Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jan. 31, 2022 | Mar. 17, 2022 | |
Cover [Abstract] | ||
Entity Central Index Key | 0000036840 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jan. 31, 2022 | |
Current Fiscal Year End Date | --10-31 | |
Document Fiscal Year Focus | 2022 | |
Document Transition Report | false | |
Entity File Number | 000-25043 | |
Entity Registrant Name | FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 22-1697095 | |
Entity Address, Address Line One | 505 Main Street | |
Entity Address, City or Town | Hackensack | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07601 | |
City Area Code | 201 | |
Local Phone Number | 488-6400 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | FREVS | |
Name of Exchange on which Security is Registered | NONE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 6,863,744 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jan. 31, 2022 | Oct. 31, 2021 |
ASSETS | ||
Real estate, at cost, net of accumulated depreciation | $ 96,999 | $ 270,634 |
Construction in progress | 668 | 665 |
Cash and cash equivalents | 95,438 | 35,891 |
Investment in tenancy-in-common | 18,902 | 19,383 |
Tenants' security accounts | 1,062 | 1,340 |
Receivables arising from straight-lining of rents | 762 | 3,747 |
Accounts receivable, net of allowance for doubtful accounts of $1,327 and $966 as of January 31, 2022 and October 31, 2021, respectively | 754 | 1,622 |
Secured loans receivable (related party) | 221 | 5,292 |
Funds held in post-closing escrow | 9,337 | |
Prepaid expenses and other assets | 3,059 | 5,493 |
Deferred charges, net | 193 | 2,038 |
Interest rate swap contract | 71 | |
Total Assets | 227,466 | 346,105 |
Liabilities: | ||
Mortgages payable, including deferred interest of $358 as of January 31, 2022 and October 31, 2021 | 137,774 | 301,276 |
Less unamortized debt issuance costs | 1,283 | 1,400 |
Mortgages payable, net | 136,491 | 299,876 |
Due to affiliate | 3,252 | |
Deferred director compensation payable | 2,475 | 2,475 |
Accounts payable and accrued expenses | 2,804 | 2,375 |
Dividends payable | 686 | 686 |
Tenants' security deposits | 1,305 | 2,039 |
Deferred revenue | 559 | 1,143 |
Interest rate cap and swap contracts | 1,117 | 2,308 |
Total Liabilities | 145,437 | 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, respectively, at January 31, 2022 and October 31, 2021 | ||
Common stock with par value of $0.01 per share: 20,000,000 shares authorized at January 31, 2022 and October 31, 2021; 6,860,048 shares issued plus 178,419 and 175,923 vested share units granted to Directors at January 31, 2022 and October 31, 2021, respectively | 71 | 71 |
Additional paid-in-capital | 25,622 | 25,556 |
Retained earnings | 58,037 | 12,963 |
Accumulated other comprehensive loss | (1,089) | (2,017) |
Total Common Equity | 82,641 | 36,573 |
Noncontrolling interests in subsidiaries | (612) | (4,622) |
Total Equity | 82,029 | 31,951 |
Total Liabilities and Equity | $ 227,466 | $ 346,105 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jan. 31, 2022 | Oct. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 1,327 | $ 966 |
Deferred interest | $ 358 | $ 358 |
Preferred stock, par value per share | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 6,860,048 | 6,860,048 |
Common vested share units to Directors | 178,419 | 175,923 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Revenue: | ||
Rental income | $ 9,763 | $ 10,850 |
Reimbursements | 757 | 1,544 |
Sundry income | 129 | 360 |
Total revenue | 10,649 | 12,754 |
Expenses: | ||
Operating expenses | 4,293 | 4,108 |
Management fees | 497 | 526 |
Real estate taxes | 1,863 | 1,917 |
Depreciation | 1,820 | 2,295 |
Total expenses | 8,473 | 8,846 |
Operating income | 2,176 | 3,908 |
Investment income | 26 | 30 |
Loss on investment in tenancy-in-common | (124) | (27) |
Net gain on sale of Maryland properties | 70,003 | |
Interest expense including amortization of deferred financing costs | (2,928) | (3,132) |
Net income | 69,153 | 779 |
Net income attributable to noncontrolling interests in subsidiaries | (23,376) | (221) |
Net income attributable to common equity | $ 45,777 | $ 558 |
Earnings per share: | ||
Basic | $ 6.51 | $ 0.08 |
Diluted | $ 6.45 | $ 0.08 |
Weighted average shares outstanding: | ||
Basic | 7,036 | 7,009 |
Diluted | 7,099 | 7,009 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 69,153 | $ 779 |
Other comprehensive income: | ||
Unrealized gain on interest rate cap and swap contracts before reclassifications | 756 | 189 |
Amount reclassified from accumulated other comprehensive loss to interest expense | 506 | 309 |
Net unrealized gain on interest rate cap and swap contracts | 1,262 | 498 |
Comprehensive income | 70,415 | 1,277 |
Net income attributable to noncontrolling interests in subsidiaries | (23,376) | (221) |
Other comprehensive income: | ||
Unrealized gain on interest rate cap and swap contracts attributable to noncontrolling interests in subsidiaries | (334) | (111) |
Comprehensive income attributable to noncontrolling interests in subsidiaries | (23,710) | (332) |
Comprehensive income attributable to common equity | $ 46,705 | $ 945 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Shares of Beneficial Interest [Member] | Treasury Shares at Cost [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Total Common Equity [Member] | Noncontrolling Interests in Subsidiaries [Member] | Total |
Balance at Oct. 31, 2020 | $ 27,960 | $ (2,863) | $ 13,791 | $ (3,986) | $ 34,902 | $ (4,039) | $ 30,863 | ||
Balance, shares at Oct. 31, 2020 | 7,145 | 137 | |||||||
Stock based compensation expense | $ 12 | 12 | 12 | ||||||
Vested share units granted to Directors, including dividends declared payable in share units (per share) | $ 118 | 118 | 118 | ||||||
Vested share units granted to Directors, including dividends declared payable in share units (per share), shares | 7 | ||||||||
Net income | 558 | 558 | 221 | 779 | |||||
Dividends declared, including payable in share units (per share) | (350) | (350) | (350) | ||||||
Net unrealized gain on interest rate cap and swap contracts | 387 | 387 | 111 | 498 | |||||
Balance at Jan. 31, 2021 | $ 28,090 | $ (2,863) | 13,999 | (3,599) | 35,627 | (3,707) | 31,920 | ||
Balance, shares at Jan. 31, 2021 | 7,152 | 137 | |||||||
Balance at Oct. 31, 2021 | $ 71 | $ 25,556 | 12,963 | (2,017) | 36,573 | (4,622) | 31,951 | ||
Balance, shares at Oct. 31, 2021 | 7,036 | ||||||||
Stock based compensation expense | 5 | 5 | 5 | ||||||
Vested share units granted to Directors, including dividends declared payable in share units (per share) | 61 | 61 | 61 | ||||||
Vested share units granted to Directors, including dividends declared payable in share units (per share), shares | 2 | ||||||||
Distributions to noncontrolling interests in subsidiaries | (19,700) | (19,700) | |||||||
Net income | 45,777 | 45,777 | 23,376 | 69,153 | |||||
Dividends declared, including payable in share units (per share) | (703) | (703) | (703) | ||||||
Net unrealized gain on interest rate cap and swap contracts | 928 | 928 | 334 | 1,262 | |||||
Balance at Jan. 31, 2022 | $ 71 | $ 25,622 | $ 58,037 | $ (1,089) | $ 82,641 | $ (612) | $ 82,029 | ||
Balance, shares at Jan. 31, 2022 | 7,038 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Stock dividends payable | $ 17 | $ 8 |
Dividends declared, per share | $ 0.10 | $ 0.05 |
Directors [Member] | ||
Stock dividends payable | $ 17 | $ 8 |
Dividends declared, per share | $ 0.10 | $ 0.05 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Operating activities: | ||
Net income | $ 69,153 | $ 779 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Net gain on sale of Maryland properties | (70,003) | |
Depreciation | 1,820 | 2,295 |
Amortization | 434 | 404 |
Stock based compensation expense | 5 | 12 |
Director fees and related interest paid in stock units | 44 | 110 |
Loss on investment in tenancy-in-common | 124 | 27 |
Deferred rents - straight line rent | 10 | 206 |
Deferred real estate tax appeal fees | 35 | |
Bad debt expense | 408 | 171 |
Changes in operating assets and liabilities: | ||
Tenants' security accounts | (734) | (46) |
Accounts receivable, prepaid expenses and other assets | 2,139 | 548 |
Accounts payable, accrued expenses and deferred director compensation payable | 91 | 728 |
Deferred revenue | (584) | (115) |
Due to affiliate - accrued interest | (47) | 44 |
Deferred interest on mortgages | (2) | |
Net cash provided by operating activities | 2,895 | 5,161 |
Investing activities: | ||
Proceeds from sale of Maryland properties, net | 247,412 | |
Proceeds from payment of secured loans receivable inclusive of accrued interest | 5,094 | |
Capital improvements - existing properties | (485) | (409) |
Deferred leasing costs | (60) | (65) |
Distribution from investment in tenancy-in-common | 357 | |
Net cash provided by (used in) investing activities | 252,318 | (474) |
Financing activities: | ||
Repayment of mortgages | (171,002) | (969) |
