																																			-			(450	)		(450	)

Net income																																													209						209			107			316

Dividends declared, including $8 payable in share units ($0.05 per share)																																													(351	)					(351	)					(351	)

Reincorporation of First Real Estate Investment Trust of New Jersey with and into FREIT (See Note 1)																													(7,155	)		(28,150	)	(133	)		2,791		7,022		70		25,289								-						-

Net unrealized loss on interest rate cap and swap contracts																																																(143	)		(143	)		(91	)		(234	)

Balance at July 31, 2021																													-		$	-		-		$	-		7,029	$	71	$	25,417	$	13,516		$	(2,885	)	$	36,119		$	(4,403	)	$	31,716

* Represents the issuance of treasury shares to retired Director for share units earned.

		Six Months Ended							Nine Months Ended
		April 30,							July 31,
		2022			2021				2022			2021
		(In Thousands of Dollars)							(In Thousands of Dollars)
Operating activities:
Net income		$	68,152		$	716			$	69,966		$	1,032
Adjustments to reconcile net income to net cash provided by operating activities:
Net gain on sale of Maryland properties			(68,771	)		0-				(68,771	)		-
Depreciation			2,534			4,633				3,257			6,948
Amortization			602			800				920			1,201
Stock based compensation expense			10			24				15			35
Director fees and related interest paid in stock units			65			215				91			332
Loss on investment in tenancy-in-common			156			145				99			245
Deferred rents - straight line rent			61			213				25			225
Deferred real estate tax appeal fees			35			35				35			192
Bad debt expense			377			295				363			264
Changes in operating assets and liabilities:
Tenants' security accounts			(736	)		(41	)			(745	)		(84	)
Accounts receivable, prepaid expenses and other assets			2,377			1,565				2,420			(402	)
Accounts payable, accrued expenses and deferred director compensation payable			(1,214	)		223				(925	)		249
Deferred revenue			(681	)		(135	)			(770	)		(148	)
Due to affiliate - accrued interest			(47	)		84				(47	)		108
Deferred interest on mortgages			0-			(2	)			(136	)		(2	)
Net cash provided by operating activities			2,920			8,770				5,797			10,195
Investing activities:
Proceeds from sale of Maryland properties, net			246,089			0-				245,763			-
Proceeds from payment of secured loans receivable inclusive of accrued interest			5,094			0-				5,316			-
Capital improvements - existing properties			(676	)		(617	)			(948	)		(1,299	)
Deferred leasing costs			(88	)		(143	)			(116	)		(104	)
Distribution from investment in tenancy-in-common			357			423				357			423
Net cash provided by (used in) investing activities			250,776			(337	)			250,372			(980	)
Financing activities:
Repayment of mortgages			(171,586	)		(2,972	)			(194,036	)		(4,464	)
Proceeds from mortgage loan refinancing			7,500			0-				32,500			-
Deferred financing costs			(246	)		(640	)			(692	)		(640	)
Due to affiliate - loan proceeds										300			-
Due to affiliate - loan repayment			(3,205	)		(800	)			(3,505	)		(2,800	)
Dividends paid			(1,372	)		(342	)			(2,058	)		(684	)
Distributions to noncontrolling interests in subsidiaries			(19,880	)		(510	)			(20,090	)		(960	)
Net cash used in financing activities			(188,789	)		(5,264	)			(187,581	)		(9,548	)
Net increase in cash, cash equivalents and restricted cash			64,907			3,169
Net increase (decrease) in cash, cash equivalents and restricted cash										68,588			(333	)
Cash, cash equivalents and restricted cash, beginning of period			39,045			39,517				39,045			39,517
Cash, cash equivalents and restricted cash, end of period		$	103,952		$	42,686			$	107,633		$	39,184

Supplemental disclosure of cash flow data:
Interest paid		$	3,900		$	5,508			$	5,485		$	8,245

Supplemental schedule of non cash activities:
Operating activities:
Commercial tenant security deposits applied to accounts receivable		$	0-		$	15			$	-		$	10
Investing activities:
Accrued transactional costs for sales of Maryland Properties		$	326		$	0-
Accrued capital expenditures, construction costs and pre-development costs		$	93		$	345			$	26		$	116
Financing activities:
Retirement of treasury stock									$	-		$	2,791
Dividends declared but not paid		$	686		$	342			$	-		$	343
Dividends paid in share units		$	35		$	16			$	35		$	24
Vested share units issued to consultant and retired director		$	0-		$	72			$	-		$	72

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets:	The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets:							The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets:

Cash and cash equivalents		$	95,748		$	38,627			$	98,307		$	36,359
Tenants' security accounts			1,030			1,395				1,038			1,343
Funds held in post-closing escrow			6,251			0-				6,251			-
Mortgage escrows (included in prepaid expenses and other assets)			923			2,664				2,037			1,482
Total cash, cash equivalents and restricted cash		$	103,952		$	42,686			$	107,633		$	39,184

First Real Estate Investment Trust of New Jersey was organized on November 1, 1961 as a New Jersey Business Trust. On July 1, 2021, First Real Estate Investment Trust of New Jersey completed the change of its form of organization from a New Jersey real estate investment trust to a Maryland corporation (the “Reincorporation”) which was approved by its stockholders at the annual meeting of stockholders held on May 6, 2021. The Reincorporation changed the law applicable to First Real Estate Investment Trust of New Jersey’s affairs from New Jersey law to Maryland law and was accomplished by the merger of First Real Estate Investment Trust of New Jersey with and into its wholly owned subsidiary, First Real Estate Investment Trust of New Jersey, Inc. (“FREIT”, “Trust”, “us”, “we”, “our” or the “Company”), a Maryland corporation. As a result of the Reincorporation, the separate existence of First Real Estate Investment Trust of New Jersey ceased and FREIT succeeded to all the business, properties, assets and liabilities of First Real Estate Investment Trust of New Jersey. Holders of shares of beneficial interest in First Real Estate Investment Trust of New Jersey received one newly issued share of common stock of FREIT for each share of First Real Estate Investment Trust of New Jersey owned by them, without any action of stockholders required and all treasury stock held by First Real Estate Investment Trust of New Jersey was retired.

FREIT is organized and will continue to operate in such a manner as to qualify for taxation as a REIT under the Internal Revenue Code of 1986, as amended, and its stock is traded on the ~~over-the counter~~over-the-counter market under the trading symbol FREVS.

The accompanying interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and pursuant to the rules of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnotes required by GAAP for complete financial statements have been omitted. It is the opinion of management that all adjustments considered necessary for a fair presentation have been included, and that all such adjustments are of a normal recurring nature.

The consolidated results of operations for the ~~six~~nine and three-month periods ended ~~April 30,~~July 31, 2022 are not necessarily indicative of the results to be expected for the full year or any other period. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in FREIT’s Annual Report on Form 10-K for the year ended October 31, 2021.

Certain prior year cash flow line items have been reclassified to conform to the current year presentation.

In March 2020 and January 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2020-04 “Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, and ASU 2021-01 “Reference Rate Reform (ASC 848): Scope” which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform in contracts and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. ASU 2020-04 and ASU 2021-01 are effective for all entities as of March 12, 2020 through December 31, 2022. We currently do not anticipate the need to modify our existing debt agreements as a result of reference rate reform in the current year, however if any modification is executed as a result of reference rate reform, the Company will elect the optional expedient available under ASU 2020-04 and ASU 2021-01, which allows entities to account for the modification as if the modification was not substantial. We will disclose the nature of and reason for electing the optional expedient in each interim and annual financial statement period if and when applicable through December 31, 2022.

The FREIT Board of Directors (“Board”) ~~declared~~did not declare a dividend ~~of $0.10 per share~~ in the ~~second~~third quarter of Fiscal ~~2022 which will be paid on June 15, 2022 to stockholders of record on June 1,~~ 2022. ~~The Board will continue to evaluate the dividend on a quarterly basis.~~

Basic earnings ~~(loss)~~ per share is calculated by dividing net income attributable to common equity (numerator) by the weighted average number of shares and vested share units (See Note 14) outstanding during each period (denominator). The calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator is increased to include the number of additional shares that would have been outstanding if all potentially dilutive shares, such as those issuable upon the exercise of stock options, were issued during the period using the Treasury Stock method. Under the Treasury Stock method, the assumption is that the proceeds received upon exercise of the options, including the unrecognized stock option compensation expense attributable to future services, are used to repurchase FREIT’s stock at the average market price during the period, thereby increasing the number of shares to be added in computing diluted earnings per share. For the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022, the outstanding stock options increased the average dilutive shares outstanding by approximately ~~71,000~~72,000 and 074,000 shares, respectively, with an impact of approximately ~~$0.06~~$0.05 and ~~$0.00,~~$0.00, respectively, ~~on earnings (loss) per share. For the six months ended April 30, 2021, the outstanding stock options were anti-dilutive with 0 impact~~ on earnings per share. For the nine and three months ended ~~April 30,~~July 31, 2021, the outstanding stock options increased the average dilutive shares outstanding by approximately 2,000 and 4,000 shares, respectively, with no impact on earnings per share. There were ~~approximately 0 and 311,000~~no anti-dilutive shares for the ~~six~~nine and three months ended ~~April 30, 2022, respectively.~~July 31, 2022. There were approximately ~~311,000 and~~ 268,000 anti-dilutive shares for both the ~~six~~nine and three months ended ~~April 30,~~July 31, 2021, respectively. Anti-dilutive shares consist of out-of-the money stock options under the Equity Incentive Plan (See Note 13).

In accordance with “Accounting Standards Codification Topic 815, Derivatives and Hedging ("ASC 815")””, FREIT has been accounting for the Damascus Centre, LLC (“Damascus Centre”), FREIT Regency, LLC (“Regency”), Wayne PSC, LLC (“Wayne PSC”) and Station Place on Monmouth (“Station Place”) interest rate swaps and the Grande Rotunda, LLC (“Grande Rotunda”) interest rate cap as cash flow hedges marking these contracts to market, taking into account present interest rates compared to the contracted fixed rate over the life of the contract and recording the unrealized gain or loss on the swaps and cap in comprehensive income. On December 30, 2021, the Rotunda property owned by Grande Rotunda was sold, a portion of the proceeds from the sale was used to pay off the ~~$116.5~~$116.5 million then outstanding balance of the underlying loan and the corresponding interest rate cap on this loan matured with no settlement due at maturity. On January 10, 2022, the property owned by Damascus Centre was sold and a portion of the proceeds from the sale was used to pay off the ~~$18.2~~$18.2 million then outstanding balance of the underlying loan and the corresponding swap breakage fees of approximately ~~$213,000~~$213,000 related to the early termination of the interest rate swap contracts on this loan which was included as interest expense on the accompanying condensed consolidated statement of income for the ~~six~~nine months ended ~~April 30,~~July 31, 2022. (See Note 7 for further details on the sales of these properties.)

~~For~~ On June 17, 2022, Wayne PSC terminated its interest rate swap contract on its underlying loan held with People’s United Bank, which had a maturity date of October 2026, for a settlement amount of approximately $1.4 million. People’s United Bank held the ~~six~~proceeds from this settlement in escrow until the underlying loan was paid off in July 2022 and has been included as a realized gain on interest rate swap termination on the accompanying condensed consolidated statements of income for the nine and three months ended ~~April 30,~~July 31, 2022. (See Note 9 for further details.)

For the nine and three months ended July 31, 2022, FREIT recorded an unrealized gain of approximately ~~$3,801,000~~$2,408,000 and ~~$2,539,000,~~unrealized loss of $1,393,000, respectively, in the condensed consolidated statements of comprehensive income representing the change in the fair value of these cash flow hedges during such periods. For the ~~six~~nine and three months ended ~~April 30,~~July 31, 2021, FREIT recorded an unrealized gain of approximately ~~$1,675,000~~$1,441,000 and ~~$1,177,000,~~unrealized loss of $234,000, respectively, in the condensed consolidated statements of comprehensive income representing the change in the fair value of these cash flow hedges during such period. As of ~~April 30,~~July 31, 2022, there was an asset of approximately ~~$1,204,000 for the Wayne PSC swap, $131,000~~$116,000 for the Regency swap and ~~$158,000~~a liability of approximately $16,000 for the Station Place swap. As of October 31, 2021, there was a liability of approximately ~~$278,000~~$278,000 for the Damascus Centre swaps, ~~$348,000~~$348,000 for the Wayne PSC swap, ~~$750,000~~$750,000 for the Regency swap, ~~$932,000~~$932,000 for the Station Place swap and $0$0 for the Grande Rotunda interest rate cap.

The fair values are based on observable inputs (level 2 in the fair value hierarchy as provided by authoritative guidance).

On February 28, 2020, FREIT reorganized its subsidiary S and A Commercial Associates Limited Partnership (“S&A”) from a partnership into a tenancy-in-common form of ownership (“TIC”). Prior to this reorganization, FREIT owned a ~~65%~~65% membership interest in S&A, which owned ~~100%~~100% of the Pierre Towers property located in Hackensack, New Jersey through its ~~100%~~100% interest in Pierre Towers, LLC. Pursuant to the TIC agreement, FREIT ultimately acquired a ~~65%~~65% undivided interest in the Pierre Towers property, which was formerly owned by S&A. Based on the guidance of Accounting Standards Codification 810, “Consolidation”, FREIT’s investment in the TIC is accounted for under the equity method of accounting. While FREIT’s effective ownership percentage interest in the Pierre Towers property remained unchanged after the reorganization to a TIC, FREIT no longer had a controlling interest as the TIC is now under joint control.

FREIT’s investment in the TIC was approximately ~~$18.9~~$18.9 million and ~~$19.4~~$19.4 million at ~~April 30,~~July 31, 2022 and October 31, 2021, respectively. For the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022, FREIT recognized a loss on investment in TIC of approximately ~~$156,000~~$99,000 and ~~$32,000,~~a gain on investment in TIC of approximately $57,000, respectively, in the accompanying condensed consolidated statements of ~~operations.~~income. For the ~~six~~nine and three months ended ~~April 30,~~July 31, 2021, FREIT recognized a loss on investment in TIC of approximately ~~$145,000~~$245,000 and ~~$118,000,~~$100,000, respectively, in the accompanying condensed consolidated statements of ~~operations.~~income.

Hekemian & Co., Inc. (“Hekemian & Co.”) manages the Pierre Towers property based on a management agreement between the owners of the TIC and Hekemian & Co. dated as of February 28, 2020 and will expire on February 28, 2023. The management agreement is for a term of one year and ~~is automatically renewed~~will renew for successive ~~periods~~one (1) year terms upon the unanimous approval of ~~one year~~the TIC owners prior to the expiration of the then-current term unless ~~either party gives not less than~~Hekemian & Co. delivers written notice of termination of this management agreement, which notice must be delivered at least sixty (60) days prior ~~notice~~to the end of ~~non-renewal.~~ the then-current term.

The management agreement requires the payment of management fees equal to 5%5% of rents collected. Management fees charged to operations were approximately ~~$197,000~~$298,000 and ~~$99,000~~$101,000 for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022, respectively, and ~~$187,000~~$280,000 and ~~$95,000~~$93,000 for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2021, respectively. The Pierre Towers property also uses the resources of the Hekemian & Co. insurance department to secure various insurance coverages for its property. Hekemian & Co. is paid a commission for these services. Such commissions were charged to operations and amounted to approximately $0$40,000 for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022 and ~~$10,000~~$47,000 and $0$37,000 for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2021, respectively.

