Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 31, 2016 | Sep. 09, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY | |
Entity Central Index Key | 36,840 | |
Document Type | 10-Q | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Document Period End Date | Jul. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 6,732,469 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 31, 2016 | Oct. 31, 2015 |
ASSETS | ||
Real estate, at cost, net of accumulated depreciation | $ 213,997 | $ 219,430 |
Construction in progress | 119,981 | 101,415 |
Cash and cash equivalents | 11,871 | 13,500 |
Tenants' security accounts | 1,819 | 1,728 |
Receivables arising from straight-lining of rents, net of allowance for loss in 2015 | 2,368 | 2,604 |
Accounts receivable, net of allowance for doubtful accounts | 2,163 | 2,105 |
Secured loans receivable | 5,451 | 5,451 |
Prepaid expenses and other assets | 6,480 | 4,555 |
Deferred charges, net | 1,641 | 1,327 |
Total Assets | 365,771 | 352,115 |
Liabilities: | ||
Mortgages and construction loan payable | 323,206 | 307,899 |
Less unamortized debt issuance costs | 2,442 | 3,129 |
Mortgages payable, net | 320,764 | 304,770 |
Deferred trustee compensation payable | 9,078 | 9,078 |
Accounts payable and accrued expenses | 9,948 | 10,305 |
Dividends payable | 2,018 | 2,018 |
Tenants' security deposits | 2,744 | 2,561 |
Deferred revenue | 1,319 | 1,080 |
Interest rate swap contracts | 2,681 | 1,066 |
Total Liabilities | 348,552 | 330,878 |
Commitments and contingencies | ||
Common equity: | ||
Shares of beneficial interest without par value: 8,000,000 shares authorized; 6,993,152 shares issued plus 68,823 and 39,350 vested share units granted to trustees at July 31, 2016 and October 31, 2015, respectively | 26,505 | 25,860 |
Treasury stock, at cost: 266,283 shares at July 31, 2016 and at October 31, 2015 | (5,517) | (5,517) |
Dividends in excess of net income | (14,819) | (11,769) |
Accumulated other comprehensive loss | (2,415) | (1,030) |
Total Common Equity | 3,754 | 7,544 |
Noncontrolling interests in subsidiaries | 13,465 | 13,693 |
Total Equity | 17,219 | 21,237 |
Total Liabilities and Equity | $ 365,771 | $ 352,115 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jul. 31, 2016 | Oct. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Shares of benefical interest, no par value | ||
Shares of benefical interest, authorized | 8,000,000 | 8,000,000 |
Shares of benefical interest, issued | 6,993,152 | 6,993,152 |
Vested share units to trustees, issued | 68,823 | 39,350 |
Treasury stock at cost, shares | 266,283 | 266,283 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Revenue: | ||||
Rental income | $ 10,249 | $ 9,781 | $ 29,930 | $ 28,992 |
Reimbursements | 1,255 | 1,290 | 3,896 | 4,280 |
Sundry income | 86 | 72 | 252 | 403 |
Revenue | 11,590 | 11,143 | 34,078 | 33,675 |
Expenses: | ||||
Operating expenses | 3,460 | 3,118 | 10,198 | 10,192 |
Management fees | 515 | 504 | 1,501 | 1,489 |
Real estate taxes | 1,988 | 1,994 | 5,949 | 5,921 |
Depreciation | 1,791 | 1,690 | 5,263 | 4,985 |
Expenses | 7,754 | 7,306 | 22,911 | 22,587 |
Operating income | 3,836 | 3,837 | 11,167 | 11,088 |
Investment income | 44 | 37 | 106 | 113 |
Gain on sale of commercial property | 314 | 314 | ||
Interest expense including amortization of deferred financing costs | (2,737) | (2,817) | (8,153) | (8,370) |
Net income | 1,457 | 1,057 | 3,434 | 2,831 |
Net income attributable to noncontrolling interests in subsidiaries | (211) | (89) | (377) | (283) |
Net income attributable to common equity | $ 1,246 | $ 968 | $ 3,057 | $ 2,548 |
Earnings per share - basic and diluted | $ 0.18 | $ 0.14 | $ 0.45 | $ 0.38 |
Weighted average shares outstanding: | ||||
Basic | 6,787 | 6,747 | 6,777 | 6,785 |
Diluted | 6,800 | 6,755 | 6,777 | 6,786 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,457 | $ 1,057 | $ 3,434 | $ 2,831 |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on interest rate swap contracts before reclassifications | (924) | 244 | (2,070) | (1,373) |
Amount reclassified from accumulated other comprehensive loss to interest expense | 150 | 171 | 455 | 447 |
Net unrealized gain (loss) on interest rate swap contracts | (774) | 415 | (1,615) | (926) |
Comprehensive income | 683 | 1,472 | 1,819 | 1,905 |
Net income attributable to noncontrolling interests | (211) | (89) | (377) | (283) |
Other comprehensive income (loss): | ||||
Unrealized (gain) loss on interest rate swap contracts attributable to noncontrolling interests | 110 | (38) | 230 | 111 |
Comprehensive income attributable to noncontrolling interests | (101) | (127) | (147) | (172) |
Comprehensive income attributable to common equity | $ 582 | $ 1,345 | $ 1,672 | $ 1,733 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - 9 months ended Jul. 31, 2016 - USD ($) $ in Thousands | Shares of Beneficial Interest [Member] | Treasury Shares at Cost [Member] | Dividends in Excess of Net Income [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total Common Equity [Member] | Noncontrolling Interests [Member] | Total |
Balance at Oct. 31, 2015 | $ 25,860 | $ (5,517) | $ (11,769) | $ (1,030) | $ 7,544 | $ 13,693 | $ 21,237 |
Stock based compensation expense | 71 | 71 | 71 | ||||
Vested share units granted to Trustees | 574 | 574 | 574 | ||||
Distributions to noncontrolling interests | (375) | (375) | |||||
Net income | 3,057 | 3,057 | 377 | 3,434 | |||
Dividends declared, including $53 payable in share units ($0.90 per share) | (6,107) | (6,107) | (6,107) | ||||
Net unrealized loss on interest rate swaps | (1,385) | (1,385) | (230) | (1,615) | |||
Balance at Jul. 31, 2016 | $ 26,505 | $ (5,517) | $ (14,819) | $ (2,415) | $ 3,754 | $ 13,465 | $ 17,219 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) $ in Thousands | 9 Months Ended |
Jul. 31, 2016USD ($)$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Stock dividends payable | $ | $ 53 |
Dividends declared, per share | $ / shares | $ 0.90 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Operating activities: | ||
Net income | $ 3,434 | $ 2,831 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 5,263 | 4,985 |