Proceeds from mortgage loan refinancing | 7,500 | |
Deferred financing costs | (246) | (73) |
Due to affiliate - loan repayment | (3,205) | |
Dividends paid | (686) | |
Distributions to noncontrolling interests in subsidiaries | (19,700) | |
Net cash used in financing activities | (187,339) | (1,042) |
Net increase in cash, cash equivalents and restricted cash | 67,874 | 3,645 |
Cash, cash equivalents and restricted cash, beginning of period | 39,045 | 39,517 |
Cash, cash equivalents and restricted cash, end of period | 106,919 | 43,162 |
Supplemental disclosure of cash flow data: | ||
Interest paid | 2,525 | 2,472 |
Operating activities: | ||
Commercial tenant security deposits applied to accounts receivable | 18 | |
Investing activities: | ||
Accrued transactional costs for sales of Maryland properties | 407 | |
Accrued capital expenditures, construction costs and pre-development costs | 58 | 75 |
Financing activities: | ||
Dividends declared but not paid | 686 | 342 |
Dividends paid in share units | $ 17 | $ 8 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Reconciliation of Cash Reported in Balance Sheet) - USD ($) $ in Thousands | Jan. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2021 | Oct. 31, 2020 |
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets: | ||||
Cash and cash equivalents | $ 95,438 | $ 35,891 | $ 39,788 | |
Tenants' security accounts | 1,062 | 1,451 | ||
Funds held in post closing escrow | 9,337 | |||
Mortgage escrows (included in prepaid expenses and other assets) | 1,082 | 1,923 | ||
Total cash, cash equivalents and restricted cash | $ 106,919 | $ 39,045 | $ 43,162 | $ 39,517 |
Basis of presentation
Basis of presentation | 3 Months Ended |
Jan. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Note 1 – Basis of presentation: First Real Estate Investment Trust of New Jersey (“FREIT”) was organized on November 1, 1961 as a New Jersey Business Trust. On July 1, 2021, FREIT 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 FREIT’s affairs from New Jersey law to Maryland law and was accomplished by the merger of FREIT with and into its wholly owned subsidiary, First Real Estate Investment Trust of New Jersey, Inc. (“FREIT Maryland”, “Trust”, “us”, “we”, “our” or the “Company”), a Maryland corporation. As a result of the Reincorporation, the separate existence of FREIT ceased and FREIT Maryland succeeded to all the business, properties, assets and liabilities of FREIT. Holders of shares of beneficial interest in FREIT received one newly issued share of common stock of FREIT Maryland for each share of FREIT that they own, without any action of stockholders required and all treasury stock held by FREIT was retired. FREIT Maryland 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 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 three-month period ended January 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 the Annual Report on Form 10-K for the year ended October 31, 2021 of FREIT Maryland. Reclassification: Certain prior year cash flow line items have been reclassified to conform to the current year presentation. |
Recently issued accounting stan
Recently issued accounting standard | 3 Months Ended |
Jan. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recently issued accounting standard | Note 2 – Recently issued accounting standard: 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 Reference Rate Reform (ASC 848): Scope |
Dividends and earnings per shar
Dividends and earnings per share | 3 Months Ended |
Jan. 31, 2022 | |
Earnings per share: | |
Dividends and earnings per share | Note 3 – Dividends and earnings per share: The FREIT Maryland Board of Directors (“Board”) declared a dividend of $0.10 per share in the first quarter which was paid on March 15, 2022 to stockholders of record on March 1, 2022. The Board will continue to evaluate the dividend on a quarterly basis. 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 attributable to future services, are used to repurchase FREIT Maryland’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 three months ended January 31, 2022, the outstanding stock options increased the average dilutive shares outstanding by approximately 63,000 shares with an impact of approximately $0.06 on earnings per share. For the three months ended January 31, 2021, the outstanding stock options were anti-dilutive with no impact on earnings per share. There were approximately 0 and 311,000, anti-dilutive shares for the three months ended January 31, 2022 and 2021, respectively. Anti-dilutive shares consist of out-of-the money stock options under the Equity Incentive Plan (See Note 13). |
Interest rate cap and swap cont
Interest rate cap and swap contracts | 3 Months Ended |
Jan. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest rate cap and swap contracts | Note 4 – Interest rate cap and swap contracts: In accordance with “ Accounting Standards Codification Topic 815, Derivatives and Hedging ("ASC 815") For the three months ended January 31, 2022 and 2021, FREIT Maryland recorded an unrealized gain of approximately $1,262,000 and $498,000, respectively, in the condensed consolidated statements of comprehensive income representing the change in the fair value of these cash flow hedges during such periods. As of January 31, 2022, there was an asset of approximately $71,000 for the Wayne PSC swap and a liability of approximately $475,000 for the Regency swap and $642,000 for the Station Place swap. As of October 31, 2021, there was a liability of approximately $278,000 for the Damascus Centre swaps, $348,000 for the Wayne PSC swap, $750,000 for the Regency swap, $932,000 for the Station Place swap and $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). |
Investment in tenancy-in-common
Investment in tenancy-in-common | 3 Months Ended |
Jan. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in tenancy-in-common | Note 5 – Investment in tenancy-in-common: On February 28, 2020, FREIT Maryland 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 Maryland owned a 65% membership interest in S&A, which owned 100% of the Pierre Towers property located in Hackensack, New Jersey through its 100% interest in Pierre Towers, LLC. Pursuant to the TIC agreement, FREIT Maryland ultimately acquired a 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 Maryland’s investment in the TIC was approximately $18.9 million and $19.4 million at January 31, 2022 and October 31, 2021, respectively, with a loss on investment in TIC of approximately $124,000 and $27,000, in the accompanying condensed consolidated statements of income for the three months ended January 31, 2022 and 2021, respectively. 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 for successive periods of one year unless either party gives not less than sixty (60) days prior notice of non-renewal. The management agreement requires the payment of management fees equal to 5% of rents collected. Management fees charged to operations were approximately $98,000 and $93,000 for the three months ended January 31, 2022 and 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 and $10,000 for the three months ended January 31, 2022 and 2021, respectively. Index Page 11 The following table summarizes the balance sheets of the Pierre Towers property as of January 31, 2022 and October 31, 2021, accounted for by the equity method: January 31, October 31, 2022 2021 (In Thousands of Dollars) Real estate, net $ 77,508 $ 78,023 Cash and cash equivalents 1,205 1,338 Tenants' security accounts 475 484 Receivables and other assets 359 510 Total assets $ 79,547 $ 80,355 Mortgages payable, net of unamortized debt issuance costs $ 49,624 $ 49,691 Accounts payable and accrued expenses 275 261 Tenants' security deposits 475 484 Deferred revenue 93 99 Equity 29,080 29,820 Total liabilities & equity $ 79,547 $ 80,355 FREIT Maryland's investment in TIC (65% interest) $ 18,902 $ 19,383 The following table summarizes the statements of operations of the Pierre Towers property for the three months ended January 31, 2022 and 2021, accounted for by the equity method: Three Months Ended January 31, 2022 2021 (In Thousands of Dollars) Revenue $ 1,954 $ 1,891 Operating expenses 1,201 991 Depreciation 542 540 Operating income 211 360 Interest expense including amortization of deferred financing costs 401 401 Net loss $ (190 ) $ (41 ) FREIT Maryland's loss on investment in TIC (65% interest) $ (124 ) $ (27 ) |
Termination of Purchase and Sal
Termination of Purchase and Sale Agreement | 3 Months Ended |
Jan. 31, 2022 | |
Business Combination, Consideration Transferred [Abstract] | |