The following table summarizes the balance sheets of the Pierre Towers property as of ~~April 30,~~July 31, 2022 and October 31, 2021, accounted for by the equity method:

		April 30,		October 31,		July 31,		October 31,
		2022		2021		2022		2021
		(In Thousands of Dollars)				(In Thousands of Dollars)

Real estate, net	$	77,020	$	78,023	$	76,525	$	78,023
Cash and cash equivalents		1,430		1,338		1,801		1,338
Tenants' security accounts		457		484		456		484
Receivables and other assets		527		510		640		510
Total assets	$	79,434	$	80,355	$	79,422	$	80,355

Mortgages payable, net of unamortized debt issuance costs	$	49,558	$	49,691	$	49,492	$	49,691
Accounts payable and accrued expenses		247		261		221		261
Tenants' security deposits		466		484		461		484
Deferred revenue		132		99		129		99
Equity		29,031		29,820		29,119		29,820
Total liabilities & equity	$	79,434	$	80,355	$	79,422	$	80,355

FREIT's investment in TIC (65% interest)	$	18,870	$	19,383	$	18,927	$	19,383

The following table summarizes the statements of operations of the Pierre Towers property for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022 and 2021, accounted for by the equity method:

		Six Months Ended April 30,					Three Months Ended April 30,						Nine Months Ended July 31,				Three Months Ended July 31,
		2022			2021		2022			2021			2022		2021		2022		2021
		(In Thousands of Dollars)					(In Thousands of Dollars)							(In Thousands of Dollars)				(In Thousands of Dollars)

Revenue	$	3,923		$	3,774		$	1,969		$	1,883		$	5,990	$	5,674	$	2,067	$	1,900
Operating expenses		2,275			2,114			1,074			1,123			3,307		3,225		1,032		1,111
Depreciation		1,087			1,081			545			541			1,634		1,623		547		542
Operating income		561			579			350			219			1,049		826		488		247

Interest expense including amortization of deferred financing costs		801			802			400			401			1,201		1,203		400		401

Net loss	$	(240	)	$	(223	)	$	(50	)	$	(182	)
Net (loss) income													$	(152)	$	(377)	$	88	$	(154)

FREIT's loss on investment in TIC (65% interest)	$	(156	)	$	(145	)	$	(32	)	$	(118	)
FREIT's (loss) income on investment in TIC (65% interest)													$	(99)	$	(245)	$	57	$	(100)

~~FREIT previously reported that on~~On February 4, 2022, the Superior Court of New Jersey, Monmouth County (“Court”) entered an Order with respect to summary judgment motions filed by the parties in connection with litigation between certain affiliates of FREIT (the “Sellers” or “Defendant”) and Sinatra Properties, LLC (“Sinatra” or “Plaintiff”). The litigation relates to a Purchase and Sale Agreement entered into on January 14, 2020 (“PSA”) between the Sellers and Sinatra involving the sale by the Sellers of ~~100%~~100% of their ownership interests in six (6) real properties held by the Sellers.

The Court finds that the Plaintiff’s have breached the subject contract and the Court dismisses all claims for relief filed by the Plaintiff in this suit. The Court dismissed the Complaint and dismisses the Lis Pendens.

The Court finds that the liquidated damage provision of the contract is not enforceable and the Court Orders that the ~~$15~~$15 million held in escrow be returned to the Plaintiff.

The Court dismisses the Counterclaims and Third Party Complaint. All pleadings are dismissed.

~~The Sellers have been evaluating the February 4, 2022 Order and their rights and remedies with respect thereto.~~

On May 31, 2022, Sinatra filed a Motion for Reconsideration with the Court, requesting that the Court reconsider its February 4, 2022 Order and, among other things, (a) grant Sinatra’s motion for summary judgment, and (b) reverse the Court’s findings that (1) Sinatra breached the PSA, (2) the Sellers did not breach the PSA and (3) the Court’s dismissal of the Complaint and Lis Pendens.

~~The Sellers continue to believe that~~On July 8, 2022, the ~~allegations set forth in the Complaint and Answer filed by Sinatra and in the Answer and Affirmative Defenses filed by Sinatra and Kushner Realty Acquisition LLC are without merit.~~Court denied Sinatra’s Motion for Reconsideration.

Through the quarter ended ~~April 30,~~July 31, 2022, the ~~$15~~$15 million deposit has not been included in income in the accompanying condensed consolidated statements of ~~operations.~~income. Legal costs attributed to the legal proceeding between FREIT and certain of its affiliates and Sinatra Properties, LLC have been incurred in the amount of approximately ~~$892,000~~$1,135,000 and ~~$279,000~~$243,000 for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022, respectively, and ~~$1,108,000~~$1,842,000 and ~~$628,000,~~$733,000, for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2021, respectively, and are included in operating expenses on the condensed consolidated statements of ~~operations.~~income.

The Sellers have been evaluating the February 4, 2022 Order and their rights and remedies with respect thereto. The Sellers continue to believe that the allegations set forth in the Complaint filed by Sinatra and in the Answer to Counterclaims and Third-Party Complaint and Affirmative Defenses filed by Sinatra and Kushner Realty Acquisition LLC, are without merit.

On November 22, 2021, certain affiliates (the “Maryland Sellers”) of FREIT entered into a Purchase and Sale Agreement (the “Maryland Purchase and Sale Agreement”) with MCB Acquisition Company, LLC (the “Maryland Purchaser”), a third party, pursuant to which the Maryland Sellers agreed to sell three properties to the Maryland Purchaser. The properties consisted of retail and office space and a residential apartment community owned by Grande Rotunda, LLC (the “Rotunda Property”), a shopping center owned by Damascus Centre, LLC (the “Damascus Property”), and a shopping center owned by WestFREIT Corp. (the “Westridge Square Property”). FREIT owns ~~100%~~100% of its subsidiary, WestFREIT Corp. (“WestFREIT”), a ~~60%~~60% interest in Grande Rotunda, LLC (“Grande Rotunda”), the joint venture that owned the Rotunda Property, and a ~~70%~~70% interest in Damascus Centre, LLC (“Damascus Centre”), the joint venture that owned the Damascus Property.

The original purchase price for the Rotunda Property, the Damascus Property and the Westridge Square Property (collectively the “Maryland Properties”) under the Maryland Purchase and Sale Agreement was reduced by ~~$2,723,000~~$2,723,000 from ~~$267,000,000~~$267,000,000 to ~~$248,750,269,~~$248,750,269, after giving effect to the ~~$15,526,731~~$15,526,731 escrow deposit described below. This reduction in the sales price of ~~$2,723,000~~$2,723,000 was to account for improvements and repairs to the Maryland Properties and miscellaneous items identified by the Maryland Purchaser in the course of its due diligence inspection. Additionally, the Maryland Purchaser was obligated under the Maryland Purchase and Sale Agreement to deposit a total of ~~$15,526,731~~$15,526,731 in escrow with respect to certain leases at the Maryland Properties, which have not been executed or where the rent commencement date has not occurred or economic obligations of the Maryland Sellers under certain leases remain unpaid. Although there can be no assurance, a portion of the ~~$15,526,731~~$15,526,731 escrow deposit (the “Maryland Purchaser Escrow Payment”) may be paid to the Maryland Sellers depending upon the outcome of construction and leasing activities at the Maryland Properties. The Maryland Purchaser Escrow Payment Agreement provides for among other things, monthly disbursements from escrow to the Maryland Purchaser related to the aforementioned tenant lease agreements until the earlier of (i) the rent commencement date of the respective tenant lease agreements or (ii) ~~5-years~~5-years from the date of the agreement. Release and amounts of escrowed funds to FREIT, generally, is contingent on the success and timing of future leasing activities at the Maryland Properties.

On December 30, 2021, the sale of the Rotunda Property, which had a net book value of approximately ~~$136.1~~$136.1 million, was consummated by Grande Rotunda and the Maryland Purchaser for a purchase price of ~~$191,080,598.~~$191,080,598. Grande Rotunda received net proceeds from the sale of approximately ~~$36.5~~$36.5 million (inclusive of approximately ~~$0.7~~$0.7 million in funds released from the Maryland Purchaser Escrow Payment during the second quarter of Fiscal 2022), after payment of related mortgage debt in the amount of ~~$116.5~~$116.5 million, payment of loans (including interest) to each of the partners in Grande Rotunda (FREIT with a ~~60%~~60% interest and Rotunda 100, LLC (“Rotunda 100”) with a ~~40%~~40% interest) in the amount of approximately ~~$31~~$31 million, with FREIT receiving approximately ~~$27.7~~$27.7 million, and certain transactional expenses and transfer taxes including a brokerage fee due to Hekemian & Co. of approximately ~~$4.8~~$4.8 million (See Note 8). In addition, the Maryland Purchaser deposited a total of ~~$14,026,401~~$14,026,401 of the Maryland Purchaser Escrow Payment in escrow with respect to certain leases at the Rotunda Property, which have not been executed or where the rent commencement date has not occurred or economic obligations of Grande Rotunda under certain leases remain unpaid. As of ~~April 30,~~July 31, 2022, approximately ~~$710,000~~$710,000 of these funds has been released from escrow to Grande Rotunda. The escrow and related gain on sale were reduced by approximately ~~$1.2~~$1.2 million due to a change in estimate in the second quarter of Fiscal 2022 related to a change in the timing of anticipated rent commencement dates for certain tenants, which will reduce the escrowed funds available to be released to Grande Rotunda. Approximately ~~$6.3~~$6.3 million of remaining funds are held in a post-closing escrow for rents ~~are~~ anticipated to be fully released in Fiscal 2023 and are included in “Funds held in post-closing escrow” on the accompanying condensed consolidated balance sheet as of ~~April 30,~~July 31, 2022. The net proceeds from the sale were distributed to the partners in Grande Rotunda with FREIT receiving approximately ~~$21.4~~$21.4 million based on its ~~60%~~60% interest in Grande Rotunda. The sale of the Rotunda Property resulted in a net gain of approximately ~~$50~~$50 million (as adjusted) which includes approximately $7$7 million of proceeds released and anticipated to be released from funds held in escrow, a write-off of the straight-line rent receivable of approximately ~~$1.8~~$1.8 million and a write-off of unamortized lease commissions of approximately ~~$1.1~~$1.1 million. As of ~~April 30,~~July 31, 2022, secured loans including accrued interest ~~held~~made by certain members in Rotunda 100 ~~in the amount~~ of approximately ~~$5.1~~$5.3 million were repaid to FREIT.

On January 7, 2022, the sale of the Westridge Square Property, which had a net book value of approximately ~~$11.5~~$11.5 million, was consummated by WestFREIT and the Maryland Purchaser for a purchase price of ~~$20,984,604.~~$20,984,604. WestFREIT received net proceeds from the sale of approximately ~~$0.1~~$0.1 million (inclusive of approximately ~~$0.8~~$0.8 million in funds released from the Maryland Purchaser Escrow Payment during the second quarter of Fiscal 2022), after payment of related mortgage debt in the amount of approximately ~~$21.1~~$21.1 million and certain transactional expenses and transfer taxes including a brokerage fee due to Hekemian & Co. of approximately ~~$0.5~~$0.5 million (See Note 8). In addition, the Maryland Purchaser deposited a total of ~~$1,015,396~~$1,015,396 of the Maryland Purchaser Escrow Payment in escrow with respect to certain leases at the Westridge Square Property, which had not been executed or where the rent commencement date had not occurred or economic obligations of WestFREIT under certain leases remained unpaid. As of ~~April 30,~~July 31, 2022, approximately ~~$821,000~~$821,000 of these funds have been released from escrow with no remaining funds held in post-closing escrow for rents anticipated to be released. The sale of the Westridge Square Property resulted in a net gain of approximately ~~$8.7~~$8.7 million, which includes approximately ~~$0.8~~$0.8 million of proceeds released from funds held in escrow, a write-off of the straight-line rent receivable of approximately ~~$0.5~~$0.5 million and a write-off of unamortized lease commissions of approximately ~~$0.3~~$0.3 million.

On January 10, 2022, the sale of the Damascus Property, which had a net book value of approximately ~~$24.6~~$24.6 million, was consummated by Damascus Centre and the Maryland Purchaser for a purchase price of ~~$36,685,067.~~$36,685,067. Damascus Centre received net proceeds from the sale of approximately ~~$17.3~~$17.3 million (inclusive of approximately ~~$0.4~~$0.4 million in funds released from the Maryland Purchaser Escrow Payment during the second quarter of Fiscal 2022), after payment of related mortgage debt in the amount of approximately ~~$18.2~~$18.2 million and the corresponding swap breakage fees of approximately ~~$213,000~~$213,000 related to the early termination of the interest rate swap contracts on this loan and certain transactional expenses and transfer taxes including a brokerage fee due to Hekemian & Co. of approximately ~~$0.9~~$0.9 million (See Note 8). In addition, the Maryland Purchaser deposited a total of ~~$484,934~~$484,934 of the Maryland Purchaser Escrow Payment in escrow with respect to certain leases at the Damascus Property, which had not been executed or where the rent commencement date had not occurred or economic obligations of Damascus Centre under certain leases remained unpaid. As of ~~April 30,~~July 31, 2022, approximately ~~$415,000~~$415,000 of these funds have been released from escrow with no remaining funds held in post-closing escrow for rents anticipated to be released. The net proceeds from the sale were distributed to the partners in Damascus Centre with FREIT receiving approximately ~~$11.8~~$11.8 million based on its ~~70%~~70% interest in Damascus Centre. The sale of the Damascus Property resulted in a net gain of approximately ~~$10.1~~$10.1 million, which includes approximately ~~$0.4~~$0.4 million of proceeds released from funds held in escrow, a write-off of the straight-line rent receivable of approximately ~~$0.6~~$0.6 million and a write-off of unamortized lease commissions of approximately ~~$0.3~~$0.3 million.

In summary, the sale of the Maryland Properties having a total net book value of ~~$172.2~~$172.2 million was consummated by the Maryland Sellers and the Maryland Purchaser for a purchase price of ~~$248,750,269,~~$248,750,269, after giving effect to the ~~$15,526,731~~$15,526,731 Maryland Purchaser Escrow Payment. This sale resulted in net proceeds of approximately ~~$53.9~~$53.9 million (inclusive of approximately ~~$1.9~~$1.9 million in funds released from the Maryland Purchaser Escrow Payment during the second quarter of Fiscal 2022), after payment of related mortgage debt in the amount of ~~$155.8~~$155.8 million and the corresponding swap breakage fees of approximately ~~$213,000~~$213,000 related to the early termination of the interest rate swap contracts on the Damascus Property loan, payment of loans (including interest) to each of the partners in Grande Rotunda in the amount of approximately ~~$31~~$31 million and certain transactional expenses and transfer taxes including brokerage fees due to Hekemian & Co. of approximately ~~$6.2~~$6.2 million. As of ~~April 30,~~July 31, 2022, approximately ~~$1,946,000~~$1,946,000 of ~~these funds have~~the Maryland Purchaser Escrow Payment has been released from escrow to the Maryland Sellers. The escrow and related gain on sale were reduced by approximately ~~$1.2~~$1.2 million due to a change ~~in estimate~~ in the second quarter of Fiscal 2022 related to a change in the timing of anticipated rent commencement dates for certain tenants, which will reduce the escrowed funds available to be released to Grande Rotunda. Approximately ~~$6.3~~$6.3 million of remaining funds are held in a post-closing escrow for rents anticipated to be fully released in Fiscal 2023 and are included in “Funds held in post-closing escrow” on the accompanying condensed consolidated balance sheet as of ~~April 30,~~July 31, 2022. The sale of the Maryland Properties resulted in a net gain of approximately ~~$68.8~~$68.8 million (as adjusted) (with a consolidated impact to FREIT of approximately ~~$45.6~~$45.6 million) which includes approximately ~~$8.2~~$8.2 million of proceeds released and anticipated to be released from funds held in escrow, a write-off of the straight-line rent receivable of approximately ~~$2.9~~$2.9 million and a write-off of unamortized lease commissions of approximately ~~$1.7~~$1.7 million.

As the disposal of the Maryland Properties did not represent a strategic shift that would have a major impact on FREIT’s operations or financial results, the properties’ operations were not reflected as discontinued operations in the accompanying condensed consolidated financial statements.

Hekemian & Co. currently manages all the properties owned by FREIT and its affiliates, except for the office building at the Rotunda Property, which was sold on December 30, 2021 and was formerly managed by an independent third party management company. The management agreement between FREIT and Hekemian & Co. dated as of November 1, 2001 (“Management Agreement”) expires on October 31, 2023 and is automatically renewed for successive periods of two years unless either party gives not less than six (6) months prior notice of non-renewal.

The Management Agreement requires the payment of management fees equal to 4%4% to 5%5% of rents collected. Such fees charged to operations were approximately ~~$790,000~~$1,108,000 and ~~$1,062,000~~$1,587,000 for the ~~six~~nine months ended ~~April 30,~~July 31, 2022 and 2021, respectively, and ~~$306,000~~$318,000 and ~~$549,000~~$525,000 for the three months ended ~~April 30,~~July 31, 2022 and 2021, respectively. In addition, the Management Agreement provides for the payment to Hekemian & Co. of leasing commissions, as well as the reimbursement of certain operating expenses, such as payroll and insurance costs, incurred on behalf of FREIT. Such commissions and reimbursements amounted to approximately ~~$348,000~~$515,000 and ~~$255,000~~$385,000 for the ~~six~~nine months ended ~~April 30,~~July 31, 2022 and 2021, respectively, and ~~$164,000~~$167,000 and ~~$126,000~~$130,000 for the three months ended ~~April 30,~~July 31, 2022 and 2021, respectively. FREIT also uses the resources of the Hekemian & Co. insurance department to secure various insurance coverages for its properties and subsidiaries. Hekemian & Co. is paid a commission for these services. Such commissions were charged to operations and amounted to approximately ~~$59,000~~$164,000 and ~~$71,000~~$181,000 for the ~~six~~nine months ended ~~April 30,~~July 31, 2022 and 2021, respectively, and ~~$7,000~~$105,000 and ~~$2,000~~$110,000 for the three months ended ~~April 30,~~July 31, 2022 and 2021, respectively.