Amortization | 572 | 548 |
Stock based compensation expense | 71 | 71 |
Trustee fees and related interest payable in stock units | 521 | 571 |
Gain on sale of commercial property | (314) | |
Deferred rents - straight line rent | (251) | 219 |
Bad debt expense | 156 | 559 |
Net amortization of acquired leases | 1 | |
Changes in operating assets and liabilities: | ||
Tenants' security accounts | 92 | 145 |
Accounts receivable, prepaid expenses and other assets | (870) | (856) |
Accounts payable, accrued expenses and deferred trustee compensation | (741) | (1,096) |
Deferred revenue | 239 | (321) |
Net cash provided by operating activities | 8,172 | 7,657 |
Investing activities: | ||
Proceeds from sale of commercial property | 3,059 | |
Capital improvements - existing properties | (2,036) | (2,997) |
Construction and pre-development costs | (16,871) | (37,806) |
Net cash used in investing activities | (15,848) | (40,803) |
Financing activities: | ||
Repayment of mortgages and construction loan | (3,148) | (3,075) |
Repayment of credit line | (5,000) | |
Proceeds from mortgage loan refinancing | 16,200 | |
Proceeds from additional tranche of loan | 2,320 | |
Restricted loan proceeds held in escrow | (1,850) | |
Proceeds from construction loan | 15,214 | 38,170 |
Deferred financing costs | (60) | (361) |
Dividends paid | (6,054) | (6,116) |
Repurchase of Company stock-Treasury shares | (2,169) | |
Distributions to noncontrolling interests | (375) | (426) |
Net cash provided by financing activities | 6,047 | 37,223 |
Net increase (decrease) in cash and cash equivalents | (1,629) | 4,077 |
Cash and cash equivalents, beginning of period | 13,500 | 10,554 |
Cash and cash equivalents, end of period | 11,871 | 14,631 |
Supplemental disclosure of cash flow data: | ||
Interest paid, net of amounts capitalized | 7,625 | 7,684 |
Investing activities: | ||
Accrued capital expenditures, construction costs, pre-development costs and interest | 6,717 | 6,371 |
Financing activities: | ||
Dividends declared but not paid | 2,018 | 2,018 |
Dividends paid in share units | $ 53 | $ 17 |
Basis of presentation
Basis of presentation | 9 Months Ended |
Jul. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Note 1 - Basis of presentation: 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 nine and three-month periods ended July 31, 2016 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 the Annual Report on Form 10-K for the year ended October 31, 2015 of First Real Estate Investment Trust of New Jersey (“FREIT”). |
Recently issued accounting stan
Recently issued accounting standards | 9 Months Ended |
Jul. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently issued accounting standards | Note 2 –Recently issued accounting standards: In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers In February 2015, the FASB issued ASU No. 2015-02, " Amendments to the Consolidation Analysis In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842) Leases (Topic 840) |
Earnings per share
Earnings per share | 9 Months Ended |
Jul. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings per share | Note 3 - Earnings per share: Basic earnings 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 attributed to future services, are used to repurchase FREITÂ’s stock at the average market price during the period, thereby reducing the number of shares to be added in computing diluted earnings per share. For the nine months ended July 31, 2016, the outstanding stock options were anti-dilutive with no impact on earnings per share. For the three months ended July 31, 2016, the outstanding stock options increased the average dilutive shares outstanding by approximately 13,000 shares with no impact on earnings per share. For the nine and three months ended July 31, 2015, the outstanding stock options increased the average dilutive shares outstanding by approximately 1,000 and 8,000 shares, respectively, with no impact on earnings per share. |
Interest rate swap contracts
Interest rate swap contracts | 9 Months Ended |
Jul. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest rate swap contracts | Note 4 - Interest rate swap contracts: On December 26, 2012, Damascus Centre, LLC refinanced its construction loan with long-term financing provided by People’s United Bank and the first tranche of the new loan was taken-down in the amount of $20 million. Based on leasing and net operating income at the shopping center, People’s United Bank agreed to a take-down of the second tranche of this loan on April 22, 2016 in the amount of $2,320,000, of which approximately $470,000 was readily available and the remaining $1,850,000 (included in prepaid expenses and other assets in the accompanying condensed consolidated balance sheet) is held in escrow and available to Damascus Centre, LLC once certain tenants open and begin paying rent. The total amount outstanding for both tranches of this loan held with People’s United Bank as of July 31, 2016 was approximately $21 million. The loan has a maturity date of January 3, 2023 and bears a floating interest rate equal to 210 points over the BBA LIBOR. In order to minimize interest rate volatility during the term of this loan, Damascus Centre, LLC entered into an interest rate swap agreement that, in effect, converted the floating interest rate to a fixed interest rate on each tranche of this loan, resulting in a fixed rate of 3.81% over the term of the first tranche of this loan and a fixed rate of 3.53% over the term of the second tranche of this loan. At July 31, 2016, the derivative financial instrument has a notional amount of approximately $21 million and a current maturity date of January 2023. On December 29, 2014, FREIT Regency, LLC closed on a $16.2 million mortgage loan with Provident Bank. At July 31, 2016, the total amount outstanding on this loan was $16.2 million. The loan bears a floating interest rate equal to 125 basis points over the BBA LIBOR and the loan will mature on December 15, 2024. In order to minimize interest rate volatility during the term of the loan, FREIT