Termination of Purchase and Sale Agreement | Note 6 – Termination of Purchase and Sale Agreement: On January 14, 2020, FREIT Maryland and certain of its affiliates (collectively, the “Sellers”), entered into a Purchase and Sale Agreement (as subsequently amended, the “Purchase and Sale Agreement”) with Sinatra Properties LLC (the “Purchaser”), which provides for the sale by the Sellers to the Purchaser of 100% of the Sellers’ ownership interests in six real properties held by the Sellers in exchange for the purchase price described therein, subject to the terms and conditions of the Purchase and Sale Agreement. On April 30, 2020, the Sellers delivered written notice to the Purchaser of the Sellers’ termination of the Purchase and Sale Agreement in accordance with its terms due to the occurrence of a “Purchaser Default” thereunder, based on the Purchaser’s failure to perform its obligations under the Purchase and Sale Agreement and close the transactions contemplated therein. Upon the execution of the Purchase and Sale Agreement, the Purchaser delivered into escrow a deposit in the amount of $15 million (the “Deposit”), in the form of an unconditional, irrevocable letter of credit in such amount (the “Letter of Credit”). The Purchase and Sale Agreement provides that the Sellers’ exclusive remedy, in the event of a “Purchaser Default” and the termination of the Purchase and Sale Agreement, is the forfeiture of the Deposit to the Sellers as liquidated damages. Accordingly, contemporaneously with the Sellers’ delivery of the termination notice to the Purchaser, the Sellers delivered written notice to the escrow agent requesting that the escrow agent release the Letter of Credit from escrow and deliver same to the Sellers. On May 6, 2020, the Purchaser filed a complaint (the “Complaint”) against the Sellers in the Superior Court of New Jersey, in which, among other things, the Purchaser alleged breach of contract and breach of the covenant of good faith and fair dealing against the Sellers in connection with the Sellers’ termination of the Purchase and Sale Agreement. The Purchaser sought (a) a judgment of specific performance compelling the Sellers to convey the properties under the Purchase and Sale Agreement to the Purchaser; (b) declaratory judgment from the court that (i) the Purchase and Sale Agreement was not terminated, (ii) the Purchaser was not in default under the Purchase and Sale Agreement, and (iii) the Sellers were in default under the Purchase and Sale Agreement, subject to a right to cure; (c) an order for injunctive relief compelling the Sellers to perform the Purchase and Sale Agreement; (d) in the event that the court did not order specific performance, a judgment directing that the Purchaser’s $15 million deposit under the Purchase and Sale Agreement be returned to the Purchaser, and compensatory, consequential and incidental damages in an amount to be determined at trial; and (e) attorneys’ fees and costs. Index Page 12 The Purchaser filed lis pendens with respect to each of the six properties that were subject to the Purchase and Sale Agreement, providing notice to the public of the Complaint. The lis pendens have been dismissed by the Court pursuant to the Order entered on February 4, 2022 discussed below. Accordingly, subject to the Purchaser’s possible challenge of the Court’s Order, the future sale or financing of these properties is not affected by the lis pendens. On June 17, 2020, the Sellers filed their answer, separate defenses, and counterclaims (the “Answer”) in response to the Complaint, in which, among other things, the Sellers (a) denied the Purchaser’s claim that the Sellers’ termination of the Purchase and Sale Agreement was wrongful, and asserted that there was no contractual basis in the Purchase and Sale Agreement to relieve the Purchaser from its obligation to perform thereunder, or to defer or postpone the Purchaser’s obligation to perform, (b) asserted certain defenses to the allegations set forth in the Complaint without admitting any liability, and (c) requested relief from the Court in the form of (i) judgment in the Sellers’ favor dismissing all of the Purchaser’s claims against them with prejudice and denying all of the Purchaser’s requests for relief, (ii) reasonable attorneys’ fees and costs, and (iii) such other and further relief as the Court deemed just. In addition, the Answer asserted counterclaims by the Sellers against the Purchaser for breach of contract due to the Purchaser’s failure to close the Purchase and Sale Agreement in accordance with its terms, and the Sellers sought a declaratory judgment from the Court that the Sellers properly terminated the Purchase and Sale Agreement in accordance with its terms due to the Purchaser’s default and an order from the Court that the Purchaser authorized the escrow agent to release the $15 million deposit under the Purchase and Sale Agreement to the Sellers. On April 28, 2021, the Sellers amended the Answer to include (1) counterclaims against the Purchaser for breach of contract due to the Purchaser’s breach of confidentiality and non-disclosure obligations contained in the Purchase and Sale Agreement, and (2) third-party claims against Purchaser’s affiliate Kushner Realty Acquisition LLC for breach of its confidentiality and non-disclosure obligations contained in the non-disclosure agreement entered into by the parties in connection with the negotiation of the transactions contemplated by the Purchase and Sale Agreement, based on the conduct of the Purchaser and its affiliates after the Sellers terminated the Purchase and Sale Agreement. In connection with these counterclaims and third-party claims, the Answer sought the following relief from the Court: (a) liquidated damages in the amount of $15 million, as provided in the Purchase and Sale Agreement; (b) in the alternative to the liquidated damages provided for in the Purchase and Sale Agreement, money damages in an amount to be determined at trial; (c) interest, attorneys’ fees and costs associated with the defense of the Purchaser’s claims and the prosecution of the Sellers’ counterclaims against the Purchaser, as provided for in the Purchase and Sale Agreement; (d) judgment declaring that the Sellers properly terminated the Purchase and Sale Agreement due to the Purchaser’s default thereunder; (e) judgment declaring that the Purchaser must authorize the escrow agent to release the $15 million deposit to the Sellers; (f) an order enjoining the Purchaser and its affiliates from engaging in further breaches of the Purchase and Sale Agreement and non-disclosure agreement, and compelling the Purchaser and its affiliates to return the Sellers’ confidential information and materials and to use best efforts to ensure the return of the Sellers’ confidential information and materials from third parties to whom the Purchaser and/or its affiliates provided such materials; and (g) such other relief as the Court deemed just and equitable. In the Answer filed by the Purchaser on September 15, 2020 and the Answer and Affirmative Defenses filed by the Purchaser and Kushner Realty Acquisition LLC on June 7, 2021, the Purchaser and Kushner Realty Acquisition LLC have generally denied the claims, counterclaims and allegations contained in the Sellers’ original and amended Answer, and asserted affirmative defenses to the Sellers’ claims and counterclaims. Each of the Sellers and the Purchaser filed motions for summary judgment (“Summary Judgment Motions”) with the Court in which the litigation is pending seeking, among other things, the dismissal of the other parties’ claims. On February 4, 2022, the Court entered an Order (the “Order”) with respect to the Summary Judgment Motions which provides as follows: (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. Index Page 13 The Sellers are evaluating the 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 the Purchaser and in the Answer and Affirmative Defenses filed by the Purchaser and Kushner Realty Acquisition LLC are without merit. Through the quarter ended January 31, 2022, the $15 million deposit has not been included in income in the accompanying condensed consolidated statement of income. Legal costs attributed to the legal proceeding between FREIT Maryland and certain of its affiliates and Sinatra Properties, LLC have been incurred in the amount of approximately $613,000 and $481,000 for the three months ended January 31, 2022 and 2021, respectively, and are included in operating expenses on the condensed consolidated statements of income. |
Maryland property dispositions
Maryland property dispositions | 3 Months Ended |