From time to time, FREIT engages Hekemian & Co., or certain affiliates of Hekemian & Co., to provide additional services, such as consulting services related to development, property sales and financing activities of FREIT. Separate fee arrangements are negotiated between Hekemian & Co. and FREIT with respect to such additional services. Such fees incurred for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022 were approximately ~~$6,294,000~~$6,388,000 and ~~$0,~~$94,000, respectively. Fees incurred during Fiscal 2022 related to commissions to Hekemian & Co. for the following: ~~$4,777,000~~$4,777,000 for the sale of the Rotunda Property; ~~$917,000~~$917,000 for the sale of the Damascus Property; ~~$525,000~~$525,000 for the sale of the Westridge Square Property; ~~$75,000~~$94,000 for the refinancing of the loan on the Preakness Shopping Center; and $75,000 for the refinancing of the loan on the Boulders property. The commissions related to the sale of the Rotunda Property, the Damascus Property and the Westridge Square Property were charged against the gain on sale of the Maryland Properties (See Note 7) in the accompanying condensed consolidated statement of income for the ~~six~~nine months ended ~~April 30,~~July 31, 2022. The ~~commission~~commissions for the refinancing of the loan on the Boulders property ~~was a~~and on the Preakness Shopping Center were deferred mortgage ~~cost~~costs included in the unamortized debt issuance costs in the accompanying condensed consolidated balance sheet as of ~~April 30,~~July 31, 2022. Such fees incurred for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2021 were approximately ~~$236,500~~$236,500 and ~~$236,500,~~$0, respectively. Fees incurred during Fiscal 2021 related to commissions to Hekemian & Co. for the following: ~~$150,000~~$150,000 for the extension of the Grande Rotunda loan; ~~$54,000~~$54,000 for the extension and modification of the WestFREIT loan; ~~$32,500~~and $32,500 for the renewal of FREIT’s line of credit.

Robert S. Hekemian, Jr., Chief Executive Officer, President and a Director of FREIT, is the Chief Executive Officer of Hekemian & Co. David B. Hekemian, a Director of FREIT, is the President of Hekemian & Co. Allan Tubin, Chief Financial Officer and Treasurer of FREIT, is the Chief Financial Officer of Hekemian & Co.

Director fee expense and/or executive compensation (including interest and dividends) incurred by FREIT for the ~~six~~nine months ended ~~April 30,~~July 31, 2022 and 2021 was approximately ~~$279,000~~$429,000 and ~~$232,000,~~$350,000, respectively, for Robert S. Hekemian, Jr., ~~$20,000~~$30,000 and ~~$15,000,~~$23,000, respectively, for Allan Tubin and ~~$29,000~~$43,000 and ~~$27,000,~~$42,000, respectively, for David Hekemian. Director fee expense and/or executive compensation (including interest and dividends) incurred by FREIT for the three months ended ~~April 30,~~July 31, 2022 and 2021 was approximately ~~$141,000~~$150,000 and ~~$116,000,~~$118,000, respectively, for Robert S. Hekemian, Jr., ~~$10,000~~$10,000 and ~~$8,000,~~$8,000, respectively, for Allan Tubin and ~~$14,000~~$13,000 and ~~$10,000,~~$15,000, respectively, for David Hekemian (See Note 14). Such costs are included within operating expenses on the accompanying condensed consolidated statements of ~~operations.~~income.

The equity owners of Rotunda 100, which owns a ~~40%~~40% minority equity interest in Grande Rotunda, are principally employees of Hekemian & Co. To incentivize the employees of Hekemian & Co., FREIT advanced, only to employees of Hekemian & Co., up to ~~50%~~50% of the amount of the equity contributions that the Hekemian & Co. employees were required to invest in Rotunda 100. These advances were in the form of secured loans that bear interest at rates that float at 225 basis points over the ninety (90) day LIBOR, as adjusted each November 1, February 1, May 1 and August 1. These loans ~~are~~were secured by the Hekemian & Co. employees’ interests in Rotunda 100 and ~~are~~were full recourse loans. On December 7, 2017, the Board approved a further extension of the previously amended maturity dates of these loans to the date or dates upon which distributions of cash are made by Grande Rotunda to its members as a result of a refinancing or sale of Grande Rotunda or the Rotunda Property. The aggregate outstanding principal balance and accrued but unpaid interest of the Rotunda 100 notes was approximately $4,000,000 and $1,292,000, respectively, at October 31, 2021. On

December 30, 2021, the Rotunda Property was sold and the net sales proceeds were distributed to the partners in Grande Rotunda. (See Note 7 for further details.) As of ~~April 30,~~July 31, 2022, approximately ~~$5.1~~$5.3 million of the secured loans receivable (including accrued interest) were repaid to ~~FREIT. The aggregate~~FREIT with no outstanding balance remaining of principal ~~balance of~~or interest related to the Rotunda 100 notes was approximately $167,000 and $4,000,000 at April 30, 2022 and October 31, 2021, respectively. The accrued but unpaid interest related to these notes as of April 30, 2022 and October 31, 2021 amounted to approximately $56,000 and $1,292,000, respectively, and is included in secured loans receivable on the accompanying condensed consolidated balance sheets.notes.

In Fiscal 2017, Grande Rotunda incurred substantial expenditures at the Rotunda Property related to retail tenant improvements, leasing costs and operating expenditures which, in the aggregate, exceeded revenues as the property was still in the rent up phase and the construction loan held with Wells Fargo at that time was at its maximum level, with no additional funding available to draw. Accordingly, during Fiscal 2017 the equity owners in Grande Rotunda contributed their respective pro-rata share of any cash needs through loans to Grande Rotunda. In Fiscal 2021, Grande Rotunda repaid $7$7 million to the equity owners in Grande Rotunda based on their respective pro-rata share resulting in a loan repayment to Rotunda 100 of approximately ~~$2.8~~$2.8 million. As of October 31, 2021, Rotunda 100 had funded Grande Rotunda with approximately ~~$3.3~~$3.3 million (including interest) which was included in “Due to affiliate” on the accompanying condensed consolidated balance sheet. On December 30, 2021, the Rotunda Property was sold and Grande Rotunda repaid approximately ~~$31~~$31 million to the equity owners in Grande Rotunda resulting in a loan repayment to Rotunda 100 of approximately ~~$3.3~~$3.3 million. As of ~~April 30,~~July 31, 2022, all loans were repaid in full to each of the partners.

FREIT owns a ~~40%~~40% equity interest in Wayne PSC and H-TPKE, LLC (“H-TPKE”), owns a ~~60%~~60% equity interest in Wayne PSC. An aggregate of approximately ~~73%~~73% of the membership interests in H-TPKE is controlled by: Robert S. Hekemian, Jr., the Chief Executive Officer, President and a ~~director~~Director of FREIT and a shareholder and officer of Hekemian & Co.; David B. Hekemian, a ~~director~~Director of FREIT and a shareholder and officer of Hekemian & Co.; the late Robert S. Hekemian, the former Chairman and Chief Executive Officer and consultant to FREIT and a former shareholder and former officer of Hekemian & Co.; members of the families of Robert S. Hekemian, Jr., David B. Hekemian and the late Robert S. Hekemian; and other employees of Hekemian & Co. On March 10, 2022, the equity owners in Wayne PSC, H-TPKE and FREIT, each entered into a grid promissory note for funding up to ~~$600,000~~$600,000 and ~~$400,000,~~$400,000, respectively, based on each owner’s respective pro-rata share. During May 2022, Wayne PSC required funding by each of the partners totaling ~~$500,000,~~$500,000, with each owner contributing its respective pro-rata share of Wayne ~~PSC,~~PSC. As such, H-TPKE funded ~~$300,000~~$300,000 and FREIT funded ~~$200,000.~~$200,000. Wayne PSC repaid these loans in full (including accrued interest) to each of the equity owners from the net proceeds received from the refinancing of the loan on the Preakness Shopping Center in July 2022 (See Note 9).

On August 19, 2022, Westwood Hills, LLC, exercised its right, pursuant to the loan agreement, to extend the term of its $25 million loan on its property located in Westwood, New Jersey, maturing on October 1, 2022, for two (2) additional six (6) month periods on the same terms and conditions as stated in the loan agreement.

On July 22, 2022, Wayne PSC refinanced its $22.1 million loan (inclusive of deferred interest of approximately $136,000), which would have matured on October 1, 2026, on its Preakness Shopping center located in Wayne, New Jersey with a new loan held by ConnectOne Bank in the amount of $25,000,000. This loan is interest-only based on a fixed interest rate of 5% and has a term of three years with a maturity date of August 1, 2025. Additionally, an interest reserve escrow was established at closing representing twelve months of interest of $1,250,000, which can be used to pay monthly interest on this loan with a requirement to replenish the escrow account back to $1,250,000 when the balance in the escrow account is reduced to three months of interest. This refinancing resulted in (i) annual debt service savings of approximately $340,000 due to interest-only payments; (ii) an increase in the interest rate from a fixed interest rate of 3.625% to a fixed interest rate of 5%; and (iii) net refinancing proceeds of approximately $1.1 million which can be used for capital expenditures and general corporate purposes. As part of the refinancing, Wayne PSC terminated the interest rate swap contract on the underlying loan resulting in a realized gain on the swap breakage of approximately $1.4 million, which has been recorded as a realized gain on the accompanying condensed consolidated statements of income for the nine and three months ended July 31, 2022. (See Note 4 for additional details)

On December 30, 2021, FREIT refinanced its ~~$14.4~~$14.4 million loan (which would have matured on February 1, ~~2022)~~2022) on its Boulders property located in Rockaway, New Jersey with a new loan held by ConnectOne Bank in the amount of ~~$7,500,000,~~$7,500,000, with additional funding available to be drawn upon in the amount of ~~$7,500,000~~$7,500,000 for corporate needs. This loan is interest-only and has a maturity date of January 1, 2024 with the option of FREIT to extend for one year from the maturity date, subject to certain provisions of the loan agreement. This refinancing will provide annual debt service savings of approximately $1,173,000 as a result of the reduction in the principal amount, a reduction in the annual interest rate from a fixed rate of ~~5.37%~~5.37% to a fixed rate of ~~2.85%~~2.85% and interest-only payments being required under this new loan.

FREIT’s revolving line of credit provided by the Provident Bank was renewed for a three-year term ending on October 31, ~~2023.~~2023. Draws against the credit line can be used for working capital needs and standby letters of credit. Draws against the credit line are secured by mortgages on FREIT’s Franklin Crossing Shopping Center in Franklin Lakes, New Jersey and retail space in Glen Rock, New Jersey. The total line of credit is ~~$13~~$13 million and the interest rate on the amount outstanding is based on a floating interest rate of prime minus 25 basis points with a floor of ~~3.75%~~3.75%. As of ~~April 30,~~July 31, 2022 and October 31, 2021, there was no amount outstanding and $13 million was available under the line of credit.

In accordance with certain loan agreements, FREIT may be required to meet or maintain certain financial covenants throughout the term of the loan. As a result of the COVID-19 pandemic, rent losses and the planning for a potential redevelopment of its shopping center, as of October 31, 2021, Wayne PSC was not, and currently is not, in compliance with a look back debt service coverage ratio loan covenant contained in the mortgage loan agreement held by People’s United Bank. Although the Company continues to make its required debt service payments in accordance with the loan agreement, it is unable to comply with this covenant. As such, the bank could exercise its remedies under the loan agreement including, among other things, requiring a partial or full repayment of the loan with a balance of approximately $22.2 million as of April 30, 2022. On June 2, 2022, the lender agreed to waive the covenant default subject to the loan being paid off on or before September 1, 2022. Additionally, Wayne PSC is in the process of refinancing this loan with a new lender in the amount of $25 million, which would be interest only for a term of three years and based on a fixed interest rate of 5%. Until such time as a definitive agreement is entered into, there can be no assurance this loan will be entered into.

The following table shows the estimated fair value and net carrying value of FREIT’s long-term debt at ~~April 30,~~July 31, 2022 and October 31, 2021:

($ in Millions)	April 30, 2022	October 31, 2021	July 31, 2022	October 31, 2021

Fair Value	$131.8	$301.6	$136.8	$301.6

Carrying Value, Net	$136.1	$299.9	$138.3	$299.9

Fair values are estimated based on market interest rates at ~~April 30,~~July 31, 2022 and October 31, 2021 and on a discounted cash flow analysis. Changes in assumptions or estimation methods may significantly affect these fair value estimates. The fair value is based on observable inputs (level 2 in the fair value hierarchy as provided by authoritative guidance).

FREIT has determined that it has two reportable segments: commercial properties and residential properties. These reportable segments offer different types of space, have different types of tenants, and are managed separately because each requires different operating strategies and management expertise. The commercial segment is comprised of five (5) properties, excluding the Rotunda Property, the Westridge Square Property and the Damascus Property, which were sold on December 30, 2021, January 7, 2022 and January 10, 2022, respectively. The residential segment is comprised of six (6) properties, excluding the Icon at the Rotunda Property, which was sold on December 30, 2021. (See Note 7 for further details.)

The accounting policies of the segments are the same as those described in Note 1 in FREIT’s Annual Report on Form 10-K for the fiscal year ended October 31, 2021. The chief operating and decision-making group responsible for oversight and strategic decisions of FREIT's commercial segment, residential segment and corporate/other is comprised of FREIT’s Board.

FREIT, through its chief operating and decision making group, assesses and measures segment operating results based on net operating income ("NOI"). NOI, a standard used by real estate professionals, is based on operating revenue and expenses directly associated with the operations of the real estate properties, but excludes: deferred rents (straight lining), depreciation, financing costs and other items. NOI is not a measure of operating results or cash flows from operating activities as measured by GAAP, and is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity.

Real estate rental revenue, operating expenses, NOI and recurring capital improvements for the reportable segments are summarized below and reconciled to condensed consolidated net income attributable to common equity for the ~~six~~nine and ~~three month~~three-month periods ended ~~April 30,~~July 31, 2022 and 2021. Asset information is not reported since FREIT does not use this measure to assess performance.

	Six Months Ended				Three Months Ended				Nine Months Ended				Three Months Ended
	April 30,				April 30,				July 31,				July 31,
	2022		2021		2022		2021		2022		2021		2022		2021
	(In Thousands of Dollars)				(In Thousands of Dollars)				(In Thousands of Dollars)				(In Thousands of Dollars)
Real estate rental revenue:
Commercial	$	6,266	$	12,414	$	1,945	$	6,063	$	8,445	$	18,299	$	2,179	$	5,885
Residential		11,059		13,357		4,721		6,748		15,803		20,026		4,744		6,669
Total real estate rental revenue		17,325		25,771		6,666		12,811		24,248		38,325		6,923		12,554

Real estate operating expenses:
Commercial		3,919		5,811		1,234		3,184		5,146		8,346		1,227		2,535
Residential		4,687		5,390		2,046		2,726		6,788		8,232		2,101		2,842
Total real estate operating expenses		8,606		11,201		3,280		5,910		11,934		16,578		3,328		5,377

Net operating income:
Commercial		2,347		6,603		711		2,879		3,299		9,953		952		3,350
Residential		6,372		7,967		2,675		4,022		9,015		11,794		2,643		3,827
Total net operating income	$	8,719	$	14,570	$	3,386	$	6,901	$	12,314	$	21,747	$	3,595	$	7,177


Reconciliation to condensed consolidated net income (loss) attributable to common equity:
Reconciliation to condensed consolidated net income attributable to common equity:
Segment NOI	$	8,719		$	14,570		$	3,386		$	6,901		$	12,314		$	21,747		$	3,595		$	7,177
Deferred rents - straight lining		(61	)		(213	)		(51	)		(7	)		(25	)		(225	)		36			(12	)
Investment income		64			59			38			29			183			88			119			29
General and administrative expenses		(2,196	)		(2,730	)		(869	)		(1,470	)		(3,107	)		(4,143	)		(911	)		(1,413	)
Loss on investment in tenancy-in-common		(156	)		(145	)		(32	)		(118	)
(Loss) Gain on investment in tenancy-in-common														(99	)		(245	)		57			(100	)
Depreciation		(2,534	)		(4,633	)		(714	)		(2,338	)		(3,257	)		(6,948	)		(723	)		(2,315	)
Net gain (loss) on sale of Maryland properties		68,771			0-			(1,232	)		0-
Net gain on sale of Maryland properties														68,771			-			-			-
Net realized gain on Wayne PSC interest rate swap termination														1,415			-			1,415			-
Financing costs		(4,455	)		(6,192	)		(1,527	)		(3,060	)		(6,229	)		(9,242	)		(1,774	)		(3,050	)
Net income (loss)		68,152			716			(1,001	)		(63	)
Net (income) loss attributable to noncontrolling interests in subsidiaries		(22,727	)		(149	)		649			72
Net income (loss) attributable to common equity	$	45,425		$	567		$	(352	)	$	9
Net income														69,966			1,032			1,814			316
Net income attributable to noncontrolling interests in subsidiaries														(23,420	)		(256	)		(693	)		(107	)
Net income attributable to common equity													$	46,546		$	776		$	1,121		$	209

FREIT has elected to be treated as a REIT for federal income tax purposes and as such intends to distribute at least ~~90%~~90% of its ordinary taxable income (to maintain its status as a REIT) and ~~100%~~100% of its capital gains to its stockholders as dividends for the fiscal year ending October 31, 2022. FREIT distributed ~~99%~~99% of its ordinary taxable income to its stockholders as dividends for the fiscal year ended October 31, 2021. Accordingly, no provision for federal or state income taxes related to such ordinary taxable income and such gains were recorded in FREIT’s condensed consolidated financial statements for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022 and 2021.