Regency, LLC entered into an interest rate swap agreement that, in effect, converted the floating interest rate to a fixed interest rate of 3.75% over the term of the loan. At July 31, 2016, the derivative financial instrument has a notional amount of approximately $16.2 million and a current maturity date of December 2024. In accordance with ASC 815, “Accounting for Derivative Instruments and Hedging Activities”, FREIT is accounting for the Damascus Centre, LLC and the FREIT Regency, LLC interest rate swaps as cash flow hedges and marks to market its fixed pay interest rate swaps, taking into account present interest rates compared to the contracted fixed rate over the life of the contract. For the nine months ended July 31, 2016, FREIT recorded an unrealized loss of $1,615,000 in comprehensive income representing the change in the fair value of the swaps during such period and a corresponding liability of approximately $1,792,000 for the Regency swap and $889,000 for the Damascus Center swap as of July 31, 2016. For the three months ended July 31, 2016 and 2015, FREIT recorded an unrealized loss of $774,000 and an unrealized gain of $415,000, respectively, in comprehensive income representing the change in the fair value of the swaps during such period. For the year ended October 31, 2015, FREIT recorded an unrealized loss of $1,581,000 in comprehensive income representing the change in the fair value of the swaps during such period and a corresponding liability of $945,000 for the Regency swap and $121,000 for the Damascus Center swap as of October 31, 2015. The fair values are based on observable inputs (level 2 in the fair value hierarchy as provided by authoritative guidance). |
Sale of property
Sale of property | 9 Months Ended |
Jul. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of property | Note 5 – Sale of property: On January 11, 2016, FREIT was notified by Lakeland Bank (as successor by merger to Pascack Community Bank) of its election and exercise of the option to purchase the property leased by FREIT to Lakeland Bank located in Rochelle Park, New Jersey. Pursuant to the Lease Agreement, Lakeland Bank had the right to exercise this option at a price equal to the greater of $3 million or the fair market value of the property as determined by mutual agreement between tenant and landlord. FREIT and Lakeland Bank agreed to a purchase price of $3.1 million. On June 17, 2016, FREIT sold this property, having a carrying amount of approximately $2.7 million (including a straight-line rent receivable in the amount of approximately $0.5 million), to Lakeland Bank for $3.1 million resulting in a gain of approximately $0.3 million net of sales fees. This sale results in FREIT’s loss of future annual rents of approximately $241,000, which would have increased periodically through September 2023. As the disposal of this property did not represent a strategic shift that would have a major impact on FREIT’s operations or financial results, the property’s operations were not reflected as discontinued operations in the accompanying financial statements. |
Capitalized interest
Capitalized interest | 9 Months Ended |
Jul. 31, 2016 | |
Capitalized interest [Abstract] | |
Capitalized interest | Note 6 – Capitalized interest Interest costs associated with amounts expended at the Grande Rotunda development are capitalized and included in the cost of the project. Interest capitalized during the nine months ended July 31, 2016 and 2015 amounted to approximately $2,611,000 and $1,600,000, respectively, and $916,000 and $667,000 for the three months ended July 31, 2016 and 2015, respectively. Capitalization of interest ceased upon substantial completion of the project which occurred as of the end of the third quarter of Fiscal 2016. |
Management agreement, fees and
Management agreement, fees and transactions with related party | 9 Months Ended |
Jul. 31, 2016 | |
Related Party Transactions [Abstract] | |
Management agreement, fees and transactions with related party | Note 7 - Management agreement, fees and transactions with related party: Hekemian & Co., Inc. (“Hekemian”) currently manages all the properties owned by FREIT and its affiliates, except for the office building at The Rotunda located in Baltimore, Maryland, which is managed by an independent third party management company. The management agreement with Hekemian, effective November 1, 2001, requires the payment of management fees equal to 4% to 5% of rents collected. Such fees, charged to operations, were approximately $1,419,000 and $1,412,000, for the nine-month periods ended July 31, 2016 and 2015, respectively, and $485,000 and $479,000 for the three-month periods ended July 31, 2016 and 2015, respectively. In addition, the management agreement provides for the payment to Hekemian of leasing commissions, as well as the reimbursement of operating expenses incurred on behalf of FREIT. Such commissions and reimbursements amounted to approximately $452,000 and $213,000, for the nine months ended July 31, 2016 and 2015, respectively, and $147,000 and $77,000 for the three months ended July 31, 2016 and 2015, respectively. The management agreement expires on October 31, 2017, 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. FREIT also uses the resources of the Hekemian insurance department to secure various insurance coverages for its properties and subsidiaries. Hekemian is paid a commission for these services. Such commissions were charged to operations and amounted to approximately $164,000 and $155,000 for the nine months ended July 31, 2016 and 2015, respectively, and $101,000 and $98,000 for the three months ended July 31, 2016 and 2015, respectively. From time to time, FREIT engages Hekemian to provide certain additional services, such as consulting services related to development, property sales and financing activities of FREIT. Separate fee arrangements are negotiated between Hekemian and FREIT with respect to such additional services. Grande Rotunda, LLC and Hekemian Development Resources, LLC, a wholly-owned subsidiary of Hekemian (“Resources”), entered