Jan. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Maryland property dispositions | Note 7 – Maryland property dispositions: On November 22, 2021, certain affiliates (the “Maryland Sellers”) of FREIT Maryland 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 Maryland 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 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. On December 30, 2021, the sale of the Rotunda Property which had a net book value of approximately $135.7 million, was consummated by Grande Rotunda and the Maryland Purchaser for a purchase price of $191,080,598. Grande Rotunda received net proceeds from the sale of approximately $35.4 million, after payment of related mortgage debt in the amount of $116.5 million, payment of loans (including interest) to each of the partners in Grande Rotunda (FREIT Maryland with a 60% interest and Rotunda 100, LLC (“Rotunda 100”) with a 40% interest) in the amount of approximately $31 million, with FREIT Maryland receiving approximately $27.7 million, and certain transactional expenses and transfer taxes including a brokerage fee due to Hekemian & Co. of approximately $4.8 million (See Note 8). In addition, the Maryland Purchaser deposited a total of $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. The net proceeds from the sale of approximately $35.4 million were distributed to the partners in Grande Rotunda with FREIT Maryland receiving approximately $21.4 million based on its 60% interest in Grande Rotunda. The sale of the Rotunda Property resulted in a net gain of approximately $51.2 million which includes approximately $8.2 million of proceeds anticipated to be released from the $14,026,401 of funds held in escrow (included in “Funds held in post-closing escrow” on the accompanying condensed consolidated balance sheet as of January 31, 2022), a write-off of the straight-line rent receivable of approximately $1.8 million and a write-off of unamortized lease commissions of approximately $1.1 million. During the first quarter ended January 31, 2022, secured loans including accrued interest held by certain members in Rotunda 100 in the amount of approximately $5.1 million were repaid to FREIT Maryland. 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 Maryland, generally, is contingent on the success and timing of future leasing activities at the Maryland Properties. On January 7, 2022, the sale of the Westridge Square Property which had a net book value of approximately $11.5 million, was consummated by WestFREIT and the Maryland Purchaser for a purchase price of $20,984,604. WestFREIT paid net cash outlays from the sale of approximately $0.7 million, after payment of related mortgage debt in the amount of approximately $21.1 million and certain transactional expenses and transfer taxes including a brokerage fee due to Hekemian & Co. of approximately $0.5 million (See Note 8). In addition, the Maryland Purchaser deposited a total of $1,015,396 of the Maryland Purchaser Escrow Payment in escrow with respect to certain leases at the Westridge Square Property, which have not been executed or where the rent commencement date has not occurred or economic obligations of WestFREIT under certain leases remain unpaid. The sale of the Westridge Square Property resulted in a net gain of approximately $8.7 million which includes approximately $0.7 million of proceeds anticipated to be released from the $1,015,396 of funds held in escrow (included in “Funds held in post-closing escrow” on the accompanying condensed consolidated balance sheet as of January 31, 2022), a write-off of the straight-line rent receivable of approximately $0.5 million and a write-off of unamortized lease commissions of approximately $0.3 million. Index Page 14 On January 10, 2022, the sale of the Damascus Property which had a net book value of approximately $24.6 million, was consummated by Damascus Centre and the Maryland Purchaser for a purchase price of $36,685,067. Damascus Centre received net proceeds from the sale of approximately $16.9 million, after payment of related mortgage debt in the amount of approximately $18.2 million and the corresponding swap breakage fees of approximately $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 million (See Note 8). In addition, the Maryland Purchaser deposited a total of $484,934 of the Maryland Purchaser Escrow Payment in escrow with respect to certain leases at the Damascus Property, which have not been executed or where the rent commencement date has not occurred or economic obligations of Damascus Centre under certain leases remain unpaid. The net proceeds from the sale of approximately $16.9 million were distributed to the partners in Damascus Centre with FREIT Maryland receiving approximately $11.8 million based on its 70% interest in Damascus Centre. The sale of the Damascus Property resulted in a net gain of approximately $10.1 million which includes approximately $0.4 million of proceeds anticipated to be released from the $484,934 of funds held in escrow (included in “Funds held in post-closing escrow” on the accompanying condensed consolidated balance sheet as of January 31, 2022), a write-off of the straight-line rent receivable of approximately $0.6 million and a write-off of unamortized lease commissions of approximately $0.3 million. In summary, the sale of the Maryland Properties having a total net book value of $171.8 million resulted in net proceeds from the sale of approximately $51.6 million, 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 a brokerage fee due to Hekemian & Co. of approximately $6.2 million. The sale of the Maryland Properties resulted in a net gain of approximately $70 million (with a consolidated impact to FREIT Maryland of approximately $46.3 million) which includes approximately $9.3 million of proceeds anticipated to be released from the $15,526,731 of funds held in escrow (included in “Funds held in post-closing escrow” on the accompanying condensed consolidated balance sheet as of January 31, 2022), 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. As the disposal of the Maryland Properties did not represent a strategic shift that would have a major impact on FREIT Maryland’s operations or financial results, the properties’ operations were not reflected as discontinued operations in the accompanying condensed consolidated financial statements. |
Management agreement, fees and
Management agreement, fees and transactions with related party | 3 Months Ended |
Jan. 31, 2022 | |
Related Party Transactions [Abstract] | |
Management agreement, fees and transactions with related party | Note 8 – Management agreement, fees and transactions with related party: Hekemian & Co. currently manages all the properties owned by FREIT Maryland and its affiliates, except for the office building at the Rotunda Property which was sold December 30, 2021 and was formerly managed by an independent third party management company. The management agreement between FREIT Maryland 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% to 5% of rents collected. Such fees charged to operations were approximately $484,000 and $513,000 for the three months ended January 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 Maryland. Such commissions and reimbursements amounted to approximately $184,000 and $129,000 for the three months ended January 31, 2022 and 2021, respectively. FREIT Maryland 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 $52,000 and $69,000 for the three months ended January 31, 2022 and 2021, respectively. From time to time, FREIT Maryland 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 Maryland. Separate fee arrangements are negotiated between Hekemian & Co. and FREIT Maryland with respect to such additional services. Such fees incurred for the three months ended January 31, 2022 and 2021 were approximately $6,294,000 and $0, respectively. Fees incurred during Fiscal 2022 related to commissions to Hekemian & Co. for the following: $4,777,000 for the sale of the Rotunda Property; $917,000 for the sale of the Damascus Property; $525,000 for the sale of the Westridge Square Property; $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 income statement for the three months ended January 31, 2022. The commission for the refinancing of the loan on the Boulders property was a deferred mortgage cost included in the unamortized debt issuance costs in the accompanying condensed consolidated balance sheet as of January 31, 2022. Robert S. Hekemian, Jr., Chief Executive Officer, President and a Director of FREIT Maryland, is the Chief Executive Officer of Hekemian & Co. David B. Hekemian, a Director of FREIT Maryland, is the President of Hekemian & Co. Allan Tubin, Chief Financial Officer and Treasurer of FREIT Maryland, is the Chief Financial Officer of Hekemian & Co. Director fee expense and/or executive compensation (including interest and dividends) incurred by FREIT Maryland for the three months ended January 31, 2022 and 2021 was approximately $135,000 and $116,000, respectively, for Robert S. Hekemian, Jr., $10,000 and $8,000, respectively, for Allan Tubin and $15,000 and $14,000, respectively, for David Hekemian (See Note 14). Such costs are included within operating expenses on the accompanying condensed consolidated statements of income. Index Page 15 The equity owners of Rotunda 100, which owns a 40% minority equity interest in Grande Rotunda, are principally employees of Hekemian & Co. To incentivize the employees of Hekemian & Co., FREIT Maryland advanced, only to employees of Hekemian & Co., up to 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 secured by the Hekemian & Co. employees’ interests in Rotunda 100 and are 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. 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 January 31, 2022, approximately $5.1 million of the secured loans receivable (including accrued interest) were repaid to FREIT Maryland. The aggregate outstanding principal balance of the Rotunda 100 notes was approximately $167,000 and $4,000,000 at January 31, 2022 and October 31, 2021, respectively. The accrued but unpaid interest related to these notes as of January 31, 2022 and October 31, 2021 amounted to approximately $54,000 and $1,292,000, respectively, and is included in secured loans receivable on the accompanying condensed consolidated balance sheets. 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 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 million. As of October 31, 2021, Rotunda 100 had funded Grande Rotunda with approximately $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 million to the equity owners in Grande Rotunda resulting in a loan repayment to Rotunda 100 of approximately $3.3 million. As of January 31, 2022, all loans were repaid in full to each of the partners. |