As of ~~April 30,~~July 31, 2022, FREIT had no material uncertain income tax positions. The tax years subsequent to and including the fiscal year ended October 31, ~~2018~~2019 remain open to examination by the major taxing jurisdictions.

As of ~~April 30,~~July 31, 2022, 442,060 shares are available for issuance under the ~~Plan.~~FREIT Equity Incentive Plan (the “Plan”).

The following table summarizes stock option activity for the ~~six~~nine and three-month periods ended July 31, 2022 and 2021:

~~For the six and three month periods ended April 30,~~July 31, 2022, compensation expense related to stock options vested amounted to approximately ~~$10,000~~$15,000 and ~~$5,000,~~$5,000, respectively. For the ~~six~~nine and three month periods ended ~~April 30,~~July 31, 2021, compensation expense related to stock options vested amounted to approximately ~~$24,000~~$35,000 and ~~$12,000,~~$11,000, respectively. At ~~April 30,~~July 31, 2022, there was approximately ~~$20,000~~$16,000 of unrecognized compensation cost relating to outstanding non-vested stock options to be recognized over the remaining weighted average vesting period of approximately ~~1.1~~0.9 years. The aggregate intrinsic value of options vested and expected to vest and options exercisable at ~~April 30,~~July 31, 2022 was approximately ~~$1,978,000~~$1,901,000 and ~~$1,830,000,~~$1,825,000, respectively.

On September 4, 2014, the Board approved amendments, effective November 1, 2014, to the FREIT Deferred Fee Plan for its executive officers and directors, one of which provides for the issuance of share units payable in FREIT shares in respect of (i) deferred amounts of all director fees on a prospective basis; (ii) interest on director fees deferred prior to November 1, 2014 (payable at a floating rate, adjusted quarterly, based on the average ~~10-year~~10-year Treasury Bond interest rate plus 150 basis points); and (iii) dividends payable in respect of share units allocated to participants in the Deferred Fee Plan as a result of deferrals described above. The number of share units credited to a participant’s account will be determined by the closing price of FREIT shares on the date as set forth in the Deferred Fee Plan.

On November 4, 2021 (the “Adoption Date”), the Board approved the termination of the Deferred Fee Plan resulting in the termination of the deferral of fees on December 31, 2021 with any subsequent fees earned by a participant being paid in cash. Consistent with the termination of the Deferred Fee Plan, payment related to each participant’s cash account (in the form of a cash lump sum payment) and share unit account (in the form of the issuance of common stock) must be made to each participant no earlier than twelve (12) months and one day after, and no later than twenty-four (24) months, after the Adoption Date. Any interest earned on the participant’s cash account along with dividends (if any) earned on share units, will continue to accrue in share units on each participant’s account until final payment is made.

For the ~~six month~~nine-month periods ended ~~April 30,~~July 31, 2022 and 2021, the aggregate amounts of deferred director fees together with related interest and dividends were approximately ~~$100,500~~$126,600 and ~~$230,600,~~$356,000, respectively, which have been paid through the issuance of ~~4,080~~5,163 and ~~13,233~~20,328 vested FREIT share units, respectively, based on the closing price of FREIT shares on the dates as set forth in the Deferred Fee Plan.

For the ~~six-month~~nine-month periods ended ~~April 30,~~July 31, 2022 and 2021, FREIT has charged as expense approximately ~~$65,200~~$91,300 and ~~$214,600,~~$332,000, respectively, representing deferred director fees and interest, and the balance of approximately ~~$35,300~~$35,300 and ~~$16,000,~~$24,000, respectively, representing dividends payable in respect of share units allocated to Plan participants, has been charged to equity.

The Deferred Fee Plan, as amended, provides that cumulative fees together with accrued interest deferred as of November 1, 2014 would be paid in a lump sum or in annual installments over a period not to exceed 10 years, at the election of the participant. As of ~~April 30,~~July 31, 2022 and October 31, 2021, approximately ~~$1,366,000~~$1,366,000 and ~~$1,454,000,~~$1,454,000, respectively, of fees has been deferred together with accrued interest of approximately ~~$951,000~~$951,000 and ~~$1,021,000,~~$1,021,000, respectively.

Fixed lease income under our commercial operating leases generally includes fixed minimum lease consideration, which is accrued on a straight-line basis over the terms of the leases. Variable lease income includes consideration based on sales, as well as reimbursements for real estate taxes, maintenance, insurance and certain other operating expenses of the properties.

Minimum fixed lease consideration (in thousands of dollars) under non-cancelable tenant operating leases for each of the next five years and thereafter, excluding variable lease consideration and rents from tenants for which collectability is deemed to be constrained, for the years ending October 31, as of ~~April 30,~~July 31, 2022, is as follows:

Year Ending October 31,	Amount		Amount
2022*	$	5,740	$	5,723
2023		5,647		5,608
2024		4,541		4,556
2025		3,827		3,850
2026		3,077		3,081
Thereafter		4,526		4,583
Total	$	27,358	$	27,401

* Amount represents full fiscal year and excludes rents from the Rotunda Property, the Westridge Square Property and the Damascus Property which were sold on December 30, 2021, January 7, 2022 and January 10, 2022, respectively.

The above amounts assume that all leases which expire are not renewed and, accordingly, neither month-to-month nor rentals from replacement tenants are included.

Minimum future rentals do not include contingent rentals, which may be received under certain leases on the basis of percentage of reported tenants' sales volume. Rental income that is contingent on future events is not included in income until the contingency is resolved. Contingent rentals included in income for the ~~six~~nine and ~~three month~~three-month periods ended ~~April 30,~~July 31, 2022 and 2021 were not material.

The ~~international spread of COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020. Beginning in March 2020 and throughout most of 2020, many states~~Company continues to monitor changes in the U.S., including New Jersey, New York and Maryland, where our properties were located, implemented stay-at-home and shut down orders for all "non-essential" business and activity in an aggressive effort to mitigatecollectability assessment of its tenant receivables resulting from the spread of COVID-19. Over the past year, vaccinations for the COVID-19 virus were widely distributed among the general U.S. population which resulted in loosened restrictions previously mandated on our tenants identified as nonessential. However, the potential emergence of vaccine-resistant variants of COVID-19 could trigger restrictions to be put back in place. Such restrictions may include mandatory business shut-downs, reduced business operations and social distancing requirements. As the impact of the pandemic evolves, it continues to cause uncertainty and volatility in the financial markets. The COVID-19 pandemic and the actions taken by individuals, businesses and government authorities to reduce its spread have caused substantial lost business revenue, changes in consumer behavior and large reductions in liquidity and fair value of many assets.

~~Despite~~lingering effects that the COVID-19 pandemic and preventive measures taken to mitigate the spread our residential properties have continued to generate cash flow. At our commercial properties, with the exception of grocery stores and other "essential" businesses, many of our retail tenants were adversely affected by the previously mandated shut downs and the continued lingering impact to consumer sentiment and preferences for safety amid the reemergence of other COVID-19 variants. The Company continues to closely monitor changes in the collectability assessmenthad on some of its ~~tenant receivables.~~commercial tenants. For the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022, rental revenue deemed uncollectible of approximately ~~$0.4~~$0.5 million and ~~$0.3~~$0.4 million (with a consolidated impact to FREIT of approximately ~~$0.2~~$0.3 million and ~~$0.2~~$0.1 million), respectively, was classified as a reduction in rental revenue based on our assessment of the probability of collecting substantially all of the remaining rents for certain tenants. For the ~~six~~nine and three months ended ~~April 30,~~July 31, 2021, rental revenue deemed uncollectible of approximately ~~$0.9~~$1.2 million and ~~$0.3~~$0.3 million (with a consolidated impact to FREIT of approximately ~~$0.6~~$0.7 million and ~~$0.2~~$0.1 million), respectively, was classified as a reduction in rental revenue based on our assessment of the probability of collecting substantially all of the remaining rents for certain tenants. During the period beginning March 2020 through October 31, 2021, FREIT has applied, net of amounts subsequently paid back by tenants, an aggregate of approximately ~~$397,000~~$397,000 of security deposits from its commercial tenants to outstanding receivables due. For the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022, there were no security deposits from its commercial tenants applied to outstanding receivables due. On a case by case basis, FREIT has offered rent abatements totaling approximately ~~$9,000~~$9,000 and $0$0 (with a consolidated impact to FREIT of approximately ~~$9,000~~$9,000 and ~~$0)~~$0) for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022, respectively, and ~~$101,000~~$135,000 and ~~$51,000~~$34,000 (with a consolidated impact to FREIT of approximately ~~$71,000~~$91,000 and ~~$40,000)~~$20,000) for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2021, respectively. There were no significant deferrals of rent over a specified time period offered to its commercial tenants for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022 and 2021. FREIT currently remains in active discussions and negotiations with these impacted retail tenants.

On August 4, 2022, FREIT’s Board declared a special, extraordinary, non-recurring cash distribution of approximately $51.5 million, or $7.50 per share, which was paid on August 30, 2022, ~~we have experienced a positive cash flow from operations with cash provided by operations~~to stockholders of ~~approximately $2.9 million.~~record on August 16, 2022 (with an ex-dividend date of August 31, 2022). This ~~could change based on the duration~~distribution represents most of the ~~pandemic, which is uncertain. We believe that our~~after-tax proceeds of FREIT’s extraordinary sale of its portfolio of Maryland properties. On August 4, 2022, in connection with the Board’s approval of the special, extraordinary, non-recurring cash ~~balance as~~distribution (“Extraordinary Distribution”), the Compensation Committee of ~~April 30, 2022 of approximately $95.7 million coupled with a $13 million available line of credit (available through October 31, 2023, see Note 9)~~the Board recommended and the Board approved that (i) the option exercise price of options outstanding under the Plan be adjusted, by reason of the Extraordinary Distribution, in accordance with the terms of the Plan; and (ii) the exercise price of options outstanding under the Plan should be reduced by an amount equal to the excess, if any, of (x) the average of the closing price of FREIT’s shares, as reported by Yahoo Finance, for each business day during the period of five (5) business days prior to the ex-dividend date relating to the Extraordinary Distribution (August 31, 2022), over (y) the average of the closing price of FREIT’s shares, as reported by Yahoo Finance, for each business day during the period of five (5) business days following the ex-dividend date relating to the Extraordinary Distribution. (See Note 7 for additional ~~$7.5 million~~details.) On September 9, 2022, the Board determined that the amount of the reduction in ~~funds available~~exercise price for options outstanding under the Plan is $7.50 per share. In addition, $18.68 per share will be used as the share price for determining the number of share units to be ~~drawn upon on~~distributed to participants in the ~~Boulders loan (See Note 9 for additional details). This cash and available cash will provide us~~Deferred Fee Plan in connection with ~~sufficient liquidity for at least~~ the next twelve months from the filing of this quarterly report on Form 10-Q including, partial or full payment of the Wayne PSC loan should we be unable to resolve the Wayne PSC covenant non-compliance and the bank exercises its remedies under the loan agreement, and after giving consideration to the dividends we may need to distribute over this period to maintain our status as a REIT.

The extent of the effects of COVID-19 on our business, results of operations, cash flows, value of our real estate assets and growth prospects is highly uncertain and will ultimately depend on future developments, none of which can be predicted with any certainty.Extraordinary Distribution.

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

FREIT is an equity real estate investment trust (“REIT”) that is self-administered and externally managed. FREIT owns a portfolio of residential apartment and commercial properties. FREIT’s revenues consist primarily of rental income and other related revenues from its residential and commercial properties and additional rents derived from operating commercial properties. FREIT’s properties are primarily located in northern New Jersey and New York.

On November 22, 2021, certain affiliates (the “Maryland Sellers”) of FREIT entered into a Purchase and Sale Agreement (the “Maryland Purchase and Sale Agreement”) with MCB Acquisition Company, LLC (the “Maryland Purchaser”), a third party, pursuant to which the Maryland Sellers agreed to sell three properties to the Maryland Purchaser. The properties consisted of retail and office space and a residential apartment community owned by Grande Rotunda, LLC (the “Rotunda Property”), a shopping center owned by Damascus Centre, LLC (the “Damascus Property”), and a shopping center owned by WestFREIT Corp. (the “Westridge Square Property”). FREIT owns 100% of its subsidiary, WestFREIT Corp. (“(��WestFREIT”), a 60% interest in Grande Rotunda, LLC (“Grande Rotunda”), the joint venture that owned the Rotunda Property, and a 70% interest in Damascus Centre, LLC (“Damascus Centre”), the joint venture that owned the Damascus Property.

The original purchase price for the Rotunda Property, the Damascus Property and the Westridge Square Property (collectively the “Maryland Properties”) under the Maryland Purchase and Sale Agreement was reduced by $2,723,000 from $267,000,000 to $248,750,269, after giving effect to the $15,526,731 escrow deposit described below. This reduction in the sales price of $2,723,000 was to account for improvements and repairs to the Maryland Properties and miscellaneous items identified by the Maryland Purchaser in the course of its due diligence inspection. Additionally, the Maryland Purchaser was obligated under the Maryland Purchase and Sale Agreement to deposit a total of $15,526,731 in escrow with respect to certain leases at the Maryland Properties, which have not been executed or where the rent commencement date has not occurred or economic obligations of the Maryland Sellers under certain leases remain unpaid. Although there can be no assurance, a portion of the $15,526,731 escrow deposit (the “Maryland Purchaser Escrow Payment”) may be paid to the Maryland Sellers depending upon the outcome of construction and leasing activities at the Maryland Properties. The Maryland Purchaser Escrow Payment Agreement provides for among other things, monthly disbursements from escrow to the Maryland Purchaser related to the aforementioned tenant lease agreements until the earlier of (i) the rent commencement date of the respective tenant lease agreements or (ii) 5-years from the date of the agreement. Release

and amounts of escrowed funds to FREIT, generally, is contingent on the success and timing of future leasing activities at the Maryland Properties.

The sale of the Maryland Properties having a total net book value of $172.2 million, was consummated by the Maryland Sellers and the Maryland Purchaser for a purchase price of $248,750,269, after giving effect to the $15,526,731 Maryland Purchaser Escrow Payment. This sale resulted in net proceeds of approximately $53.9 million (inclusive of approximately $1.9 million in funds released from the Maryland Purchaser Escrow Payment during the second quarter of Fiscal 2022), after payment of related mortgage debt in the amount of $155.8 million and the corresponding swap breakage fees of approximately $213,000 related to the early termination of the interest rate swap contracts on the Damascus Property loan, payment of loans (including interest) to each of the partners in Grande Rotunda in the amount of approximately $31 million and certain transactional expenses and transfer taxes including brokerage fees due to Hekemian & Co. of approximately $6.2 million. As of ~~April 30,~~July 31, 2022, approximately $1,946,000 of ~~these funds have~~the Maryland Purchaser Escrow Payment has been released from escrow to the Maryland Sellers. The escrow and related gain on sale were reduced by approximately $1.2 million due to a change in estimate in the second quarter of Fiscal 2022 related to a change in the timing of anticipated rent commencement dates for certain tenants, which will reduce the escrowed funds available to be released to Grande Rotunda. Approximately $6.3 million of remaining funds are held in a post-closing escrow for rents anticipated to be fully released in Fiscal 2023 and are included in “Funds held in post-closing escrow” on the accompanying condensed consolidated balance sheet as of ~~April 30,~~July 31, 2022. The sale of the Maryland Properties resulted in a net gain of approximately $68.8 million (as adjusted) (with a consolidated impact to FREIT of approximately $45.6 million) which includes approximately $8.2 million of proceeds released and anticipated to be released from funds held in escrow, a write-off of the straight-line rent receivable of approximately $2.9 million and a write-off of unamortized lease commissions of approximately $1.7 million.