into an agency agreement pursuant to which Resources is to provide development services in connection with the development activities at the Rotunda, which is owned and operated by Grande Rotunda, LLC. Fees incurred to Hekemian and Resources during the nine months ended July 31, 2016 and 2015 pursuant to such agreement were approximately $391,000 and $1,133,000, respectively, and $33,000 and $340,000 for the three months ended July 31, 2016 and 2015, respectively. Such fees were capitalized and were included in construction in progress on the accompanying condensed consolidated balance sheets. Mr. Robert S. Hekemian, Chairman of the Board, Chief Executive Officer and a Trustee of FREIT, is the Chairman of the Board and Chief Executive Officer of Hekemian. Mr. Robert S. Hekemian, Jr., a Trustee of FREIT, is the President of Hekemian. Trustee fee expense (including interest) incurred by FREIT for the nine months ended July 31, 2016 and 2015 was approximately $401,000 and $403,000, respectively, for Mr. Robert S. Hekemian, and $49,000 and $49,000, respectively, for Mr. Robert S. Hekemian, Jr. and for the three months ended July 31, 2016 and 2015 was approximately $131,000 and $137,000, respectively, for Mr. Robert S. Hekemian, and $16,000 and $18,000, respectively, for Mr. Robert S. Hekemian, Jr (See Note 14). Rotunda 100, LLC and Damascus 100, LLC own the minority interests in Grande Rotunda, LLC and Damascus Centre, LLC, respectively. Rotunda 100, LLC owns a 40% equity interest in Grande Rotunda, LLC and Damascus 100, LLC owns a 30% equity interest in Damascus Centre, LLC, and FREIT owns a 60% equity interest in Grande Rotunda, LLC and a 70% equity interest in Damascus Centre, LLC. The equity owners of Rotunda 100, LLC and Damascus 100, LLC are principally employees of Hekemian. To incentivize the employees of Hekemian, FREIT advanced, only to employees of Hekemian, up to 50% of the amount of the equity contributions that the Hekemian employees were required to invest in Rotunda 100, LLC and Damascus 100, LLC. These advances, which amounted to $5,451,000 at both July 31, 2016 and October 31, 2015, were in the form of secured loans that bear interest that will 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 secured by the Hekemian employees’ interests in Rotunda 100 and Damascus 100, and are full recourse loans. The notes had maturity dates at the earlier of (a) ten (10) years after issue (Grande Rotunda, LLC – 6/19/2015, Damascus Centre, LLC – 9/30/2016), or, (b) at the election of FREIT, ninety (90) days after the borrower terminates employment with Hekemian, at which time all outstanding unpaid principal is due. On June 4, 2015, the Board approved an extension of the maturity date of the secured loans to occur the earlier of (a) June 19, 2018 or (b) five days after the closing of a permanent mortgage loan secured by the Rotunda property. |
Mortgage financings
Mortgage financings | 9 Months Ended |
Jul. 31, 2016 | |
Debt Disclosure [Abstract] | |
Mortgage financings | Note 8 – Mortgage financings: The original Rotunda acquisition loan for $22.5 million, which was subsequently reduced to $19.5 million on February 1, 2010, was acquired by FREIT on May 28, 2013. FREIT subsequently sold this loan to Wells Fargo Bank, the lender providing the construction financing for the expansion of the Rotunda project. On December 9, 2013, Grande Rotunda, LLC closed with Wells Fargo Bank on a construction loan of up to $120 million to be used to redevelop the Rotunda property in Baltimore, Maryland. The construction loan is for a term of four years, with one twelve-month extension, at a rate of 225 basis points over the monthly LIBOR. As of July 31, 2016, $108.1 million of this loan was drawn down (including approximately $15.2 million during Fiscal 2016), of which $19 million was used to pay off the loan from FREIT, and $89.1 million was used toward the construction at the Rotunda. The construction loan contains various covenants, including among others, leasing benchmarks pertaining to the Rotunda’s retail space to be achieved on or before a specified date. As of June 30, 2016, FREIT was not in compliance with this covenant, which, upon notice from the lender, would constitute an event of default. Upon such notice (which as of September 9, 2016, had not been given), FREIT would have 120 days in the aggregate to cure such default. If not cured, the lender could exercise its right to accelerate the loan’s maturity. FREIT is currently in discussions with the lender to waive the noncompliance and/or modify the related covenant. Although FREIT expects the lender to waive and/or modify the covenant, no assurances can be given regarding the outcome of such discussion. On December 29, 2014, FREIT Regency, LLC closed on a $16.2 million mortgage loan with Provident Bank. The loan bears a floating interest rate equal to 125 basis points over the one-month BBA LIBOR and the loan will mature on December 15, 2024. Interest-only payments are required each month through December 15, 2017. Thereafter, principal payments of $27,807 (plus accrued interest) are required each month through maturity. In order to minimize interest rate volatility during the term of the loan, FREIT Regency, LLC entered into an interest rate swap agreement that, in effect, converted the floating interest rate to a fixed interest rate of 3.75% over the term of the loan. Proceeds from the loan were used to pay off the $5 million outstanding balance on FREIT’s credit line, and the remainder of the proceeds will be available to fund future capital expenditures and for general corporate purposes. On December 26, 2012, Damascus Centre, LLC refinanced its construction loan with long-term financing provided by People’s United Bank and the first tranche of the new loan was taken-down in the amount of $20 million. Based on leasing and net operating income at the shopping center, People’s United Bank agreed to a take-down of the second tranche of this loan on April 22, 2016 in the amount of $2,320,000, of which approximately $470,000 was readily available and the remaining $1,850,000 (included in prepaid expenses and other assets in the accompanying condensed consolidated balance sheet) is held in escrow and available to Damascus Centre, LLC once certain tenants open and begin paying rent. The total amount outstanding for both tranches of this loan held with People’s United Bank as of July 31, 2016 was approximately $21 million. The loan has a maturity date of January 3, 2023 and bears a floating interest rate equal to 210 points over the BBA LIBOR. In order to minimize interest rate volatility during the term of this loan, Damascus Centre, LLC entered into an interest rate swap agreement that, in effect, converted the floating interest rate to a fixed interest rate on each tranche of this loan, resulting in a fixed rate of 3.81% over the term of the first tranche of this loan and a fixed rate of 3.53% over the term of the second tranche of this loan. Wayne PSC, LLC entered into an agreement with Metropolitan Life Insurance Company to extend the maturity date on its loan secured by the shopping center owned by Wayne PSC, LLC located in Wayne, New Jersey from June 1, 2016 to October 1, 2016. Under the terms of this agreement, Wayne PSC, LLC will continue to make the monthly principal and interest payment of $206,960 until the month immediately preceding the maturity date and on the maturity date a final payment in the amount of approximately $24.2 million shall become due and payable in full. Wayne PSC, LLC expects to refinance this loan prior to its extended due date. |
Fair value of long-term debt
Fair value of long-term debt | 9 Months Ended |
Jul. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value of long-term debt | Note 9 – Fair value of long-term debt: The following table shows the estimated fair value and carrying value of FREIT’s long-term debt at July 31, 2016 and October 31, 2015: ($ in Millions) July 31, 2016 October 31, 2015 Fair Value $ 329.8 $ 313.5 Carrying Value $ 320.8 $ 304.8 Fair values are estimated based on market interest rates at July 31, 2016 and October 31, 2015 and on 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). |
Segment information
Segment information | 9 Months Ended |
Jul. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment information | Note 10 - Segment information: 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 nine (9) properties after giving effect to the sale of a property on June 17, 2016 (See Note 5), and the residential segment is comprised of seven (7) properties. 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, 2015. The chief operating and decision-making group of FREIT's commercial segment, residential segment and corporate/other is comprised of FREIT’s Board of Trustees (“Board”). FREIT 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, amortization of acquired lease values 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 nine and three-month periods ended July 31, 2016 and 2015. Asset information is not reported since FREIT does not use this measure to assess performance. Nine Months Ended Three Months Ended July 31, July 31, 2016 2015 2016 2015 (In Thousands of Dollars) (In Thousands of Dollars) Real estate rental revenue: Commercial $ 16,952 $ 17,439 $ 5,534 $ 5,751 Residential 16,875 16,456 5,780 5,463 Total real estate revenue 33,827 33,895 11,314 11,214 Real estate operating expenses: Commercial 8,218 7,997 2,754 2,582 Residential 8,029 7,952 2,703 2,525 Total real estate operating expenses 16,247 15,949 5,457 5,107 Net operating income: Commercial 8,734 9,442 2,780 3,169 Residential 8,846 8,504 3,077 2,938 Total net operating income $ 17,580 $ 17,946 $ 5,857 $ 6,107 Recurring capital improvements- residential $ (659 ) $ (275 ) $ (170 ) $ (21 ) Reconciliation to consolidated net income attributable to common equity: Segment NOI $ 17,580 $ 17,946 $ 5,857 $ 6,107 Gain on sale of commercial property 314 — 314 — Deferred rents - straight lining 251 (219 ) 276 (71 ) Amortization of acquired leases — (1 ) — — Investment income 106 113 44 37 General and administrative expenses (1,401 ) (1,653 ) (506 ) (509 ) Depreciation (5,263 ) (4,985 ) (1,791 ) (1,690 ) Financing costs (8,153 ) (8,370 ) (2,737 ) (2,817 ) Net income 3,434 2,831 1,457 1,057 Net income attributable to noncontrolling interests (377 ) (283 ) (211 ) (89 ) Net income attributable to common equity $ 3,057 $ 2,548 $ 1,246 $ 968 |
Income taxes
Income taxes | 9 Months Ended |
Jul. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 11 – Income taxes: FREIT distributed 100% of its ordinary taxable income for the fiscal year ended October 31, 2015 to its shareholders as dividends and intends to distribute 100% of its ordinary taxable income and 100% of the capital gain from the sale of the property in Rochelle Park, New Jersey (See Note 5) to its shareholders as dividends for the fiscal year ending October 31, 2016. Accordingly, no provision for federal or state income taxes related to such ordinary taxable income was recorded in FREIT’s financial statements. As of July 31, 2016, FREIT had no material uncertain income tax positions. The tax years subsequent to and including the fiscal year ended October 31, 2013 remain open to examination by the major taxing jurisdictions to which FREIT is subject. |
Share repurchases
Share repurchases | 9 Months Ended |
Jul. 31, 2016 | |
Equity [Abstract] | |
Share repurchases | Note 12 – Share repurchases: On February 17, 2015, FREIT announced a tender offer to purchase up to 100,000 shares of FREIT’s beneficial interest at a price of $23.00 per share. The tender offer expired on March 20, 2015, and in connection therewith FREIT repurchased 94,302 shares of beneficial interest at $23.00 per share, for an aggregate purchase price of $2,168,946 which it funded principally from cash and cash equivalents. FREIT’s Trustees and executive officers did not tender their shares of beneficial interest in FREIT in the tender offer. |
Stock option plan
Stock option plan | 9 Months Ended |