Mortgage financings and line of
Mortgage financings and line of credit | 3 Months Ended |
Jan. 31, 2022 | |
Debt Disclosure [Abstract] | |
Mortgage financings and line of credit | Note 9 – Mortgage financings and line of credit: On December 30, 2021, FREIT Maryland 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 inclusive of $250,000 for legal fees potentially incurred by the lender related to the lis pendens on this property resulting from the legal proceeding between FREIT Maryland and certain of its affiliates and Sinatra Properties, LLC (See Note 6). This loan is interest-only and has a maturity date of January 1, 2024 with the option of FREIT Maryland 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. FREIT Maryland’s revolving line of credit provided by the 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 Maryland’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 January 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 Maryland 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. As of January 31, 2022, this loan has a balance of approximately $22.4 million. 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 $22.4 million as of January 31, 2022. The Company is currently working with the lender to remediate this covenant default. As of the date of the filing of this quarterly report on Form 10-Q, the bank has not declared this loan to be in default. Until such time as a definitive agreement is entered into, there can be no assurance the loan covenant will be amended and the bank will not declare this loan to be in default. |
Fair value of long-term debt
Fair value of long-term debt | 3 Months Ended |
Jan. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value of long-term debt | Note 10 – Fair value of long-term debt: The following table shows the estimated fair value and net carrying value of FREIT Maryland’s long-term debt at January 31, 2022 and October 31, 2021: ($ in Millions) January 31, 2022 October 31, 2021 Fair Value $136.5 $301.6 Carrying Value, Net $136.5 $299.9 Fair values are estimated based on market interest rates at January 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). |
Segment information
Segment information | 3 Months Ended |
Jan. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment information | Note 11 – Segment information: FREIT Maryland 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 Maryland’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 Maryland's commercial segment, residential segment and corporate/other is comprised of FREIT Maryland’s Board. FREIT Maryland, 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. Index Page 17 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 three month periods ended January 31, 2022 and 2021. Asset information is not reported since FREIT Maryland does not use this measure to assess performance. Three Months Ended January 31, 2022 2021 (In Thousands of Dollars) Real estate rental revenue: Commercial $ 4,321 $ 6,351 Residential 6,338 6,609 Total real estate rental revenue 10,659 12,960 Real estate operating expenses: Commercial 2,685 2,627 Residential 2,641 2,664 Total real estate operating expenses 5,326 5,291 Net operating income: Commercial 1,636 3,724 Residential 3,697 3,945 Total net operating income $ 5,333 $ 7,669 Recurring capital improvements - residential $ (48 ) $ (82 ) Reconciliation to condensed consolidated net income attributable to common equity: Segment NOI $ 5,333 $ 7,669 Deferred rents - straight lining (10 ) (206 ) Investment income 26 30 General and administrative expenses (1,327 ) (1,260 ) Loss on investment in tenancy-in-common (124 ) (27 ) Depreciation (1,820 ) (2,295 ) Net gain on sale of Maryland properties 70,003 - Financing costs (2,928 ) (3,132 ) Net income 69,153 779 Net income attributable to noncontrolling interests in subsidiaries (23,376 ) (221 ) Net income attributable to common equity $ 45,777 $ 558 |
Income taxes
Income taxes | 3 Months Ended |
Jan. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 12 – Income taxes: FREIT Maryland has elected to be treated as a REIT for federal income tax purposes and as such intends to distribute at least 90% of its ordinary taxable income (to maintain its status as a REIT) and 100% of its capital gains to its stockholders as dividends for the fiscal year ending October 31, 2022. FREIT Maryland distributed 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 Maryland’s condensed consolidated financial statements for the three months ended January 31, 2022 and 2021. As of January 31, 2022, FREIT Maryland had no material uncertain income tax positions. The tax years subsequent to and including the fiscal year ended October 31, 2018 remain open to examination by the major taxing jurisdictions. |
Equity incentive plan
Equity incentive plan | 3 Months Ended |
Jan. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Equity incentive plan | Note 13 – Equity incentive plan: As of January 31, 2022, 442,060 shares are available for issuance under the Plan. The following table summarizes stock option activity for the three month periods ended January 31, 2022 and 2021: Three Months Ended January 31, 2022 Three Months Ended January 31, 2021 No. of Options Exercise No. of Options Exercise 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 292,540 276,340 For the three month periods ended January 31, 2022 and 2021, compensation expense related to stock options vested amounted to approximately $5,000 and $12,000, respectively. At January 31, 2022, there was approximately $25,000 of unrecognized compensation cost relating to outstanding non-vested stock options to be recognized over the remaining weighted average vesting period of approximately 1.4 years. The aggregate intrinsic value of options vested and expected to vest and options exercisable at January 31, 2022 was approximately $1,706,000 and $1,563,000, respectively. |
Deferred fee plan
Deferred fee plan | 3 Months Ended |
Jan. 31, 2022 | |
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 Maryland Deferred Fee Plan for its executive officers and directors, one of which provides for the issuance of share units payable in FREIT Maryland 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 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 Maryland 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 three month periods ended January 31, 2022 and 2021, the aggregate amounts of deferred director fees together with related interest and dividends were approximately $61,600 and $118,100, respectively, which have been paid through the issuance of 2,496 and 6,919 vested FREIT Maryland share units, respectively, based on the closing price of FREIT Maryland shares on the dates as set forth in the Deferred Fee Plan. For the three month periods ended January 31, 2022 and 2021, FREIT Maryland has charged as expense approximately $43,800 and $110,200, respectively, representing deferred director fees and interest, and the balance of approximately $17,000 and $7,900, respectively, representing dividends payable in respect of share units allocated to Plan participants, has been charged to equity. The Deferred Fee Plan, as amended, provided that cumulative fees together with accrued interest deferred as of November 1, 2014 was 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 January 31, 2022 and October 31, 2021, approximately $1,454,000 of fees has been deferred together with accrued interest of approximately $1,021,000. |
Rental Income
Rental Income | 3 Months Ended |