On August 4, 2022, FREIT’s Board of Directors (“Board”) declared a special, extraordinary, non-recurring cash distribution of approximately $51.5 million, or $7.50 per share, which was paid on August 30, 2022, to stockholders of record on August 16, 2022 (with an ex-dividend date of August 31, 2022). This distribution represents most of the after-tax proceeds of FREIT’s extraordinary sale of its portfolio of Maryland properties.

See Note 7 to FREIT’s condensed consolidated financial statements for additional details on the sale of ~~these three~~the Maryland properties.

~~COVID-19 Pandemic~~The economic and financial environment: The international spread of COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020. Beginning in March 2020 and throughout most of 2020, many states in the U.S., including New Jersey, New York and Maryland, where our properties were located, implemented stay-at-home and shut down orders for all "non-essential" business and activity in an aggressive effort to mitigate the spread of COVID-19. Over the past year, vaccinations for the COVID-19 virus were widely distributed among the general U.S. population which resulted in loosened restrictions previously mandated on our tenants identified as nonessential. However, the potential emergence of vaccine-resistant variants of COVID-19 could trigger restrictions to be put back in place. Such restrictions may include mandatory business shut-downs, reduced business operations and social distancing requirements. The COVID-19 pandemic and the actions taken by individuals, businesses and government authorities to reduce its spread have caused substantial lost business revenue, changes in consumer behavior and large reductions in liquidity and fair value of many assets.

As the impact of the pandemic evolves, it continues to cause uncertainty and volatility in the financial markets. Many U.S. industries and businesses were negatively affected and millions of people filed for unemployment resulting in the U.S. unemployment rate ~~rising to 14.7% in April 2020,~~is 3.5% as of July 2022, which ~~was~~is the ~~highest recorded rate~~lowest since the ~~Great Depression. Since April 2020,~~onset of the ~~U.S unemployment rate has declined to 3.6% as of April 2022. However, the~~COVID-19 pandemic in February 2020. The annual inflation rate in the U.S. ~~has accelerated to 8.3%~~still remains high at 8.5% in ~~April~~July 2022, which is the highest since ~~1982,~~the 1980’s, which is primarily driven by soaring food prices and energy costs, labor shortages and supply disruptions.

Despite the COVID-19 pandemic and preventive measures taken to mitigate the spread, our residential properties continued to generate cash flow. At our commercial properties, with the exception of grocery stores and other "essential" businesses, many of our retail tenants were adversely affected by the previously mandated shut downs and the continued lingering impact to consumer sentiment and preferences for safety amid the reemergence of other COVID-19 variants. The ~~Company~~Federal Reserve continues to ~~closely monitor changes~~raise interest rates, which has led to uncertainties in the ~~collectability assessment of its tenant receivables. For the six~~financing market and ~~three months ended April 30, 2022, rental revenue deemed uncollectible of approximately $0.4 million and $0.3 million (with~~ a consolidated impact to FREIT of approximately $0.2 million and $0.2 million), respectively, was classified as a reduction in rental revenue based on our assessment of the probability of collecting substantially all of the remaining rents for certain tenants. For the six and three months ended April 30, 2021, rental revenue deemed uncollectible of approximately $0.9 million and $0.3 million (with a consolidated impact to FREIT of approximately $0.6 million and $0.2 million), respectively, was classified as a reduction in rental revenue based on our assessment of the probability of collecting substantially all of the remaining rents for certain tenants. During the period beginning March 2020 through October 31, 2021, FREIT has applied, net of amounts subsequently paid back by tenants, an aggregate of approximately $397,000 of security deposits from its commercial tenants to outstanding receivables due. For the six and three months ended April 30, 2022, there were no security deposits from its commercial tenants applied to outstanding receivables due. On a case by case basis, FREIT has offered rent abatements totaling approximately $9,000 and $0 (with a consolidated impact to FREIT of approximately $9,000 and $0) for the six and three months ended April 30, 2022, respectively, and $101,000 and $51,000 (with a consolidated impact to FREIT of approximately $71,000 and $40,000) for the six and three months ended April 30, 2021, respectively. There were no significant deferrals of rent over a specified time period offered to its commercial tenants for the six and three months ended April 30, 2022 and 2021. FREIT currently remains in active discussions and negotiations with these impacted retail tenants.

For the six months ended April 30, 2022, we have experienced a positive cash flow from operations with cash provided by operations of approximately $2.9 million. This could change based on the duration of the pandemic, which is uncertain. We believe that our cash balance as of April 30, 2022 of approximately $95.7 million coupled with a $13 million available line of credit (available through October 31, 2023, see Note 9 to FREIT’s condensed consolidated financial statements for further details) and the additional $7.5 million in funds available to be drawn upon on the Boulders loan (See Note 9 to FREIT’s condensed consolidated financial statements for further details). This cash and available cash will provide us with sufficient liquidity for at least the next twelve months from the filing of this quarterly report on Form 10-Q including, partial or full repayment of the Wayne PSC loan should we be unable to resolve the Wayne PSC covenant non-compliance and the bank exercises its remedies under the loan agreement, and after giving consideration to the dividends we may need to distribute over this period to maintain our status as a REIT.

Residential Properties: ~~While our~~Our residential properties continue to generate positive cash flow while average rents on turned units (apartments which were vacated and then re-leased to new tenants) from 2021 to 2022 continues to increase across the portfolio. Additionally, the rate of increase on renewals for existing tenants has also been robust. Should this trend continue, we believe the increase will contribute meaningfully to FREIT’s income over time. However, it is uncertain what impact ~~COVID-19,~~ the significant rise in inflation and rising interest rates may have on these properties over the next ~~year is uncertain.~~year.

Commercial Properties: ~~There continues to be uncertainty~~While our retail properties have stabilized form the impact of the COVID-19 pandemic, certain of our properties still have not attained pre pandemic operating levels despite some recovery in ~~the retail environment that could have an adverse impact on FREIT’s retail tenants, which could have an adverse impact on FREIT. The impact COVID-19,~~brick and mortar retail. Additionally, the significant rise in inflation and rising interest rates ~~may~~could have an impact on the operating and financial performance of our commercial ~~properties is currently uncertain.~~properties.

Debt Financing Availability: Financing has been available to FREIT and its affiliates. (See Note 6 to FREIT’s condensed consolidated financial ~~statements).~~statements.)

On July 22, 2022, Wayne PSC, LLC refinanced its $22.1 million loan (inclusive of deferred interest of approximately $136,000), which would have matured on October 1, 2026, on its Preakness Shopping center located in Wayne, New Jersey with a new loan held by ConnectOne Bank in the amount of $25,000,000. This loan is interest-only based on a fixed interest rate of 5% and has a term of three years with a maturity date of August 1, 2025. Additionally, an interest reserve escrow was established at closing representing twelve months of interest of $1,250,000, which can be used to pay monthly interest on this loan with a requirement to replenish the escrow account back to $1,250,000 when the balance in the escrow account is reduced to three months of interest. This refinancing resulted in (i) annual debt service savings of approximately $340,000 due to interest-only payments; (ii) an increase in the interest rate from a fixed interest rate of 3.625% to a fixed interest rate of 5%; and (iii) net refinancing proceeds of approximately $1.1 million which can be used for capital expenditures and general corporate purposes. As part of the refinancing, Wayne PSC terminated the interest rate swap contract on the underlying loan resulting in a realized gain on the swap breakage of approximately $1.4 million, which has been recorded as a realized gain on the accompanying condensed consolidated statements of income for the nine and three months ended July 31, 2022. (See Note 4 to FREIT’s condensed consolidated financial statements for additional details.)

On December 30, 2021, FREIT refinanced its $14.4 million loan (which would have matured on February 1, 2022) on its Boulders property located in Rockaway, New Jersey with a new loan held by ConnectOne Bank in the amount of $7,500,000, with additional funding available to be drawn upon in the amount of $7,500,000 for corporate needs. This loan is interest-only and has a maturity date of January 1, 2024 with the option of FREIT to extend for one year from the maturity date, subject to certain provisions of the loan agreement. This refinancing will provide annual debt service savings of approximately $1,173,000 as a result of the reduction in the principal amount, a reduction in the annual interest rate from a fixed rate of 5.37% to a fixed rate of 2.85% and interest-only payments being required under this new loan.

Operating Cash Flow: FREIT expects that cash provided by operating activities and cash reserves will be adequate to cover mandatory debt service payments (including payments of interest, but excluding balloon payments which are expected to be refinanced and/or extended), real estate taxes, recurring capital improvements at its properties and other needs to maintain its status as a REIT for at least a period of one year from the date of filing of this quarterly report on Form 10-Q.

Pursuant to the SEC disclosure guidance for "Critical Accounting Policies," the SEC defines Critical Accounting Policies as those that require the application of management's most difficult, subjective, or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, the preparation of which takes into account estimates based on judgments and assumptions that affect certain amounts and disclosures. Accordingly, actual results could differ from these estimates. The accounting policies and estimates used, which are outlined in Note 1 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021, have been applied consistently as of ~~April 30,~~July 31, 2022, and for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022 and 2021. We believe that the following accounting policies or estimates require the application of management's most difficult, subjective, or complex judgments.

Revenue Recognition: Base rents, additional rents based on tenants' sales volume and reimbursement of the tenants' share of certain operating expenses are generally recognized when due from tenants. The straight-line basis is used to recognize base rents under leases if they provide for varying rents over the lease terms. Straight-line rents receivable represent unbilled rents receivable to the extent straight-line rents exceed current rents billed in accordance with lease agreements. Before FREIT can recognize revenue, it is required to assess, among other things, its collectability.

Valuation of Long-Lived Assets: FREIT assesses the carrying value of long-lived assets periodically, or whenever events or changes in circumstances indicate that the carrying amounts of certain assets may not be recoverable. When FREIT determines that the carrying value of long-lived assets may be impaired, the measurement of any impairment is based on a projected discounted cash flow method determined by FREIT's management. While FREIT believes that our discounted cash flow methods are reasonable, different assumptions regarding such cash flows may significantly affect the measurement of impairment.

Real Estate Development Costs: It is FREIT’s policy to capitalize pre-development costs, which generally include legal and professional fees and other directly related third-party costs. Real estate taxes and interest costs incurred during the development and construction phases are also capitalized. FREIT ceases capitalization of these costs when the project or portion thereof becomes operational, or when construction has been postponed. In the event of postponement, capitalization of these costs will recommence once construction on the project resumes.

See Note 2 to FREIT’s condensed consolidated financial statements for recently issued accounting standards.

Real estate revenue for the ~~six~~nine months ended ~~April 30,~~July 31, 2022 (“Current ~~Six~~Nine Months”) decreased ~~32.5%~~36.4% to ~~$17,264,000,~~$24,223,000, compared to ~~$25,558,000~~$38,100,000 for the ~~six~~nine months ended ~~April 30,~~July 31, 2021 (“Prior Year’s ~~Six~~Nine Months”). For the three months ended ~~April 30,~~July 31, 2022 (“Current Quarter”) real estate revenue decreased ~~48.3%~~44.5% to ~~$6,615,000,~~$6,959,000, compared to ~~$12,804,000~~$12,542,000 for the three months ended ~~April 30,~~July 31, 2021 (“Prior Year’s Quarter”).

The decrease in revenue for the Current ~~Six~~Nine Months was primarily attributable to the following: (a) a decrease of approximately $8.5 million attributed to the Maryland Properties sold; (b) a decrease from the commercial segment of approximately $0.4 million, excluding the Maryland Properties sold, primarily attributed to approximately $0.2 million in rental revenue being deemed uncollectible and classified as a reduction in rental revenue in the Current Six Months and a $0.2 million decrease resulting from a decline in the average occupancy rate to 67.7% from 69.5% in the Prior Year’s Six Months; offset by (c) an increase from the residential segment of approximately $0.6 million, excluding the Icon at the Rotunda Property sold, driven by an increase in base rents across all properties and an increase in the average occupancy rate to 98.7% from 97.1% in the Prior Year’s Six Months.

~~The decrease in revenue for the Current Quarter was primarily attributable to the following: (a) a decrease of approximately $6.2~~$14.5 million attributed to the Maryland Properties sold; (b) a decrease from the commercial segment of approximately $0.3 million, excluding the Maryland Properties sold, primarily attributed to approximately $0.2 million in rental revenue being deemed uncollectible and classified as a reduction in rental revenue in the Current ~~Quarter~~Nine Months and a $0.1 million decrease resulting from a decline in the average occupancy rate to ~~66.6%~~67.1% from ~~68.8%~~69.1% in the Prior Year’s ~~Quarter;~~Nine Months; offset by (c) an increase from the residential segment of approximately $0.9 million, excluding the Icon at the Rotunda Property sold, driven by an increase in base rents across all properties and an increase in the average occupancy rate to 98.4% from 97.2% in the Prior Year’s Nine Months.

The decrease in revenue for the Current Quarter was primarily attributable to the following: (a) a decrease of approximately $6 million attributed to the Maryland Properties sold; offset by (b) an increase from the residential segment of approximately $0.3 million, excluding the Icon at the Rotunda Property sold, primarily driven by an increase in base rents across all properties and an increase in the average occupancy rate to ~~98.5%~~97.8% from ~~96.8%~~97.3% in the Prior Year’s ~~Quarter.~~Quarter; and (c) an increase from the commercial segment of approximately $0.1 million, excluding the Maryland Properties sold, primarily attributed to the recognition of revenue due to collections from a constrained tenant.

Net income ~~(loss)~~ attributable to common equity (“net ~~income (loss)-common~~income-common equity”) for the Current ~~Six~~Nine Months and Current Quarter was net income of ~~$45,425,000~~$46,546,000 ($~~6.46~~6.61 per share basic and ~~$6.40~~$6.56 per share diluted) and ~~net loss of $352,000 (($0.05)~~$1,121,000 ($0.16 per share basic and diluted), compared to ~~$567,000~~net income of $776,000 ($~~0.08~~0.11 per share basic and diluted) and ~~$9,000~~$209,000 ($~~0.00~~0.03 per share basic and diluted), for the Prior Year’s comparable periods, respectively.

The schedule below provides a detailed analysis of the major changes that impacted net ~~income (loss)-common~~income-common equity for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022 and 2021:

The condensed consolidated results of operations for the Current ~~Six~~Nine Months and 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~~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.

Adjusted net (loss) income for the Current ~~Six~~Nine Months and Current Quarter was net loss of ~~$619,000~~$220,000 (($~~0.09)~~0.03) per share basic and diluted) and net income of ~~$231,000~~$399,000 ($~~0.03~~0.06 per share basic and diluted), compared to net income of ~~$716,000~~$1,032,000 ($~~0.10~~0.15 per share basic and diluted) and ~~net loss of $63,000 (($0.01)~~$316,000 ($0.05 per share basic and diluted), for the Prior Year’s comparable periods. Adjusted net (loss) income is a non-GAAP measure, which management believes is a useful and meaningful gauge to investors of our operating performance, since it excludes the impact of unusual and infrequent items specifically: a gain on sale of Maryland properties in Fiscal 2022; a realized gain on the Wayne PSC interest rate swap contract termination in Fiscal 2022.