Jul. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock option plan | Note 13 – Stock option plan: On September 4, 2014, the Board approved the grant of a total of 246,000 non-qualified share options under FREIT’s Equity Incentive Plan to certain FREIT Executive Officers, the members of the Board and certain employees of Hekemian, FREIT’s managing agent. The options have an exercise price of $18.45 per share, will vest in equal annual installments over a 5-year period and will expire 10 years from the date of grant, which will be September 3, 2024. The following table summarizes stock option activity for the nine-month period ended July 31, 2016: Nine Months Ended July 31, 2016 No. of Options Exercise Outstanding Price Options outstanding beginning of period 243,900 $ 18.45 Options granted during period — — Options forfeited/cancelled during period (820 ) $ 18.45 Options outstanding end of period 243,080 $ 18.45 Options expected to vest over term of grant 238,620 Options exercisable at end of period 48,680 For the nine-month periods ended July 31, 2016 and 2015, compensation expense related to stock options granted amounted to $71,000 and $71,000, respectively. For the three-month periods ended July 31, 2016 and 2015, compensation expense related to stock options granted amounted to $24,000 and $24,000, respectively. At July 31, 2016, there was approximately $290,000 of unrecognized compensation cost relating to outstanding non-vested stock options to be recognized over the remaining vesting period. The aggregate intrinsic value of options expected to vest and options exercisable at July 31, 2016 was approximately $597,000 and $122,000, respectively. |
Deferred fee plan
Deferred fee plan | 9 Months Ended |
Jul. 31, 2016 | |
Deferred Compensation Arrangements [Abstract] | |
Deferred fee plan | Note 14 – Deferred fee plan: On September 4, 2014, the Board approved amendments, effective November 1, 2014, to the FREIT Deferred Fee Plan for its Executive Officers and Trustees, one of which provides for the issuance of share units payable in FREIT shares in respect of (i) deferred amounts of all Trustee fees on a prospective basis; (ii) interest on Trustee fees deferred prior to November 1, 2014 (payable at a floating rate, adjusted quarterly, based on the average 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. All fees payable to Trustees for the nine-month period ended July 31, 2015 were deferred under the Deferred Fee Plan, and all fees payable to Trustees for the nine-month period ended July 31, 2016 were deferred under the Deferred Fee Plan except for the fees payable to two Trustees, who elected to receive such fees in cash. As a result of the amendment to the Deferred Fee Plan described above, for the nine-month periods ended July 31, 2016 and 2015, the aggregate amounts of deferred Trustee fees together with related interest and dividends were approximately $574,600 and $588,300, respectively, which have been paid through the issuance of 29,473 and 29,385, 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 nine-month periods ended July 31, 2016 and 2015, FREIT has charged as expense approximately $521,500 and $570,900 of the aggregate amounts of deferred Trustee fees and related interest and dividends for these periods, respectively, representing Trustee fees and interest to expense and the balance of approximately $53,100 and $17,400, respectively, representing dividends payable in respect of share units allocated to Plan participants, has been charged to equity. |
Fair value of long-term debt (T
Fair value of long-term debt (Tables) | 9 Months Ended |
Jul. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of estimated fair value and carrying value of long-term debt | The following table shows the estimated fair value and carrying value of FREITÂ’s long-term debt at July 31, 2016 and October 31, 2015: ($ in Millions) July 31, 2016 October 31, 2015 Fair Value $ 329.8 $ 313.5 Carrying Value $ 320.8 $ 304.8 |
Segment information (Tables)
Segment information (Tables) | 9 Months Ended |
Jul. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of segment and related information | 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 nine and three-month periods ended July 31, 2016 and 2015. Asset information is not reported since FREIT does not use this measure to assess performance. Nine Months Ended Three Months Ended July 31, July 31, 2016 2015 2016 2015 (In Thousands of Dollars) (In Thousands of Dollars) Real estate rental revenue: Commercial $ 16,952 $ 17,439 $ 5,534 $ 5,751 Residential 16,875 16,456 5,780 5,463 Total real estate revenue 33,827 33,895 11,314 11,214 Real estate operating expenses: Commercial 8,218 7,997 2,754 2,582 Residential 8,029 7,952 2,703 2,525 Total real estate operating expenses 16,247 15,949 5,457 5,107 Net operating income: Commercial 8,734 9,442 2,780 3,169 Residential 8,846 8,504 3,077 2,938 Total net operating income $ 17,580 $ 17,946 $ 5,857 $ 6,107 Recurring capital improvements- residential $ (659 ) $ (275 ) $ (170 ) $ (21 ) Reconciliation to consolidated net income attributable to common equity: Segment NOI $ 17,580 $ 17,946 $ 5,857 $ 6,107 Gain on sale of commercial property 314 — 314 — Deferred rents - straight lining 251 (219 ) 276 (71 ) Amortization of acquired leases — (1 ) — — Investment income 106 113 44 37 General and administrative expenses (1,401 ) (1,653 ) (506 ) (509 ) Depreciation (5,263 ) (4,985 ) (1,791 ) (1,690 ) Financing costs (8,153 ) (8,370 ) (2,737 ) (2,817 ) Net income 3,434 2,831 1,457 1,057 Net income attributable to noncontrolling interests (377 ) (283 ) (211 ) (89 ) Net income attributable to common equity $ 3,057 $ 2,548 $ 1,246 $ 968 |
Stock option plan (Tables)
Stock option plan (Tables) | 9 Months Ended |
Jul. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | The following table summarizes stock option activity for the nine-month period ended July 31, 2016: Nine Months Ended July 31, 2016 No. of Options Exercise Outstanding Price Options outstanding beginning of period 243,900 $ 18.45 Options granted during period — — Options forfeited/cancelled during period (820 ) $ 18.45 Options outstanding end of period 243,080 $ 18.45 Options expected to vest over term of grant 238,620 Options exercisable at end of period 48,680 |