Jan. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Rental Income | Note 15 – Rental Income: Commercial tenants: 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. Index Page 19 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 January 31, 2022, is as follows: Year Ending October 31, Amount 2022* $ 5,782 2023 5,191 2024 4,110 2025 3,413 2026 2,666 Thereafter 3,362 Total $ 24,524 *Amount represents full fiscal year and excludes rents from the Rotunda Property, the Westridge Square Property and the Damascus Property 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 three month periods ended January 31, 2022 and 2021 were not material. Residential tenants: Lease terms for residential tenants are usually one |
COVID-19 Pandemic
COVID-19 Pandemic | 3 Months Ended |
Jan. 31, 2022 | |
Covid 19Pandemic Abstract | |
COVID-19 Pandemic | Note 16 – COVID-19 Pandemic: 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. 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 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 have been 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 is closely monitoring changes in the collectability assessment of its tenant receivables as a result of certain tenants suffering adverse financial consequences related to the COVID-19 pandemic. For the three months ended January 31, 2022 and 2021, rental revenue deemed uncollectible of approximately $0.1 million and $0.6 million (with a consolidated impact to FREIT Maryland of approximately $0.1 million and $0.4 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 Maryland 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 three months ended January 31, 2022, there were no security deposits from its commercial tenants applied to outstanding receivables due. On a case by case basis, FREIT Maryland has offered rent abatements totaling approximately $9,000 and $50,000 (with a consolidated impact to FREIT Maryland of approximately $9,000 and $31,000) for the three months ended January 31, 2022 and 2021, respectively. There were no significant deferrals of rent over a specified time period offered to its commercial tenants for the three months ended January 31, 2022 and 2021. FREIT Maryland currently remains in active discussions and negotiations with these impacted retail tenants. For the three months ended January 31, 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 January 31, 2022 of approximately $95.4 million coupled with a $13 million available line of credit (available through October 31, 2023, see Note 9) and the additional $7.5 million in funds available to be drawn upon on the Boulders loan (See Note 9 for additional details) will provide us with sufficient liquidity for at least the next twelve months from the filing of this quarterly report on Form 10-Q. 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. |
Investment in tenancy-in-comm_2
Investment in tenancy-in-common (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Balance Sheet of Pierre Property | The following table summarizes the balance sheets of the Pierre Towers property as of January 31, 2022 and October 31, 2021, accounted for by the equity method: January 31, October 31, 2022 2021 (In Thousands of Dollars) Real estate, net $ 77,508 $ 78,023 Cash and cash equivalents 1,205 1,338 Tenants' security accounts 475 484 Receivables and other assets 359 510 Total assets $ 79,547 $ 80,355 Mortgages payable, net of unamortized debt issuance costs $ 49,624 $ 49,691 Accounts payable and accrued expenses 275 261 Tenants' security deposits 475 484 Deferred revenue 93 99 Equity 29,080 29,820 Total liabilities & equity $ 79,547 $ 80,355 FREIT Maryland's investment in TIC (65% interest) $ 18,902 $ 19,383 |
Schedule of Income Statement of Pierre Property | The following table summarizes the statements of operations of the Pierre Towers property for the three months ended January 31, 2022 and 2021, accounted for by the equity method: Three Months Ended January 31, 2022 2021 (In Thousands of Dollars) Revenue $ 1,954 $ 1,891 Operating expenses 1,201 991 Depreciation 542 540 Operating income 211 360 Interest expense including amortization of deferred financing costs 401 401 Net loss $ (190 ) $ (41 ) FREIT Maryland's loss on investment in TIC (65% interest) $ (124 ) $ (27 ) |
Fair value of long-term debt (T
Fair value of long-term debt (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
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 net carrying value of FREIT Maryland’s long-term debt at January 31, 2022 and October 31, 2021: ($ in Millions) January 31, 2022 October 31, 2021 Fair Value $136.5 $301.6 Carrying Value, Net $136.5 $299.9 |
Segment information (Tables)
Segment information (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
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 three month periods ended January 31, 2022 and 2021. Asset information is not reported since FREIT Maryland does not use this measure to assess performance. Three Months Ended January 31, 2022 2021 (In Thousands of Dollars) Real estate rental revenue: Commercial $ 4,321 $ 6,351 Residential 6,338 6,609 Total real estate rental revenue 10,659 12,960 Real estate operating expenses: Commercial 2,685 2,627 Residential 2,641 2,664 Total real estate operating expenses 5,326 5,291 Net operating income: Commercial 1,636 3,724 Residential 3,697 3,945 Total net operating income $ 5,333 $ 7,669 Recurring capital improvements - residential $ (48 ) $ (82 ) Reconciliation to condensed consolidated net income attributable to common equity: Segment NOI $ 5,333 $ 7,669 Deferred rents - straight lining (10 ) (206 ) Investment income 26 30 General and administrative expenses (1,327 ) (1,260 ) Loss on investment in tenancy-in-common (124 ) (27 ) Depreciation (1,820 ) (2,295 ) Net gain on sale of Maryland properties 70,003 - Financing costs (2,928 ) (3,132 ) Net income 69,153 779 Net income attributable to noncontrolling interests in subsidiaries (23,376 ) (221 ) Net income attributable to common equity $ 45,777 $ 558 |
Equity incentive plan (Tables)
Equity incentive plan (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following table summarizes stock option activity for the three month periods ended January 31, 2022 and 2021: Three Months Ended January 31, 2022 Three Months Ended January 31, 2021 No. of Options Exercise No. of Options Exercise 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 292,540 276,340 |
Rental Income (Tables)
Rental Income (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Minimum Rental Income to be Received from Non-Cancelable Operating Leases | 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 January 31, 2022, is as follows: Year Ending October 31, Amount 2022* $ 5,782 2023 5,191 2024 4,110 2025 3,413 2026 2,666 Thereafter 3,362 Total $ 24,524 *Amount represents full fiscal year and excludes rents from the Rotunda Property, the Westridge Square Property and the Damascus Property sold on December 30, 2021, January 7, 2022 and January 10, 2022, respectively. |
Dividends and earnings per sh_2
Dividends and earnings per share (Details) - $ / shares | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Earnings per share: | ||
Dividend per share | $ 0.10 | |
Average dilutive shares outstanding | 63,000 | |
Impact of Earnings per share | $ 0.06 | |
Anti-dulutive shares excluded from the computation of diluted earnings per share | 0 | 311,000 |
Interest rate cap and swap co_2
Interest rate cap and swap contracts (Details) - USD ($) | Jan. 10, 2022 | Dec. 30, 2021 | Jan. 31, 2022 | Jan. 31, 2021 | Oct. 31, 2021 |
Derivative [Line Items] | |||||
Interest rate swap contract liability | $ 1,117,000 | $ 2,308,000 | |||
Net unrealized gain (loss) on interest rate swap contracts | 1,262,000 | $ 498,000 | |||
Wayne PSC swap [Member] | |||||
Derivative [Line Items] | |||||
Interest rate swap contract asset | 71,000 | ||||
Interest rate swap contract liability | 348,000 | ||||
Regency Swap [Member] | |||||
Derivative [Line Items] | |||||
Interest rate swap contract liability | 475,000 | 750,000 | |||
Station Place [Member] | |||||
Derivative [Line Items] | |||||
Interest rate swap contract liability | $ 642,000 | 932,000 | |||
Damascus Centre Swap [Member] | |||||
Derivative [Line Items] | |||||
Interest rate swap contract liability | 278,000 | ||||
Grande Rotunda [Member] | |||||
Derivative [Line Items] | |||||
Interest rate swap contract liability | $ 0 | ||||
Purchase and Sale Agreement of Rotunda Property [Member] | |||||
Derivative [Line Items] | |||||
Repayments of mortgage debt | $ 116,500,000 | ||||
Purchase and Sale Agreement of Damascus Property [Member] | |||||
Derivative [Line Items] | |||||
Repayments of mortgage debt | $ 18,200,000 | ||||
Swap breakage fees | $ 213,000 |
Investment in tenancy-in-comm_3
Investment in tenancy-in-common (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Feb. 28, 2020 | Jan. 31, 2022 | Jan. 31, 2021 | Oct. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | ||||
Investment in tenancy-in-common | $ 18,902,000 | $ 19,383,000 | ||
Loss on investment in tenancy-in-common | 124,000 | $ 27,000 | ||
Percentage of management fees of rent collected | 5.00% | |||
Management fees | 98,000 | 93,000 | ||
Insurance commissions | $ 0 | $ 10,000 | ||