The decrease in adjusted net income for the Current ~~Six~~Nine Months was primarily driven by the following: (a) a decrease of approximately ~~$2.4~~$3.5 million (with a consolidated impact to FREIT of approximately ~~$1.7~~$2.5 million) attributed to the Maryland Properties sold; offset by (b) a decrease in general and administrative expenses (“G&A”) of approximately ~~$0.5~~$1 million primarily driven by reincorporation expenses ~~in the amount~~ of approximately ~~$0.4~~$0.5 million incurred in the Prior Year’s ~~Six~~Nine Months and a decline in legal costs ~~in the amount~~ of approximately ~~$0.2~~$0.6 million primarily attributed to the legal proceeding between FREIT and certain of its affiliates and Sinatra Properties, LLC; (c) an increase in revenue of approximately $0.6 million (with a consolidated impact to FREIT of approximately $0.7 million), excluding the Maryland Properties sold; (d) a decrease in interest expense of approximately ~~$0.2~~$0.3 million attributed to the refinancing of the loan on the Boulders property in the Current ~~Six~~Nine Months resulting in a reduction in the interest rate and principal balance of the loan; ~~(d)~~(e) a decrease in the reserve for uncollectible rents of approximately $0.3 million (with a consolidated impact to FREIT of approximately $0.2 million), excluding the Maryland Properties sold, primarily due to rental revenue being deemed uncollectible and classified as a reduction in rental revenue in the Current ~~Six~~Nine Months; and ~~(e) an increase~~(f) a decrease in ~~revenue~~loss on investment in tenancy-in-common of approximately $0.2 ~~million (with a consolidated impact to FREIT of approximately $0.3 million), excluding the Maryland Properties sold.~~million.

The increase in adjusted net income for the Current Quarter was primarily driven by the following: (a) a decrease in G&A of approximately ~~$0.6~~$0.5 million primarily driven by ~~reincorporation expenses in the amount of approximately $0.3 million incurred in the Prior Year’s Quarter and~~ a decline in legal costs ~~in the amount of approximately $0.3 million~~ attributed to the legal proceeding between FREIT and certain of its affiliates and Sinatra Properties, LLC; (b) a decrease in ~~the reserve for uncollectible rents~~loss on investment in tenancy-in-common of approximately ~~$0.3~~$0.2 million; (c) a decrease in repairs and maintenance of approximately $0.1 million (with a consolidated impact to FREIT of approximately ~~$0.2~~$0.1 million), excluding the Maryland Properties sold, primarily due to rental revenue being deemed uncollectible and classified as a reduction in rental revenue in the Current Quarter; (c) a decline in snow removal costs of approximately $0.3 million (with a consolidated impact to FREIT of approximately $0.2 million), excluding the Maryland Properties sold;; (d) a decrease in interest expense of approximately $0.1 million attributed to the refinancing of the loan on the Boulders property resulting in a reduction in the interest rate and principal balance of the loan; and (e) ~~a decrease~~an increase in ~~loss on~~ investment ~~in tenancy-in-common~~income of approximately $0.1 ~~million;~~million resulting from a higher interest rate and cash balance in Fiscal 2022 due to the sale of the Maryland Properties; offset by (f) a decrease of approximately $1 million (with a consolidated impact to FREIT of approximately $0.8 million) attributed to the Maryland Properties sold. (Refer to the segment disclosure below for a more detailed discussion of the financial performance of FREIT’s commercial and residential segments.)

The following tables set forth comparative net operating income ("NOI") data for FREIT’s real estate segments and reconciles the NOI to condensed consolidated net ~~income (loss)-common~~income-common equity for the Current ~~Six~~Nine Months and Current Quarter as compared to the Prior Year’s comparable periods (see below for definition of NOI):


	Commercial									Residential									Combined						Commercial									Residential									Combined
	Six Months Ended									Six Months Ended									Six Months Ended						Nine Months Ended									Nine Months Ended									Nine Months Ended
	April 30,				Increase (Decrease)					April 30,				Increase (Decrease)					April 30,						July 31,				Increase (Decrease)					July 31,				Increase (Decrease)					July 31,
	2022		2021		$			%		2022		2021		$			%		2022			2021			2022		2021		$			%		2022		2021		$			%		2022		2021
	(In Thousands)									(In Thousands)									(In Thousands)						(In Thousands)									(In Thousands)									(In Thousands)
Rental income	$	5,006	$	8,987	$	(3,981	)		-44.3%	$	10,833	$	13,141	$	(2,308	)		-17.6%	$	15,839		$	22,128		$	6,624	$	13,410	$	(6,786	)		-50.6%	$	15,496	$	19,686	$	(4,190	)		-21.3%	$	22,120	$	33,096
Reimbursements		1,232		3,119		(1,887	)		-60.5%		23		78		(55	)		-70.5%		1,255			3,197			1,793		4,544		(2,751	)		-60.5%		20		123		(103	)		-83.7%		1,813		4,667
Other		28		308		(280	)		-90.9%		203		138		65			47.1%		231			446			28		345		(317	)		-91.9%		287		217		70			32.3%		315		562
Total revenue		6,266		12,414		(6,148	)		-49.5%		11,059		13,357		(2,298	)		-17.2%		17,325			25,771			8,445		18,299		(9,854	)		-53.8%		15,803		20,026		(4,223	)		-21.1%		24,248		38,325
Operating expenses		3,919		5,811		(1,892	)		-32.6%		4,687		5,390		(703	)		-13.0%		8,606			11,201			5,146		8,346		(3,200	)		-38.3%		6,788		8,232		(1,444	)		-17.5%		11,934		16,578
Net operating income	$	2,347	$	6,603	$	(4,256	)		-64.5%	$	6,372	$	7,967	$	(1,595	)		-20.0%		8,719			14,570		$	3,299	$	9,953	$	(6,654	)		-66.9%	$	9,015	$	11,794	$	(2,779	)		-23.6%		12,314		21,747

Average Occupancy % *		67.7%		69.5%					-1.8%		98.7%		97.1%					1.6%								67.1%		69.1%					-2.0%		98.4%		97.2%					1.2%

						Reconciliation to condensed consolidated net income-common equity:
						Deferred rents - straight lining														(61	)		(213	)
						Investment income														64			59
						General and administrative expenses														(2,196	)		(2,730	)
						Loss on investment in tenancy-in-common														(156	)		(145	)
						Depreciation														(2,534	)		(4,633	)
						Net gain on sale of Maryland properties														68,771			—
						Financing costs														(4,455	)		(6,192	)
						Net income														68,152			716
						Net income attributable to noncontrolling interests in subsidiaries														(22,727	)		(149	)
						Net income attributable to common equity													$	45,425		$	567

NOI is based on operating revenue and expenses directly associated with the operations of the real estate properties, but excludes deferred rents (straight lining), depreciation, financing costs and other items. FREIT assesses and measures segment operating results based on NOI.

Same Property NOI: FREIT considers same property net operating income (“Same Property NOI”) to be a useful supplemental non-GAAP measure of its operating performance. FREIT defines same property within both the commercial and residential segments to be those properties that FREIT has owned and operated for both the current and prior periods presented, excluding those properties that FREIT acquired, sold or redeveloped during those periods. Any newly acquired property that has been in operation for less than

a year, any property that is undergoing a major redevelopment but may still be in operation at less than full capacity, and/or any property that has been sold is not considered same property.

NOI and Same Property NOI are non-GAAP financial measures and are not measures of operating results or cash flow as measured by GAAP, and are not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity.

The commercial segment contains five (5) separate properties, excluding the Rotunda Property, the Westridge Square Property and the Damascus Property, which were sold on December 30, 2021, January 7, 2022 and January 10, 2022, respectively. Three of these properties are multi-tenanted retail centers, one is a single tenanted retail center located in Glen Rock, New Jersey and one is single tenanted on land located in Rockaway, New Jersey owned by FREIT from which it receives monthly rental income from a tenant who has built and operates a bank branch on the land. (See Note 7 to FREIT’s condensed consolidated financial statements for additional details on the sale of ~~these three~~the Maryland properties.)

As indicated in the ~~table~~tables above under the caption Segment Information, total revenue from FREIT’s commercial segment for the Current ~~Six~~Nine Months and Current Quarter decreased by ~~49.5%~~53.8% and ~~67.9%~~63%, respectively, and NOI decreased by ~~64.5%~~66.9% and ~~75.3%~~71.6%, respectively, as compared to the Prior Year’s comparable periods. Average occupancy for all commercial properties, excluding the Maryland properties sold, for the Current ~~Six~~Nine Months and Current Quarter decreased by ~~1.8%~~2% and ~~2.2%~~2.4%, respectively, as compared to the Prior Year’s comparable periods.

The decline in revenue for the Current ~~Six~~Nine Months was primarily attributable to the following: (a) a decrease of approximately ~~$5.7~~$9.5 million (excluding an increase in the straight-line rent receivable of approximately $0.1 million) attributed to the Maryland Properties sold; and (b) a decrease of approximately $0.4 million, excluding the Maryland Properties sold, primarily attributed to rental revenue being deemed uncollectible and classified as a reduction in rental revenue in the Current ~~Six~~Nine Months and a decline in the average occupancy rate to ~~67.7%~~67.1% from ~~69.5%~~69.1% in the Prior Year’s ~~Six~~Nine Months. The decrease in NOI for the Current ~~Six~~Nine Months was primarily attributable to the following: (a) a decrease of approximately ~~$4.1~~$6.6 million attributed to the Maryland Properties sold; (b) a decline in revenue of approximately $0.4 million, excluding the Maryland Properties ~~sold, as explained above;~~sold; offset by (c) a decline in snow removal costs of approximately $0.1 million, excluding the Maryland Properties sold; and (d) a decrease in the reserve for uncollectible rents of approximately ~~$0.2~~$0.1 million, excluding the Maryland Properties sold, primarily due to rental revenue being deemed uncollectible and classified as a reduction in rental revenue in the Current ~~Six~~Nine Months.

The decline in revenue for the Current Quarter was primarily attributable to the ~~following: (a) a decrease of approximately $3.9 million attributed to the~~ Maryland Properties sold; and (b) a decrease of approximately $0.3 million, excluding the Maryland Properties sold, primarily attributed to rental revenue being deemed uncollectible and classified as a reduction in rental revenue in the Current Quarter and a decline in the average occupancy rate to 66.6% from 68.8% in the Prior Year’s Quarter.sold. The decrease in NOI for the Current Quarter was primarily attributable to the following: (a) a decrease of approximately ~~$2.3~~$2.5 million attributed to the Maryland Properties sold; (b) ~~a decline in revenue of approximately $0.3 million, excluding the Maryland Properties sold, as explained above; offset by (c) a decrease~~an increase in the reserve for uncollectible rents of approximately ~~$0.2~~$0.1 million, excluding the Maryland Properties ~~sold, primarily due to rental revenue being deemed uncollectible and classified as a reduction in rental revenue in the Current Quarter; and (d)~~sold; offset by (c) a decline in ~~snow removal~~repairs and maintenance costs of approximately ~~$0.2~~$0.1 million, excluding the Maryland Properties sold.

Same Property Operating Results: FREIT’s commercial segment currently contains five (5) same properties. (See definition of same property under Segment Information above.) The Rotunda property, the Westridge Square Property and the Damascus Property were excluded from same property results for all periods presented because these properties were sold in the Current ~~Six~~Nine Months. Same property revenue for the Current ~~Six~~Nine Months and Current Quarter decreased by 9%5.4% and ~~11.4%~~increased by 2.4%, respectively, and same property NOI decreased by ~~6.5%~~2.2% and increased by ~~19.1%~~6.6%, respectively, as compared to the Prior Year’s comparable periods. The changes resulted from the factors discussed in the immediately preceding paragraph.

Leasing: The following table reflects leasing activity at FREIT’s commercial properties for comparable leases (leases executed for spaces in which there was a tenant at some point during the previous twelve-month period) and non-comparable leases for the Current ~~Six~~Nine Months (excluding any leases executed for the Rotunda Property, the Westridge Square Property and the Damascus Property, which were sold in the Current ~~Six~~Nine Months):

(a) These leasing costs are presented as annualized costs per square foot and are allocated uniformly over the initial lease term.

(b) This includes new tenant leases and/or modifications/extensions/renewals of existing tenant leases.

FREIT currently operates six (6) multi-family apartment buildings or complexes totaling 792 apartment units, excluding the Icon at the Rotunda Property, which was sold on December 30, 2021 (see Note 7 to FREIT’s condensed consolidated financial statements) and the Pierre Towers property, which was converted to a TIC (see Note 5 to FREIT’s condensed consolidated financial statements).

As indicated in the ~~table~~tables above under the caption Segment Information, total revenue from FREIT’s residential segment for the Current ~~Six~~Nine Months and Current Quarter decreased by ~~17.2%~~21.1% and ~~30%~~28.9%, respectively, and NOI decreased by ~~20%~~23.6% and ~~33.5%~~30.9%, respectively, as compared to the Prior Year’s comparable periods. Average occupancy for all residential properties, except the Icon property sold, for the Current ~~Six~~Nine Months and Current Quarter increased by ~~1.6%~~1.2% and ~~1.7%~~0.5%, respectively, as compared to the Prior Year’s comparable periods.

The decrease in revenue for the Current ~~Six~~Nine Months was primarily attributable to the following: (a) a decrease of approximately ~~$2.9~~$5.1 million attributed to the Icon at the Rotunda Property sold; offset by (b) an increase of approximately ~~$0.6~~$0.9 million, excluding the Icon at the Rotunda Property sold, primarily driven by an increase in base rents across all properties and an increase in the average occupancy rate to ~~98.7%~~98.4% from ~~97.1%~~97.2% in the Prior Year’s ~~Quarter.~~Nine Months. The decrease in NOI for the Current ~~Six~~Nine Months was primarily attributable to the following: (a) a decrease of approximately ~~$2.1~~$3.6 million attributed to the Icon at the Rotunda Property sold; offset by (b) an increase in revenue of approximately ~~$0.6~~$0.9 million, excluding the Icon at the Rotunda Property; and (c) a decrease in the reserve for uncollectible rents of approximately ~~$0.1~~$0.2 million, excluding the Maryland Properties sold.

The decrease in revenue for the Current Quarter was primarily attributable to the following: (a) a decrease of approximately ~~$2.3~~$2.2 million attributed to the Icon at the Rotunda Property sold; offset by (b) an increase of approximately $0.3 million, excluding the Icon at the Rotunda Property sold, primarily driven by an increase in base rents across all properties and an increase in the average occupancy rate to ~~98.5%~~97.8% from ~~96.8%~~97.3% in the Prior Year’s Quarter. The decrease in NOI for the Current Quarter was primarily attributable to the following: (a) a decrease of approximately ~~$1.7~~$1.5 million attributed to the Icon at the Rotunda Property sold; (b) an increase in the reserve for uncollectible rents of approximately $0.1 million, excluding the Maryland Properties sold; offset by ~~(b)~~(c) an increase of approximately $0.3 million in revenue, excluding the Icon at the Rotunda Property sold; (c) a decrease in the reserve for uncollectible rents of approximately $0.1 million, excluding the Maryland Properties sold; and (d) a decline in snow removal costs of approximately $0.1 million, excluding the Maryland Properties sold.

Same Property Operating Results: FREIT’s residential segment currently contains six (6) same properties. (See definition of same property under Segment Information above.) The Icon at the Rotunda property was excluded from same property results for all periods presented because this property was sold in the Current ~~Six~~Nine Months. Same property revenue for the Current ~~Six~~Nine Months and Current Quarter increased by ~~7.2%~~7.1% and ~~6.9%~~6.8%, respectively, and same property NOI increased by ~~10.4%~~11.2% and ~~13.7%~~12.7%, respectively, as compared to the Prior Year’s comparable periods. The changes resulted from the factors discussed in the immediately preceding paragraph.

FREIT’s residential revenue is principally composed of monthly apartment rental income. Total rental income is a factor of occupancy and monthly apartment rents. Monthly average residential rents, (excluding from both periods presented for comparability purposes the Icon at the Rotunda property, which was sold in the Current ~~Six~~Nine Months), at the end of the Current Quarter and the Prior Year’s Quarter were ~~$1,984~~$2,006 and ~~$1,892,~~$1,913, respectively. A 1% decline in annual average occupancy, or a 1% decline in average rents from current levels, results in an annual revenue decline of approximately ~~$189,000~~$191,000 and ~~$186,000,~~$184,000, respectively.

Capital expenditures: Since all of FREIT’s apartment communities, with the exception of the Boulders, Regency and Station Place properties, were constructed more than 25 years ago, FREIT tends to spend more in any given year on maintenance and capital improvements than may be spent on newer properties. ~~As a result of the COVID-19 global pandemic, only capital improvements deemed essential are being made at this time.~~ Funds for these capital projects are available from cash flow from the property's operations and cash reserves.