Earnings per share (Details)
Earnings per share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Earnings Per Share [Abstract] | ||||
Shares arising from assumed exercise of stock options | 13,000 | 8,000 | 0 | 1,000 |
Interest rate swap contracts (D
Interest rate swap contracts (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Oct. 31, 2015 | Apr. 22, 2016 | Dec. 26, 2012 | |
Total loan carrying amount | $ 323,206,000 | $ 323,206,000 | $ 307,899,000 | |||
Unrealized gain (loss) on derivatives | (774,000) | $ 415,000 | (1,615,000) | (1,581,000) | ||
Interest rate swap contract liabilities | 2,681,000 | 2,681,000 | 1,066,000 | |||
Regency Swap [Member] | ||||||
Interest rate swap contract liabilities | 1,792,000 | 1,792,000 | 945,000 | |||
Damascus Centre Swap [Member] | ||||||
Interest rate swap contract liabilities | 889,000 | 889,000 | $ 121,000 | |||
Provident Bank [Member] | ||||||
Loan amount | 16,200,000 | 16,200,000 | ||||
Total loan carrying amount | 5,000,000 | 5,000,000 | ||||
Notional amount of interest rate swap | $ 16,200,000 | $ 16,200,000 | ||||
Maturity date | Dec. 15, 2024 | |||||
Fixed interest rate | 3.75% | 3.75% | ||||
Basis points, interest rate | 1.25% | |||||
Maturity date of loan | Dec. 15, 2024 | |||||
People's United Bank [Member] | ||||||
Total loan carrying amount | $ 21,000,000 | $ 21,000,000 | ||||
Notional amount of interest rate swap | 21,000,000 | 21,000,000 | ||||
People's United Bank [Member] | Tranche One [Member] | ||||||
Loan amount | $ 20,000,000 | |||||
Notional amount of interest rate swap | $ 18,900,000 | $ 18,900,000 | ||||
Fixed interest rate | 3.81% | 3.81% | ||||
Basis points, interest rate | 2.10% | 2.10% | ||||
Maturity date of loan | Jan. 3, 2023 | Jan. 3, 2023 | ||||
People's United Bank [Member] | Tranche Two [Member] | ||||||
Loan amount | $ 2,320,000 | |||||
Fixed interest rate | 3.53% | 3.53% | ||||
Basis points, interest rate | 2.10% | 2.10% | ||||
Amount of loan readily available | 470,000 | |||||
Amount of loan held in escrow | $ 1,850,000 | |||||
Maturity date of loan | Jan. 3, 2023 | Jan. 3, 2023 |
Sale of property (Details)
Sale of property (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2016 | Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | Jun. 17, 2016 | |
Real Estate Properties [Line Items] | ||||||
Agreed sales price of property held for sale | $ 3,059,000 | |||||
Gain on sale of property held for sale | $ 314,000 | 314,000 | ||||
Lakeland Bank Property [Member] | ||||||
Real Estate Properties [Line Items] | ||||||
Rental properties | $ 2,700,000 | |||||
Straight-line rent receivable on property held for sale | $ 500,000 | |||||
Agreed sales price of property held for sale | $ 3,100,000 | |||||
Gain on sale of property held for sale | $ 314,000 | |||||
Maximum purchase price of property | 3,000,000 | |||||
Lost annual rents due to sale of property | $ 241,000 |
Capitalized interest (Details)
Capitalized interest (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Capitalized interest [Abstract] | ||||
Interest capitalized | $ 916,000 | $ 667,000 | $ 2,611,000 | $ 1,600,000 |
Management agreement, fees an30
Management agreement, fees and transactions with related party (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | Oct. 31, 2015 | |
Related Party Transaction [Line Items] | |||||
Asset management fees | $ 515,000 | $ 504,000 | $ 1,501,000 | $ 1,489,000 | |
Trustee fees and related interest payable in stock units | 574,000 | ||||
Secured loans receivable | 5,451,000 | 5,451,000 | $ 5,451,000 | ||
Managing Agent Hekemian & Co [Member] | |||||
Related Party Transaction [Line Items] | |||||
Asset management fees | 485,000 | 479,000 | 1,419,000 | 1,412,000 | |
Leasing commissions and reimbursement of operating expenses | 147,000 | 77,000 | 452,000 | 213,000 | |
Insurance commissions | 101,000 | 98,000 | 164,000 | 155,000 | |
Affiliated Entity 1 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Redevelopment fees | 33,000 | 340,000 | 391,000 | 1,133,000 | |
Robert S. Hekemian [Member] | |||||
Related Party Transaction [Line Items] | |||||
Trustee fees and related interest payable in stock units | 131,000 | 137,000 | 401,000 | 403,000 | |
Robert S. Hekemian, Jr. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Trustee fees and related interest payable in stock units | $ 16,000 | $ 18,000 | $ 49,000 | $ 49,000 | |
Grande Rotunda, LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Ownership by noncontrolling owners (percentage) | 40.00% | 40.00% | 40.00% | ||
Ownership by parent (percentage) | 60.00% | 60.00% | 60.00% | ||
Damascus Centre, LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Ownership by noncontrolling owners (percentage) | 30.00% | 30.00% | 30.00% | ||
Ownership by parent (percentage) | 70.00% | 70.00% | 70.00% |
Mortgage financings (Details)
Mortgage financings (Details) - USD ($) | Feb. 01, 2010 | Jul. 31, 2016 | Jul. 31, 2016 | Jul. 31, 2015 | Apr. 22, 2016 | Oct. 31, 2015 | Dec. 26, 2012 |
Debt Instrument [Line Items] | |||||||
Total loan carrying amount | $ 323,206,000 | $ 323,206,000 | $ 307,899,000 | ||||
Construction and pre-development costs | 16,871,000 | $ 37,806,000 | |||||
Proceeds from construction loan | 15,214,000 | $ 38,170,000 | |||||
People's United Bank [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Total loan carrying amount | $ 21,000,000 | $ 21,000,000 | |||||
People's United Bank [Member] | Tranche One [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Loan amount | $ 20,000,000 | ||||||
Fixed interest rate | 3.81% | 3.81% | |||||
Basis points, interest rate | 2.10% | 2.10% | |||||
Maturity date of loan | Jan. 3, 2023 | Jan. 3, 2023 | |||||
People's United Bank [Member] | Tranche Two [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Loan amount | $ 2,320,000 | ||||||
Amount of loan readily available | 470,000 | ||||||
Amount of loan held in escrow | $ 1,850,000 | ||||||
Fixed interest rate | 3.53% | 3.53% | |||||
Basis points, interest rate | 2.10% | 2.10% | |||||
Maturity date of loan | Jan. 3, 2023 | Jan. 3, 2023 | |||||