S And A Commercial Associates Limited Partnership [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Percentage of ownership interest | 65.00% | |||
Pierre Towers, LLC [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Percentage of ownership interest | 100.00% | |||
TIC Agreement [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Percentage of ownership interest | 65.00% |
Investment in tenancy-in-comm_4
Investment in tenancy-in-common (Schedule of balance sheet of Pierre Property) (Details) - USD ($) $ in Thousands | Jan. 31, 2022 | Oct. 31, 2021 | Jan. 31, 2021 | Oct. 31, 2020 |
Schedule of Equity Method Investments [Line Items] | ||||
Real estate, net | $ 96,999 | $ 270,634 | ||
Cash and cash equivalents | 95,438 | 35,891 | $ 39,788 | |
Tenants' security accounts | 1,062 | 1,340 | ||
Receivables and other assets | 754 | 1,622 | ||
Total Assets | 227,466 | 346,105 | ||
Mortgages payable, net of unamortized debt issuance costs | 136,491 | 299,876 | ||
Accounts payable and accrued expenses | 2,804 | 2,375 | ||
Tenants' security deposits | 1,305 | 2,039 | ||
Deferred revenue | 559 | 1,143 | ||
Equity | 82,029 | 31,951 | $ 31,920 | $ 30,863 |
Total Liabilities and Equity | 227,466 | 346,105 | ||
FREIT Maryland's investment in TIC (65% interest) | 18,902 | 19,383 | ||
Pierre Property [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Real estate, net | 77,508 | 78,023 | ||
Cash and cash equivalents | 1,205 | 1,338 | ||
Tenants' security accounts | 475 | 484 | ||
Receivables and other assets | 359 | 510 | ||
Total Assets | 79,547 | 80,355 | ||
Mortgages payable, net of unamortized debt issuance costs | 49,624 | 49,691 | ||
Accounts payable and accrued expenses | 275 | 261 | ||
Tenants' security deposits | 475 | 484 | ||
Deferred revenue | 93 | 99 | ||
Equity | 29,080 | 29,820 | ||
Total Liabilities and Equity | 79,547 | 80,355 | ||
FREIT Maryland's investment in TIC (65% interest) | $ 18,902 | $ 19,383 |
Investment in tenancy-in-comm_5
Investment in tenancy-in-common (Schedule of Income Statement of Pierre Property) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Schedule of Equity Method Investments [Line Items] | ||
Revenue | $ 10,649 | $ 12,754 |
Operating expenses | 8,473 | 8,846 |
Depreciation | 1,820 | 2,295 |
Operating income | 2,176 | 3,908 |
Interest expense including amortization of deferred financing costs | 2,928 | 3,132 |
Net loss | 69,153 | 779 |
FREIT Maryland's loss on investment in TIC (65% interest) | (124) | (27) |
Pierre Property [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Revenue | 1,954 | 1,891 |
Operating expenses | 1,201 | 991 |
Depreciation | 542 | 540 |
Operating income | 211 | 360 |
Interest expense including amortization of deferred financing costs | 401 | 401 |
Net loss | (190) | (41) |
FREIT Maryland's loss on investment in TIC (65% interest) | $ (124) | $ (27) |
Termination of Purchase and S_2
Termination of Purchase and Sale Agreement (Details) - USD ($) | Feb. 04, 2022 | Jun. 17, 2020 | Jan. 31, 2022 | Jan. 31, 2021 | Jan. 14, 2020 |
Escrow deposit amount | $ 1,082,000 | $ 1,923,000 | |||
Amount of liquidated damages | $ 15,000,000 | ||||
Legal costs | $ 613,000 | $ 481,000 | |||
Subsequent Event [Member] | Summary Judgment Motions [Member] | |||||
Loss contingency damages awarded value held in escrow | $ 15,000,000 | ||||
Purchase and Sale Agreement [Member] | Six Apartment Properties [Member] | |||||
Percentage of ownership interest | 100.00% | ||||
Purchase and Sale Agreement [Member] | Six Apartment Properties [Member] | Letter of Credit [Member] | |||||
Escrow deposit amount | $ 15,000,000 |
Maryland property dispositions
Maryland property dispositions (Details) - USD ($) | Jan. 10, 2022 | Jan. 07, 2022 | Dec. 30, 2021 | Nov. 22, 2021 | Jan. 31, 2022 | Jan. 31, 2021 | Oct. 31, 2021 |
Escrow deposit amount | $ 1,082,000 | $ 1,923,000 | |||||
Repayment of secured loans receivable | 171,002,000 | $ 969,000 | |||||
FREIT Maryland [Member] | |||||||
Fixed rate mortgage loans | $ 14,400,000 | ||||||
Repayment of secured loans receivable | 5,100,000 | ||||||
Annual debt service savings | 1,173,000 | ||||||
Mortgages [Member] | FREIT Maryland [Member] | |||||||
Debt Instrument, collateral amount classified as construction in progress | 27,700,000 | ||||||
Net proceeds from refinancing of debt | 35,400,000 | ||||||
Grande Rotunda, LLC [Member] | |||||||
Principal amount on notes paid off | $ 31,000,000 | $ 700,000 | |||||
Purchase and Sale Agreement [Member] | FREIT Maryland owned 100% of its subsidiary [Member] | |||||||
Percentage of ownership interest | 100.00% | ||||||
Purchase and Sale Agreement [Member] | Grande Rotunda [Member] | |||||||
Percentage of ownership interest | 60.00% | ||||||
Purchase and Sale Agreement [Member] | Damascus Centre [Member] | |||||||
Percentage of ownership interest | 70.00% | ||||||
Purchase and Sale Agreement [Member] | FREIT Maryland [Member] | |||||||
Percentage of ownership interest | 60.00% | ||||||
Purchase and Sale Agreement [Member] | Rotunda 100 [Member] | |||||||
Percentage of ownership interest | 40.00% | ||||||
Purchase and Sale Agreement of Rotunda Property [Member] | |||||||
Purchase price | $ 191,080,598 | $ 2,723,000 | |||||
Escrow deposit amount | 14,026,401 | 15,526,731 | |||||
Debt Instrument, collateral amount | 135,700,000 | ||||||
Repayments of mortgage debt | 116,500,000 | ||||||
Proceeds from anticipated to be released from held in escrow | 8,200,000 | ||||||
Expense incurred | 4,800,000 | ||||||
Gain from sale | 51,200,000 | ||||||
Straight-line rent receivable | 1,800,000 | ||||||
Increase in expense for reserve of uncollectible rents with consolidated impact | 1,100,000 | ||||||
Purchase and Sale Agreement of Rotunda Property [Member] | Minimum [Member] | |||||||
Purchase price | 248,750,269 | ||||||
Purchase and Sale Agreement of Rotunda Property [Member] | Maximum [Member] | |||||||
Purchase price | $ 267,000,000 | ||||||
Grande Rotunda [Member] | |||||||
Fixed rate mortgage loans | $ 21,400,000 | ||||||
Membership interest percentage | 60.00% | ||||||
Purchase and Sale Agreement of Westridge Square Property [Member] | |||||||
Purchase price | $ 20,984,604 | ||||||
Debt Instrument, collateral amount | 11,500,000 | ||||||
Repayments of mortgage debt | 21,100,000 | ||||||
Expense incurred | 500,000 | ||||||
Gain from sale | 8,700,000 | ||||||
Straight-line rent receivable | 500,000 | ||||||
Increase in expense for reserve of uncollectible rents with consolidated impact | 300,000 | ||||||
Paid net cash outlays from sale | $ 700,000 | ||||||
Purchase and Sale Agreement of Damascus Property [Member] | |||||||
Purchase price | $ 36,685,067 | ||||||
Escrow deposit amount | 484,934 | ||||||
Debt Instrument, collateral amount | 24,600,000 | ||||||
Repayments of mortgage debt | 18,200,000 | ||||||
Proceeds from anticipated to be released from held in escrow | 400,000 | ||||||
Swap breakage fees | 213,000 | ||||||
Expense incurred | 900,000 | ||||||
Net proceeds from refinancing of debt | 16,900,000 | ||||||
Fixed rate mortgage loans | $ 11,800,000 | ||||||
Membership interest percentage | 70.00% | ||||||
Gain from sale | $ 10,100,000 | ||||||
Straight-line rent receivable | 600,000 | ||||||
Increase in expense for reserve of uncollectible rents with consolidated impact | 300,000 | ||||||
Purchase and Sale Agreement of Maryland Properties [Member] | |||||||
Debt Instrument, collateral amount | 171,800,000 | ||||||
Repayments of mortgage debt | 155,800,000 | ||||||
Proceeds from anticipated to be released from held in escrow | 9,300,000 | ||||||
Swap breakage fees | 213,000 | ||||||
Expense incurred | 6,200,000 | ||||||
Net proceeds from refinancing of debt | 51,600,000 | ||||||
Gain from sale | 7,000,000 | ||||||
Straight-line rent receivable | 2,900,000 | ||||||
Increase in expense for reserve of uncollectible rents with consolidated impact | $ 1,700,000 | ||||||
Purchase and Sale Agreement of Maryland Properties [Member] | Grande Rotunda [Member] | |||||||
Net proceeds from refinancing of debt | 31,000,000 | ||||||
Gain from sale | $ 46,300,000 |
Management agreement, fees an_2
Management agreement, fees and transactions with related party (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2022 | Jan. 31, 2021 | Oct. 31, 2021 | Dec. 30, 2021 | |
Related Party Transaction [Line Items] | ||||
Asset management fees | $ 497,000 | $ 526,000 | ||
Insurance commissions | 0 | 10,000 | ||
Secured loans receivable | 221,000 | $ 5,292,000 | ||
Repayment of secured loans receivable | 171,002,000 | 969,000 | ||
Rotunda 100 members [Member] | ||||
Related Party Transaction [Line Items] | ||||
Unpaid accrued interest | 54,000 | 1,292,000 | ||
Secured loans receivable | 167,000 | 4,000,000 | ||
FREIT Maryland [Member] | ||||
Related Party Transaction [Line Items] | ||||
Repayment of secured loans receivable | 5,100,000 | |||
Rotunda Property [Member] | ||||
Related Party Transaction [Line Items] | ||||
Loan commission | 4,777,000 | |||