		Six Months Ended April 30,				Three Months Ended April 30,				Nine Months Ended July 31,				Three Months Ended July 31,
		2022		2021		2022		2021		2022		2021		2022		2021
		(In Thousands of Dollars)				(In Thousands of Dollars)				(In Thousands of Dollars)				(In Thousands of Dollars)
Fixed rate mortgages (a):
1st Mortgages
Existing		$	2,359	$	2,903	$	1,037	$	1,442	$	3,383	$	4,348	$	1,024	$	1,445
New			72		—		52		—		162		—		90		—
Variable rate mortgages:	��
1st Mortgages
Existing			1,217		2,581		265		1,265		1,550		3,873		333		1,292
New			—		—		—		—		—		—		—		—
Interest rate swap contracts breakage fee			213				—		—		213				—		—
Other			80		140		22		79		108		183		28		43
Total financing costs, gross			3,941		5,624		1,376		2,786		5,416		8,404		1,475		2,780
Amortization of mortgage costs			514		568		151		274		813		838		299		270
Total financing costs, net		$	4,455	$	6,192	$	1,527	$	3,060	$	6,229	$	9,242	$	1,774	$	3,050

(a) Includes the effect of interest rate swap contracts which effectively convert the floating interest rate to a fixed interest rate over the term of the loan.

Total financing costs for the Current ~~Six~~Nine Months decreased by approximately ~~$1,737,000,~~$3,013,000, or ~~28.1%~~32.6%, compared to the Prior Year’s ~~Six~~Nine Months which was primarily attributable to the following: (a) a decline of approximately ~~$1,758,000 primarily~~$3,137,000 attributed to the pay-down of the loans outstanding on the Maryland Properties sold in the Current ~~Six~~Nine Months; (b) a decrease of approximately ~~$165,000~~$278,000 attributed to the refinancing of the loan on the Boulders property in the Current ~~Six~~Nine Months resulting in a reduction in the interest rate from 5.37% to 2.85% and in the principal balance from approximately $14.4 million to $7.5 million; offset by (c) an increase of approximately $213,000 attributed to a breakage fee on the early termination of the interest rate swap contracts relating to the underlying loan ~~outstanding~~ on the Damascus property, which was repaid from the net proceeds of the sale of the Damascus property in the Current ~~Six Months.~~Nine Months; and (d) an increase of approximately $148,000 related to the write-off of deferred mortgage costs on the Wayne PSC mortgage loan previously held with People’s United Bank which was refinanced with a new lender in July of 2022.

Total financing costs for the Current Quarter decreased by approximately ~~$1,533,000,~~$1,276,000, or ~~50.1%~~41.8%, compared to the Prior Year’s Quarter which was primarily attributable to the following: (a) a decline of approximately ~~$1,399,000 primarily~~$1,377,000 attributed to the pay-down of the loans outstanding on the Maryland Properties sold; ~~and~~offset by (b) ~~a decrease~~an increase of approximately ~~$117,000 attributed~~$148,000 related to the ~~refinancing~~write-off of ~~the loan~~deferred mortgage costs on the ~~Boulders property.~~Wayne PSC mortgage loan previously held with People’s United Bank which was refinanced with a new lender in July of 2022.

(See Note 7 to FREIT’s condensed consolidated financial statements for additional details on the sale of ~~these three~~the Maryland properties.)

G&A for the Current ~~Six~~Nine Months and Current Quarter was approximately ~~$2,196,000~~$3,107,000 and ~~$869,000,~~$911,000, respectively, compared to ~~$2,730,000~~$4,143,000 and ~~$1,470,000,~~$1,413,000, respectively, for the Prior Year’s comparable periods. The primary components of G&A are legal and professional fees, directors’ fees, corporate expenses and accounting/auditing fees. The decrease in G&A for the Current ~~Six~~Nine Months was primarily driven by reincorporation expenses ~~in the amount~~ of approximately ~~$0.4~~$0.5 million incurred in the Prior Year’s ~~Six~~Nine Months and a decline in legal costs ~~in the amount~~ of approximately ~~$0.2~~$0.6 million primarily attributed to the legal proceeding between FREIT and certain of its affiliates and Sinatra Properties, LLC. The decrease in G&A for the Current Quarter was primarily driven by ~~reincorporation expenses in the amount of approximately $0.3 million incurred in the Prior Year’s Quarter and~~ a decline in legal costs ~~in the amount of approximately $0.3 million~~ attributed to the legal proceeding between FREIT and certain of its affiliates and Sinatra Properties, LLC.

Depreciation expense for the Current ~~Six~~Nine Months and Current Quarter was approximately ~~$2,534,000~~$3,257,000 and ~~$714,000,~~$723,000, respectively, compared to ~~$4,633,000~~$6,948,000 and ~~$2,338,000,~~$2,315,000, respectively, for the Prior Year’s comparable periods. The decline in depreciation expense for the Current ~~Six~~Nine Months and Current Quarter was primarily attributable the sale of the Maryland Properties. (See Note 7 to FREIT’s condensed consolidated financial statements for additional details on the sale of ~~these three~~the Maryland properties.)

Net cash provided by operating activities was approximately ~~$2.9~~$5.8 million for the Current ~~Six~~Nine Months compared to net cash provided by operating activities of approximately ~~$8.8~~$10.2 million for the Prior Year’s ~~Six~~Nine Months. FREIT expects that cash provided by operating activities and cash reserves will be adequate to cover mandatory debt service payments (including payments of interest, but excluding balloon payments which are expected to be refinanced and/or extended), real estate taxes, dividends, recurring capital improvements at its properties and other needs to maintain its status as a REIT for at least a period of one year from the date of filing of this quarterly report on Form 10-Q.

As of ~~April 30,~~July 31, 2022, FREIT had cash, cash equivalents and restricted cash totaling ~~$104~~$107.6 million, compared to $39 million at October 31, 2021. The increase in cash in the Current ~~Six~~Nine Months was primarily attributable to approximately ~~$250.8~~$250.4 million in net cash provided by investing activities including capital expenditures and ~~$2.9~~$5.8 million in net cash provided by operating activities offset by approximately ~~$188.8~~$187.6 million in net cash used in financing activities. The increase in cash of approximately ~~$64.9~~$68.6 million was primarily attributed to the following: (a) a distribution of net proceeds received from the sale of the Rotunda Property of approximately ~~$54.2~~$54.4 million (inclusive of a loan repayment from Grande Rotunda of approximately $27.7 million and repayment of secured loans receivable including accrued interest by certain members in Rotunda 100 of approximately ~~$5.1~~$5.3 million); (b) a distribution of net proceeds received from the sale of the Damascus Property of approximately $11.8 million; (c) net proceeds received from the sale of the Westridge Square Property of approximately $0.1 million; (d) anticipated funds to be released of approximately $6.3 million and funds released of approximately $1.9 million from the funds held in post-closing escrow for rents related to the sale of the Maryland Properties; (e) net proceeds received from the refinancing of the Wayne PSC loan of approximately $2.5 million; offset by ~~(e)~~(f) a loan pay-down including closing costs of approximately $7.6 million attributed to the refinancing of the loan on the Boulders property; and ~~(f)~~(g) dividends paid in the Current ~~Six~~Nine Months the amount of approximately ~~$1.4~~$2.1 million. (See Note 7 to FREIT’s condensed consolidated financial statements for additional details on the sale of ~~these three~~the Maryland properties.)

Credit Line: FREIT’s revolving line of credit provided by Provident Bank was renewed for a three-year term ending on October 31, 2023. Draws against the credit line can be used for working capital needs and standby letters of credit. Draws against the credit line are secured by mortgages on FREIT’s Franklin Crossing Shopping Center in Franklin Lakes, New Jersey and retail space in Glen

Rock, New Jersey. The total line of credit is $13 million and the interest rate on the amount outstanding is based on a floating interest

rate of prime minus 25 basis points with a floor of 3.75%. As of ~~April 30,~~July 31, 2022 and October 31, 2021, there was no amount outstanding and $13 million was available under the line of credit.

Dividend: ~~After careful consideration~~The FREIT Board of Directors (“Board”) declared dividends of approximately $1,407,000 ($0.20 per share) to stockholders of record during Fiscal 2022. The Board did not declare a dividend in the third quarter of Fiscal 2022. On August 4, 2022, FREIT’s ~~projected operating results and cash needs, the~~ Board declared a ~~dividend~~special, extraordinary, non-recurring cash distribution of ~~$0.10~~approximately $51.5 million, or $7.50 per share, ~~in the second quarter of Fiscal 2022~~ which ~~will be~~was paid on ~~June 15,~~August 30, 2022, to stockholders of record on ~~June 1, 2022.~~August 16, 2022 (with an ex-dividend date of August 31, 2022). (See Note 7 to FREIT’s condensed consolidated financial statements for additional details.) The Board will continue to evaluate the dividend on a quarterly basis.

As of ~~April 30,~~July 31, 2022, FREIT’s aggregate outstanding mortgage debt was ~~$137.2~~$139.6 million, which bears a weighted average interest rate of ~~3.96%~~4.28% and an average life of approximately ~~1.9~~2.7 years. FREIT’s mortgages are subject to amortization schedules that are longer than the terms of the mortgages. As such, balloon payments (unpaid principal amounts at the mortgage due date) for all mortgage debt will be required as follows:

Fiscal Year		2022	2023	2024	2025	2026	2027	2028	2029		2022	2023	2024	2025	2026	2027	2028	2029
($ in millions)
Mortgage "Balloon" Payments		$47.4 (A)	$17.1	$16.5	$13.9	$0.0		$10.5	$26.0		$0.0 (A)	$42.1	$16.5	$38.9	$0.0		$10.5	$26.0

	(A)	Includes the following:								(A)	On August 19, 2022, Westwood Hills, LLC, exercised its right, pursuant to the loan agreement, to extend the term of its $25 million loan on its property located in Westwood, New Jersey, which matures on October 1, 2022, for two (2) additional six (6) month periods on the same terms and conditions as stated in the loan agreement.
		(1) A loan on the Preakness Shopping Center located in Wayne, New Jersey in the amount of approximately $22.2 million. Although the Company continues to make its required debt service payments in accordance with the loan agreement, it was unable to comply with a look back debt service coverage ratio loan covenant contained in the mortgage loan agreement held by People’s United Bank. On June 2, 2022, the lender agreed to waive the covenant default subject to the loan being paid off on or before September 1, 2022. (See Note 9 to FREIT's condensed consolidated financial statements for additional details.)

		(2) A loan on the Westwood Hills property located in Westwood, New Jersey in the amount of $25 million which matures on October 1, 2022 and has an option to extend for two (2) additional six (6)-month periods from the maturity date, subject to provisions of the loan agreement.

The following table shows the estimated fair value and net carrying value of FREIT’s long-term debt at ~~April 30,~~July 31, 2022 and October 31, 2021:

FREIT expects to refinance the individual mortgages with new mortgages or exercise extension options when their terms expire. To this extent, FREIT has exposure to interest rate risk. If interest rates, at the time any individual mortgage note is due, are higher than the current fixed interest rate, higher debt service may be required, and/or refinancing proceeds may be less than the amount of mortgage debt being retired. For example, at ~~April 30,~~July 31, 2022, a 1% interest rate increase would reduce the fair value of FREIT’s debt by ~~$3.6~~$3.4 million, and a 1% decrease would increase the fair value by ~~$3.8~~$3.6 million.

FREIT continually reviews its debt levels to determine if additional debt can prudently be utilized for property acquisitions for its real estate portfolio that will increase income and cash flow to stockholders.

Interest rate swap contracts: To reduce interest rate volatility, FREIT uses a “pay fixed, receive floating” interest rate swap to convert floating interest rates to fixed interest rates over the term of a certain loan. FREIT enters into these swap contracts with a counterparty that is usually a high-quality commercial bank. In essence, FREIT agrees to pay its counterparties a fixed rate of interest on a dollar amount of notional principal (which generally corresponds to FREIT’s mortgage debt) over a term equal to the term of the mortgage

notes. FREIT’s counterparties, in return, agree to pay FREIT a short-term rate of interest - generally LIBOR - on that same notional amount over the same term as the mortgage notes.

FREIT has variable interest rate loans secured by its Damascus Centre, Regency, Wayne PSC and Station Place properties. To reduce interest rate fluctuations, FREIT entered into interest rate swap contracts for each of these loans. These interest rate swap contracts effectively converted variable interest rate payments to fixed interest rate payments. The contracts were based on a notional amount of approximately $16,200,000 ($~~14,754,000~~14,671,000 at ~~April 30,~~July 31, 2022) for the Regency ~~swap, a notional amount of approximately $25,800,000 ($21,949,000 at April 30, 2022) for the Wayne PSC~~ swap and a notional amount of approximately $12,350,000 ($~~11,862,000~~11,806,000 at ~~April 30,~~July 31, 2022) for the Station Place swap. On January 10, 2022, the property owned by Damascus Centre was sold and a portion of the proceeds from the sale was used to pay off the $18.2 million then outstanding balance of the underlying loan and the corresponding swap breakage fees of approximately $213,000 related to the early termination of the interest rate swap contracts on this loan which was included as interest expense on the accompanying condensed consolidated statement of income for the ~~six~~nine months ended ~~April 30,~~July 31, 2022. (See Note 7 to FREIT’s condensed consolidated financial statements for further details on the sale of this property.) On June 17, 2022, Wayne PSC terminated its interest rate swap contract on its underlying loan held with People’s United Bank, which had a maturity date of October 2026, for a settlement amount of approximately $1.4 million. People’s United Bank held the proceeds from this settlement in escrow until the underlying loan was paid off in July 2022 and has been included as a realized gain on interest rate swap termination on the accompanying condensed consolidated statements of income for the nine and three months ended July 31, 2022. (See Note 9 to FREIT’s condensed consolidated financial statements for further details.)

Interest rate cap contract: To limit exposure on interest rate volatility, FREIT uses an interest rate cap contract to cap a floating interest rate at a set pre-determined rate. FREIT enters into cap contracts with a counterparty that is usually a high-quality commercial bank. In essence, so long as the floating interest rate is below the cap rate, FREIT agrees to pay its counterparties a variable rate of interest on a dollar amount of notional principal (which generally corresponds to FREIT’s mortgage debt). Once the floating interest rate rises above the cap rate, FREIT’s counterparties, in return, agree to pay FREIT a short-term rate of interest above the cap on that same notional amount.

FREIT had a variable interest rate loan secured by its Rotunda Property. As part of the refinancing of Grande Rotunda’s construction loan with a new loan from Aareal Capital Corporation, Grande Rotunda had purchased an interest rate cap contract on LIBOR for the full amount that could have been drawn on this loan of $121.9 million, capping the one-month LIBOR rate at 3% for the first two years of this loan which matured on March 5, 2020. On February 28, 2020, Grande Rotunda had purchased an interest rate cap on LIBOR, with an effective date of March 5, 2020, for the full amount that could have been drawn on this loan of $121.9 million, capping the one-month LIBOR rate at 3% for one year, maturing on March 5, 2021. Effective February 6, 2021, Grande Rotunda exercised the first extension option on this loan with a balance ~~in the amount~~ of approximately $118.5 million, extending the loan one year with a new maturity date of February 6, 2022. Additionally, Grande Rotunda purchased an interest rate cap contract on LIBOR, with an effective date of March 5, 2021, for the loan amount of approximately $118.5 million, capping the one-month LIBOR rate at 3% for one year expiring on February 6, 2022. On December 30, 2021, the Rotunda Property owned by Grande Rotunda was sold, a portion of the proceeds from the sale was used to pay off the $116.5 million then outstanding balance of the underlying loan and the corresponding interest rate cap on this loan matured with no settlement due at maturity. (See Note 7 to FREIT’s condensed consolidated financial statements for further details.)

In accordance with ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities to Accounting Standards Codification Topic 815, Derivatives and Hedging ("ASC 815")”, FREIT marks-to-market its interest rate swap and cap contracts. As the floating interest rate varies from time-to-time over the term of the contract, the value of the contract will change upward or downward. If the floating rate is higher than the fixed rate, the value of the contract goes up and there is a gain and an asset. If the floating rate is less than the fixed rate, there is a loss and a liability. The interest rate swaps and cap are accounted for as cash flow hedges with the corresponding gains or losses on these contracts not affecting FREIT’s condensed consolidated statement of operations; changes in the fair value of these cash flow hedges will be reported in other comprehensive income and appear in the equity section of the condensed consolidated balance sheet. This gain or loss represents the economic consequence of liquidating fixed rate swaps or the cap contract and replacing them with like-duration funding at current market rates, something we would likely never do. Periodic cash settlements of these contracts will be accounted for as an adjustment to interest expense.

FREIT has the following derivative-related risks with its interest rate swap and cap contracts (“contract”): 1) early termination risk, and 2) counterparty credit risk.