Provident Bank [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Loan amount | $ 16,200,000 | $ 16,200,000 | |||||
Basis points, interest rate | 1.25% | ||||||
Total loan carrying amount | $ 5,000,000 | $ 5,000,000 | |||||
Maturity date of loan | Dec. 15, 2024 | ||||||
Annual interest costs | 3.75% | 3.75% | |||||
Monthly principal payment amount | $ 27,807 | ||||||
Wayne PSC, LLC Loan [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maturity date of loan | Oct. 1, 2016 | ||||||
Monthly principal payment amount | $ 206,960 | ||||||
Final payment due on loan upon maturity | 24,200,000 | ||||||
Baltimore, MD [Member] | People's United Bank [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Refinanced loan amount | $ 19,500,000 | ||||||
Loan amount | $ 22,500,000 | $ 120,000,000 | $ 120,000,000 | ||||
Basis points, interest rate | 2.25% | ||||||
Term of the loan | 4 years | ||||||
Baltimore, MD [Member] | Notes Payable, Other Payables [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Construction and pre-development costs | $ 89,100,000 | ||||||
Line of credit | $ 108,100,000 | 108,100,000 | |||||
Repayments of debt to affiliate | $ 19,000,000 |
Fair value of long-term debt (D
Fair value of long-term debt (Details) - USD ($) $ in Thousands | Jul. 31, 2016 | Oct. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Fair value of long-term debt | $ 329,800 | $ 313,500 |
Carrying value of long-term debt | $ 320,764 | $ 304,770 |
Segment information (Details)
Segment information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2016USD ($)properties | Jul. 31, 2015USD ($) | Jul. 31, 2016USD ($)propertiessegments | Jul. 31, 2015USD ($)segments | |
Reportable Segments | ||||
Real estate rental revenue | $ 11,590 | $ 11,143 | $ 34,078 | $ 33,675 |
Real estate operating expenses | 7,754 | 7,306 | 22,911 | 22,587 |
Operating income | 3,836 | 3,837 | 11,167 | 11,088 |
Reconciliation to consolidated net income: | ||||
Segment NOI | 5,857 | 6,107 | 17,580 | 17,946 |
Gain on sale of commercial property | 314 | 314 | ||
Deferred rents - straight lining | 276 | (71) | 251 | (219) |
Amortization of acquired leases | (1) | |||
Investment income | 44 | 37 | 106 | 113 |
General and administrative expenses | (506) | (509) | (1,401) | (1,653) |
Depreciation | (1,791) | (1,690) | (5,263) | (4,985) |
Financing costs | (2,737) | (2,817) | (8,153) | (8,370) |
Net income | 1,457 | 1,057 | 3,434 | 2,831 |
Net income attributable to noncontrolling interests in subsidiaries | (211) | (89) | (377) | (283) |
Net income attributable to common equity | $ 1,246 | 968 | $ 3,057 | $ 2,548 |
Number of reportable segments | segments | 2 | 2 | ||
Commercial [Member] | ||||
Reconciliation to consolidated net income: | ||||
Number of properties | properties | 9 | 9 | ||
Residential [Member] | ||||
Reportable Segments | ||||
Recurring capital improvements | $ (170) | (21) | $ (659) | $ (275) |
Reconciliation to consolidated net income: | ||||
Number of properties | properties | 7 | 7 | ||
Operating Segments [Member] | ||||
Reportable Segments | ||||
Real estate rental revenue | $ 11,314 | 11,214 | $ 33,827 | 33,895 |
Real estate operating expenses | 5,457 | 5,107 | 16,247 | 15,949 |
Operating income | 5,857 | 6,107 | 17,580 | 17,946 |
Operating Segments [Member] | Commercial [Member] | ||||
Reportable Segments | ||||
Real estate rental revenue | 5,534 | 5,751 | 16,952 | 17,439 |
Real estate operating expenses | 2,754 | 2,582 | 8,218 | 7,997 |
Operating income | 2,780 | 3,169 | 8,734 | 9,442 |
Operating Segments [Member] | Residential [Member] | ||||
Reportable Segments | ||||
Real estate rental revenue | 5,780 | 5,463 | 16,875 | 16,456 |
Real estate operating expenses | 2,703 | 2,525 | 8,029 | 7,952 |
Operating income | $ 3,077 | $ 2,938 | $ 8,846 | $ 8,504 |
Income taxes (Details)
Income taxes (Details) | 12 Months Ended |
Oct. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Ordinary taxable income distributed as dividends (percentage) | 100.00% |
Share repurchases (Details)
Share repurchases (Details) | Feb. 17, 2015USD ($)$ / sharesshares |
Equity [Abstract] | |
Number of shares authorized to repurchase | 100,000 |
Number of shares repurchased | 94,302 |
Stock repurchased price (per share) | $ / shares | $ 23 |
Shares repurchased, value | $ | $ 2,168,946 |
Stock option plan (Details)
Stock option plan (Details) - Employee Stock Option [Member] - USD ($) | Sep. 04, 2014 | Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Plan term | 10 years | ||||
Vesting term | 5 years | ||||
No. of Options Outstanding | |||||
Options outstanding beginning of period | 243,900 | ||||
Options granted during period | 246,000 | ||||
Options forfeited/cancelled during the period | (820) | ||||
Options outstanding end of period | 243,080 | 243,080 | |||
Options expected to vest over term of grant | 238,620 | 238,620 | |||
Options exercisable at end of period | 48,680 | 48,680 | |||
Exercise Price | |||||
Options outstanding beginning of period | $ 18.45 | ||||
Options granted during period | $ 18.45 | ||||
Options forfeited/cancelled during period | 18.45 | ||||
Options outstanding end of period | $ 18.45 | $ 18.45 | |||
Compensation expense related to stock options | $ 24,000 | $ 24,000 | $ 71,000 | $ 71,000 | |
Unrecognized compensation cost | 290,000 | 290,000 | |||
Aggregate intrinsic value of options expected to vest | 597,000 | 597,000 | |||
Aggregate intrinsic value of options exercisable | $ 122,000 | $ 122,000 |
Deferred fee plan (Details)
Deferred fee plan (Details) - USD ($) | 9 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Oct. 31, 2015 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Trustee fee expense | $ 574,000 | ||
Dividends payable | 2,018,000 | $ 2,018,000 | $ 2,018,000 |
Deferred Fee Plan [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Trustee fee expense | 521,500 | 570,900 | |
Deferred trustee fees | $ 574,600 | $ 588,300 | |
Basis spread on any deferred fee (percentage) | 1.50% | ||
Term of distribution to participants | 10 years | ||
Shares issued | 29,473 | 29,385 | |
Dividends payable | $ 53,100 | $ 17,400 |