Damascus Property [Member] | ||||
Related Party Transaction [Line Items] | ||||
Loan commission | 917,000 | |||
Westridge Square Property [Member] | ||||
Related Party Transaction [Line Items] | ||||
Loan commission | 525,000 | |||
Boulders property [Member] | ||||
Related Party Transaction [Line Items] | ||||
Loan commission | $ 75,000 | |||
Grande Rotunda, LLC [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership by noncontrolling owners (percentage) | 40.00% | |||
Principal amount on notes paid off | 700,000 | $ 31,000,000 | ||
Due to affiliate | 3,300,000 | $ 3,300,000 | ||
Repayment to affiliate | $ 2,800,000 | |||
Managing Agent Hekemian & Co [Member] | ||||
Related Party Transaction [Line Items] | ||||
Asset management fees | $ 484,000 | 513,000 | ||
Leasing commissions and reimbursement of operating expenses | 184,000 | 129,000 | ||
Insurance commissions | 52,000 | 69,000 | ||
Additional services | 6,294,000 | 0 | ||
Robert S. Hekemian, Jr. [Member] | ||||
Related Party Transaction [Line Items] | ||||
Trustee fees and related interest payable in stock units | 135,000 | 116,000 | ||
Allan Tubin [Member] | ||||
Related Party Transaction [Line Items] | ||||
Trustee fees and related interest payable in stock units | 10,000 | 8,000 | ||
David Hekemian [Member] | ||||
Related Party Transaction [Line Items] | ||||
Trustee fees and related interest payable in stock units | $ 15,000 | $ 14,000 | ||
Minimum [Member] | ||||
Related Party Transaction [Line Items] | ||||
Asset management fees percentage rate | 4.00% | |||
Maximum [Member] | ||||
Related Party Transaction [Line Items] | ||||
Asset management fees percentage rate | 5.00% |
Mortgage financings and line _2
Mortgage financings and line of credit (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Dec. 30, 2021 | Jan. 31, 2022 | Jan. 31, 2021 | |
Debt Instrument [Line Items] | |||
Available to draw | $ 60,000 | $ 65,000 | |
Legal fees | 613,000 | $ 481,000 | |
People's United Bank [Member] | |||
Debt Instrument [Line Items] | |||
Loan amount | $ 22,400,000 | ||
Line of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Maturity date of loan | Oct. 31, 2023 | ||
Line of Credit, available | $ 13,000,000 | ||
Basis points, interest rate | 3.75% | ||
FREIT Maryland [Member] | |||
Debt Instrument [Line Items] | |||
Fixed rate mortgage loans | $ 14,400,000 | ||
Maturity date of loan | Feb. 1, 2022 | ||
Loan amount, new | $ 7,500,000 | ||
Available to draw | 7,500,000 | ||
Legal fees | 250,000 | ||
Annual debt service savings | $ 1,173,000 | ||
FREIT Maryland [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Fixed interest rate on old loan | 2.85% | ||
FREIT Maryland [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Fixed interest rate on old loan | 5.37% |
Fair value of long-term debt (D
Fair value of long-term debt (Details) - USD ($) $ in Thousands | Jan. 31, 2022 | Oct. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Fair value of long-term debt | $ 136,500 | $ 301,600 |
Carrying value of long-term debt | $ 136,491 | $ 299,876 |
Segment information (Details)
Segment information (Details) $ in Thousands | 3 Months Ended | |
Jan. 31, 2022USD ($)segmentsProperties | Jan. 31, 2021USD ($) | |
Reportable Segments | ||
Real estate rental revenue | $ 10,649 | $ 12,754 |
Real estate operating expenses | 8,473 | 8,846 |
Operating income | 2,176 | 3,908 |
Reconciliation to condensed consolidated net income attributable to common equity: | ||
Segment NOI | 5,333 | 7,669 |
Deferred rents - straight lining | (10) | (206) |
Investment income | 26 | 30 |
General and administrative expenses | (1,327) | (1,260) |
Loss on investment in tenancy-in-common | (124) | (27) |
Depreciation | (1,820) | (2,295) |
Net gain on sale of Maryland properties | 70,003 | |
Financing costs | (2,928) | (3,132) |
Net income | 69,153 | 779 |
Net income attributable to noncontrolling interests in subsidiaries | (23,376) | (221) |
Net income attributable to common equity | $ 45,777 | 558 |
Number of reportable segments | segments | 2 | |
Residential [Member] | ||
Reportable Segments | ||
Recurring capital improvements | $ (48) | (82) |
Reconciliation to condensed consolidated net income attributable to common equity: | ||
Number of properties | Properties | 6 | |
Commercial [Member] | ||
Reconciliation to condensed consolidated net income attributable to common equity: | ||
Number of properties | Properties | 5 | |
Operating Segments [Member] | ||
Reportable Segments | ||
Real estate rental revenue | $ 10,659 | 12,960 |
Real estate operating expenses | 5,326 | 5,291 |
Operating income | 5,333 | 7,669 |
Operating Segments [Member] | Residential [Member] | ||
Reportable Segments | ||
Real estate rental revenue | 6,338 | 6,609 |
Real estate operating expenses | 2,641 | 2,664 |
Operating income | 3,697 | 3,945 |
Operating Segments [Member] | Commercial [Member] | ||
Reportable Segments | ||
Real estate rental revenue | 4,321 | 6,351 |
Real estate operating expenses | 2,685 | 2,627 |
Operating income | $ 1,636 | $ 3,724 |
Income taxes (Details)
Income taxes (Details) | 12 Months Ended | |
Oct. 31, 2022 | Oct. 31, 2021 | |
Ordinary taxable income distributed as dividends (percentage) | 99.00% | |
Forecast [Member] | ||
Ordinary taxable income distributed as dividends (percentage) | 90.00% | |
Capital gain from sale of property as dividends (percentage) | 100.00% |
Equity incentive plan (Narrativ
Equity incentive plan (Narrative) (Details) - USD ($) | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Compensation expense related to stock options | $ 5,000 | $ 12,000 |
Unrecognized compensation cost | $ 25,000 | |
Unrecognized compensation cost, recognition period | 1 year 4 months 24 days | |
Aggregate intrinsic value of options expected to vest | $ 1,706,000 | |
Aggregate intrinsic value of options exercisable | $ 1,563,000 | |
Equity Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for issuance | 442,060 |
Equity incentive plan (Schedule
Equity incentive plan (Schedule of Stock Option Activity) (Details) - Employee Stock Option [Member] - $ / shares | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
No. of Options Outstanding | ||
Options outstanding at beginning of period | 310,740 | 310,740 |
Options granted during period | ||
Options forfeited/cancelled during period | ||
Options outstanding at end of period | 310,740 | 310,740 |
Options vested and expected to vest | 309,450 | 308,310 |
Options exercisable at end of period | 292,540 | 276,340 |
Weighted Average Exercise Price | ||
Options outstanding beginning of period | $ 18.35 | $ 18.35 |
Options granted during period | ||
Options forfeited/cancelled during period | ||
Options outstanding end of period | $ 18.35 | $ 18.35 |
Deferred fee plan (Details)
Deferred fee plan (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | Oct. 31, 2021 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Dividends payable | $ 686,000 | $ 342,000 | $ 686,000 |
Deferred Fee Plan [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Term of distribution to participants | 10 years | ||
Basis spread on any deferred fee (percentage) | 1.50% | ||
Trustee fee expense | $ 61,600 | 118,100 | |
Deferred trustee fees | $ 43,800 | $ 110,200 | |
Shares issued | 2,496 | 6,919 | |
Dividends payable | $ 17,000 | $ 7,900 | |
Cumulative fees | 1,454,000 | 1,454,000 | |
Deferred accrued interest | $ 1,021,000 | $ 1,021,000 |
Rental Income (Narrative) (Deta
Rental Income (Narrative) (Details) | 3 Months Ended |
Jan. 31, 2022 | |
Minimum [Member] | |
Lessee, Lease, Description [Line Items] | |
Lease terms for residential tenants, periods | 1 year |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Lease terms for residential tenants, periods | 2 years |
Rental Income (Schedule of Mini
Rental Income (Schedule of Minimum Rental Income) (Details) $ in Thousands | Jan. 31, 2022USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
2022 | $ 5,782 | [1] |
2023 | 5,191 | |
2024 | 4,110 | |
2025 | 3,413 | |
2026 | 2,666 | |
Thereafter | 3,362 | |
Total | $ 24,524 | |
[1] | Amount represents full fiscal year and excludes rents from the Rotunda Property, the Westridge Square Property and the Damascus Property sold on December 30, 2021, January 7, 2022 and January 10, 2022, respectively. |
COVID-19 Pandemic (Details)
COVID-19 Pandemic (Details) - USD ($) | 3 Months Ended | ||
Jan. 31, 2022 | Jan. 31, 2021 | Oct. 31, 2021 | |
Rental revenue deemed uncollectible | $ 100,000 | $ 600,000 | |
Security deposit as accounts receivables | 1,062,000 | 1,451,000 | |
Rent abatements | 9,000 | 50,000 | |
Positive cash flow from operations | 2,895,000 | 5,161,000 | |
Cash balance | 95,400,000 | ||
Available line of credit | 13,000,000 | ||
Available to draw | 60,000 | 65,000 | |
Commercial Properties [Member] | |||
Security deposit as accounts receivables | $ 397,000 | ||
FREIT [Member] | |||
Rental revenue deemed uncollectible | 100,000 | 400,000 | |
Rent abatements | 9,000 | $ 31,000 | |
Available to draw | $ 7,500,000 |