Early Termination Risk: If FREIT wants to terminate its contract before maturity, it would be bought out or terminated at market value; i.e., the difference in the present value of the anticipated net cash flows from each of the contract’s parties. If current variable interest rates are significantly below FREIT’s fixed interest rate payments, this could be costly. Conversely, if interest rates rise above FREIT’s fixed interest payments and FREIT elected early termination, FREIT would realize a gain on termination. At ~~April 30,~~July 31, 2022, the ~~contracts~~contract for Regency was in FREIT’s favor and the contract for Station Place ~~and Wayne PSC were~~was in ~~FREIT’s~~the counterparties’ favor. If FREIT had terminated these contracts at that date, it would have realized ~~gains~~a gain of approximately ~~$131,000~~$116,000 for the Regency swap ~~$158,000~~and a loss of $16,000 for the Station Place ~~swap and $1,204,000 for the Wayne PSC~~ swap all of which have been included ~~as an asset~~ in FREIT’s condensed consolidated balance sheet as at ~~April 30,~~July 31, 2022. The change in the fair value for the contract (gain or loss) during such period has been included in comprehensive income (loss) and for the ~~six~~nine and three months ended ~~April 30,~~July 31, 2022, FREIT recorded an unrealized gain of approximately ~~$3,801,000~~$2,408,000 and ~~$2,539,000,~~unrealized loss of $1,393,000, respectively, in the condensed consolidated statements of comprehensive income. For the ~~six~~nine and three months ended ~~April 30,~~July 31, 2021, FREIT recorded an unrealized gain of approximately ~~$1,675,000~~$1,441,000 and ~~$1,177,000,~~unrealized loss of $234,000, respectively, in the condensed consolidated statements of comprehensive income.

Counterparty Credit Risk: Each party to a contract bears the risk that its counterparty will default on its obligation to make a periodic payment. FREIT reduces this risk by entering into a contract only with major financial institutions that are experienced market makers in the derivatives market.

Funds From Operations (“FFO”) is a non-GAAP measure defined by the National Association of Real Estate Investment Trusts (“NAREIT”). FREIT does not include distributions from equity/debt/capital gain sources in its computation of FFO. Although many consider FFO as the standard measurement of a REIT’s performance, FREIT modified the NAREIT computation of FFO to include other adjustments to GAAP net income that are not considered by management to be the primary drivers of its decision making process. These adjustments to GAAP net income are straight-line rents and recurring capital improvements on FREIT’s residential apartments. The modified FFO computation is referred to as Adjusted Funds From Operations (“AFFO”). FREIT believes that AFFO is a superior measure of its operating performance. FREIT computes FFO and AFFO as follows:

FFO and AFFO do not represent cash generated from operating activities in accordance with GAAP, and therefore should not be considered a substitute for net income as a measure of results of operations or for cash flow from operations as a measure of liquidity. Additionally, the application and calculation of FFO and AFFO by certain other REITs may vary materially from that of FREIT, and therefore FREIT’s FFO and AFFO may not be directly comparable to those of other REITs.

Inflation can impact the financial performance of FREIT in various ways. FREIT’s commercial tenant leases normally provide that the tenants bear all or a portion of most operating expenses, which can reduce the impact of inflationary increases on FREIT. Apartment leases are normally for a one-year term, which may allow FREIT to seek increased rents as leases renew or when new tenants are obtained, subject to prevailing market conditions.

See “Commercial Segment”, “Residential Segment” and “Liquidity and Capital Resources” under Item 2 above for a detailed discussion of FREIT’s quantitative and qualitative market risk disclosures.

At the end of the period covered by this report, we carried out an evaluation of the effectiveness of the design and operation of FREIT’s disclosure controls and procedures. This evaluation was carried out under the supervision and with participation of FREIT’s management, including FREIT’s Chief Executive Officer and Chief Financial Officer, who concluded that FREIT’s disclosure controls and procedures are effective as of ~~April 30,~~July 31, 2022. There has been no change in FREIT’s internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, FREIT’s internal control over financial reporting.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in FREIT’s reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in FREIT’s reports filed under the Exchange Act is accumulated and communicated to management, including FREIT’s Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

~~FREIT previously reported that on~~On February 4, 2022, the Superior Court of New Jersey, Monmouth County (“Court”) entered an Order with respect to summary judgment motions filed by the parties in connection with litigation between certain affiliates of FREIT (the “Sellers” or “Defendant”) and Sinatra Properties, LLC (“Sinatra” or “Plaintiff”). The litigation relates to a Purchase and Sale Agreement entered into on January 14, 2020 (“PSA”) between the Sellers and Sinatra involving the sale by the Sellers of 100% of their ownership interests in six (6) real properties held by the Sellers.

(1) The Court finds that the Plaintiff’s have breached the subject contract and the Court dismisses all claims for relief filed by the Plaintiff in this suit. The Court dismissed the Complaint and dismisses the Lis Pendens.

(2) The Court finds that the liquidated damage provision of the contract is not enforceable and the Court Orders that the $15 million held in escrow be returned to the Plaintiff.

(3) The Court dismisses the Counterclaims and Third Party Complaint. All pleadings are dismissed.

~~The Sellers have been evaluating the February 4, 2022 Order and their rights and remedies with respect thereto.~~

The Sellers have been evaluating the February 4, 2022 Order and their rights and remedies with respect thereto. The Sellers continue to believe that the allegations set forth in the Complaint ~~and Answer~~ filed by Sinatra and in the Answer to Counterclaims and Third-Party Complaint and Affirmative Defenses filed by Sinatra and Kushner Realty Acquisition LLC, are without merit.

There were no material changes in any risk factors previously disclosed in FREIT’s Annual Report on Form 10-K for the year ended October 31, 2021, that was filed with the Securities and Exchange Commission on January 28, 2022.

Exhibit 101 - The following materials from FREIT’s quarterly report on Form 10-Q for the period ended ~~April 30,~~July 31, 2022, are formatted in Inline Extensible Business Reporting Language (“iXBRL”): (i) condensed consolidated balance sheets; (ii) condensed consolidated statements of ~~operations;~~income; (iii) condensed consolidated statements of comprehensive income; (iv) condensed consolidated statements of equity; (v) condensed consolidated statements of cash flows; and (vi) notes to condensed consolidated financial statements.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Recurring capital improvements - residential	$	(206	)	$	(180	)	$	(158	)	$	(98	)


Recurring capital improvements - residential	$	(401	)	$	(438	)	$	(195	)	$	(258	)

	Nine and Three Months Ended July 31, 2022				Nine and Three Months Ended July 31, 2021
	No. of Options		Weighted Average		No. of Options		Weighted Average
	Outstanding		Price		Outstanding		Price
Options outstanding at beginning of period		310,740	$	18.35		310,740	$	18.35
Options granted during period		-		-		-		-
Options forfeited/cancelled during period		-		-		-		-
Options outstanding at end of period		310,740	$	18.35		310,740	$	18.35
Options vested and expected to vest		309,450				308,310
Options exercisable at end of period		301,140				284,940

	Six and Three Months Ended April 30, 2022				Six and Three Months Ended April 30, 2021
	No. of Options		Weighted Average		No. of Options		Weighted Average
	Outstanding		Price		Outstanding		Price
Options outstanding at beginning of period		310,740	$	18.35		310,740	$	18.35
Options granted during period		0-		0-		0-		0-
Options forfeited/cancelled during period		0-		0-		0-		0-
Options outstanding at end of period		310,740	$	18.35		310,740	$	18.35
Options vested and expected to vest		309,450				308,310
Options exercisable at end of period		293,540				277,340

RETAIL:	Number of Leases		Lease Area (Sq. Ft.)		Weighted Average Lease Rate (per Sq. Ft.)		Weighted Average Prior Lease Rate (per Sq. Ft.)		% Increase (Decrease)		Tenant Improvement Allowance (per Sq. Ft.) (a)		Lease Commissions (per Sq. Ft.) (a)

Comparable leases (b)		5		90,493	$	5.51	$	6.67		-17.4%	$	—	$	0.02

Non-comparable leases		5		11,875	$	26.37		N/A		N/A	$	1.07	$	1.32

Total leasing activity		10		102,368

NON-GAAP NET INCOME (LOSS) COMPONENTS	Six Months Ended									Three Months Ended
	April 30,									April 30,
	2022			2021			Change			2022			2021			Change
	(In Thousands of Dollars)									(In Thousands of Dollars)
Income from real estate operations:
Commercial properties	$	2,286		$	6,390		$	(4,104	)	$	660		$	2,872		$	(2,212	)
Residential properties		6,372			7,967			(1,595	)		2,675			4,022			(1,347	)
Total income from real estate operations		8,658			14,357			(5,699	)		3,335			6,894			(3,559	)

Financing costs:
Fixed rate mortgages		(2,431	)		(2,903	)		472			(1,089	)		(1,442	)		353
Floating rate mortgages		(1,217	)		(2,581	)		1,364			(265	)		(1,265	)		1,000
Interest rate swap contracts breakage fee		(213	)		—			(213	)		—			—			—
Other - Corporate interest		(80	)		(140	)		60			(22	)		(79	)		57
Mortgage cost amortization		(514	)		(568	)		54			(151	)		(274	)		123
Total financing costs		(4,455	)		(6,192	)		1,737			(1,527	)		(3,060	)		1,533

Investment income		64			59			5			38			29			9

General & administrative expenses:
Accounting fees		(251	)		(264	)		13			(113	)		(110	)		(3	)
Legal and professional fees		(1,010	)		(1,177	)		167			(297	)		(645	)		348
Directors fees		(533	)		(465	)		(68	)		(260	)		(228	)		(32	)
Stock option expense		(10	)		(24	)		14			(5	)		(12	)		7
Corporate expenses		(392	)		(800	)		408			(194	)		(475	)		281
Total general & administrative expenses		(2,196	)		(2,730	)		534			(869	)		(1,470	)		601

Depreciation		(2,534	)		(4,633	)		2,099			(714	)		(2,338	)		1,624
Loss on investment in tenancy-in-common		(156	)		(145	)		(11	)		(32	)		(118	)		86
Adjusted net (loss) income		(619	)		716			(1,335	)		231			(63	)		294

Net gain (loss) on sale of Maryland properties		68,771			—			68,771			(1,232	)		—			(1,232	)
Net income (loss)		68,152			716			67,436			(1,001	)		(63	)		(938	)

Net (income) loss attributable to noncontrolling interests in subsidiaries		(22,727	)		(149	)		(22,578	)		649			72			577

Net income (loss) attributable to common equity	$	45,425		$	567		$	44,858		$	(352	)	$	9		$	(361	)


NON-GAAP NET INCOME COMPONENTS	Nine Months Ended									Three Months Ended
	July 31,									July 31,
	2022			2021			Change			2022			2021			Change
	(In Thousands of Dollars)									(In Thousands of Dollars)
Income from real estate operations:
Commercial properties	$	3,274		$	9,728		$	(6,454	)	$	988		$	3,338		$	(2,350	)
Residential properties		9,015			11,794			(2,779	)		2,643			3,827			(1,184	)
Total income from real estate operations		12,289			21,522			(9,233	)		3,631			7,165			(3,534	)

Financing costs:
Fixed rate mortgages		(3,545	)		(4,348	)		803			(1,114	)		(1,445	)		331
Floating rate mortgages		(1,550	)		(3,873	)		2,323			(333	)		(1,292	)		959
Interest rate swap contracts breakage fee		(213	)		—			(213	)		—			—			—
Other - Corporate interest		(108	)		(183	)		75			(28	)		(43	)		15
Mortgage cost amortization		(813	)		(838	)		25			(299	)		(270	)		(29	)
Total financing costs		(6,229	)		(9,242	)		3,013			(1,774	)		(3,050	)		1,276

Investment income		183			88			95			119			29			90

General & administrative expenses:
Accounting fees		(367	)		(374	)		7			(116	)		(110	)		(6	)
Legal and professional fees		(1,322	)		(1,929	)		607			(312	)		(752	)		440
Directors fees		(792	)		(710	)		(82	)		(259	)		(245	)		(14	)
Stock option expense		(15	)		(35	)		20			(5	)		(11	)		6
Corporate expenses		(611	)		(1,095	)		484			(219	)		(295	)		76
Total general & administrative expenses		(3,107	)		(4,143	)		1,036			(911	)		(1,413	)		502

Depreciation		(3,257	)		(6,948	)		3,691			(723	)		(2,315	)		1,592
(Loss) Gain on investment in tenancy-in-common		(99	)		(245	)		146			57			(100	)		157
Adjusted net (loss) income		(220	)		1,032			(1,252	)		399			316			83

Net gain on sale of Maryland properties		68,771			—			68,771			—			—			—
Net realized gain on Wayne PSC interest rate swap termination		1,415			—			1,415			1,415			—			1,415
Net income		69,966			1,032			68,934			1,814			316			1,498

Net income attributable to noncontrolling interests in subsidiaries		(23,420	)		(256	)		(23,164	)		(693	)		(107	)		(586	)

Net income attributable to common equity	$	46,546		$	776		$	45,770		$	1,121		$	209		$	912

	For the Nine Months Ended July 31,						For the Three Months Ended July 31,
	2022			2021			2022			2021
	(In Thousands, Except Per Share)						(In Thousands, Except Per Share)
Funds From Operations ("FFO") (a)
Net income	$	69,966		$	1,032		$	1,814		$	316
Depreciation of consolidated properties		3,257			6,948			723			2,315
Amortization of deferred leasing costs		107			363			19			131
Distributions to non-controlling interests		(735	)		(960	)		(210	)		(450	)
Net gain on sale of Maryland properties		(68,771	)		—			—			—
Adjustment to loss on investment in tenancy-in-common for depreciation		1,062			1,055			355			352
Net realized gain on Wayne PSC interest rate swap termination		(1,415	)		—			(1,415	)		—
FFO	$	3,471		$	8,438		$	1,286		$	2,664

Per Share - Basic and Diluted	$	0.49		$	1.20		$	0.18		$	0.38

(a) As prescribed by NAREIT.

Adjusted Funds From Operations ("AFFO")
FFO	$	3,471		$	8,438		$	1,286		$	2,664
Deferred rents (Straight lining)		25			225			(36	)		12
Capital Improvements - Apartments		(401	)		(438	)		(195	)		(258	)
AFFO	$	3,095		$	8,225		$	1,055		$	2,418

Per Share - Basic and Diluted	$	0.44		$	1.17		$	0.15		$	0.34

Weighted Average Shares Outstanding:
Basic		7,038			7,016			7,040			7,022
Diluted		7,110			7,018			7,114			7,026

	For the Six Months Ended April 30,						For the Three Months Ended April 30,
	2022			2021			2022			2021
	(In Thousands, Except Per Share)						(In Thousands, Except Per Share)
Funds From Operations ("FFO") (a)
Net income (loss)	$	68,152		$	716		$	(1,001	)	$	(63	)
Depreciation of consolidated properties		2,534			4,633			714			2,338
Amortization of deferred leasing costs		88			232			17			122
Distributions to non-controlling interests		(525	)		(510	)		(180	)		(510	)
Net (gain) loss on sale of Maryland properties		(68,771	)		—			1,232			—
Adjustment to loss in investment in tenancy-in-common for depreciation		707			703			354			352
FFO	$	2,185		$	5,774		$	1,136		$	2,239

Per Share - Basic and Diluted	$	0.31		$	0.82		$	0.16		$	0.32

(a) As prescribed by NAREIT.

Adjusted Funds From Operations ("AFFO")
FFO	$	2,185		$	5,774		$	1,136		$	2,239
Deferred rents (Straight lining)		61			213			51			7
Capital Improvements - Apartments		(206	)		(180	)		(158	)		(98	)
AFFO	$	2,040		$	5,807		$	1,029		$	2,148

Per Share - Basic and Diluted	$	0.29		$	0.83		$	0.15		$	0.31

Weighted Average Shares Outstanding:
Basic		7,037			7,012			7,038			7,016
Diluted		7,108			7,012			7,038			7,018

	FIRST REAL ESTATE INVESTMENT
	TRUST OF NEW JERSEY, INC.
	(Registrant)

Date: ~~June~~September 14, 2022
	/s/ Robert S. Hekemian, Jr.
	(Signature)
	Robert S. Hekemian, Jr.
	President and Chief Executive Officer
	(Principal Executive Officer)


	/s/ Allan Tubin
	(Signature)
	Allan Tubin
	Chief Financial Officer and Treasurer
	(Principal Financial/Accounting Officer)