8-K
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY, INC. (FREVS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March
14, 2025
FIRST REAL ESTATE
INVESTMENT TRUST OF NEW JERSEY, INC.
(Exact name of registrant as specified in charter)
| Maryland | 000-25043 | 22-1697095 | |
|---|---|---|---|
| (State or other<br> jurisdiction of incorporation) | (Commission<br><br> File Number) | (IRS<br> Employer<br><br> Identification No.) | |
| 505 Main<br> Street, Suite 400, Hackensack, New Jersey | 07601 | ||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (201) 488-6400
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4 (c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, par value $0.01 per share | FREVS | OTC Pink Market |
| Preferred Stock Purchase Rights (1) | ||
| (1) | Registered pursuant to Section 12 (b) of the<br>Act pursuant to a form 8-A filed by the registrant on August 3, 2023. Until the Distribution Date (as defined in the registrant’s<br>Stockholder Rights Agreement dated July 31, 2023) the Preferred Stock Purchase Rights will be transferred with and only with the shares<br>of the registrant’s Common Stock to which the Preferred Stock Purchase Rights are attached. | |
| --- | --- |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
2
Item 2.02 Results of Operations and Financial Condition
OPERATING RESULTS
The registrant has released its operating results for the fiscal quarter ended January 31, 2025. The Press Release is included as Exhibit 99.1 to this Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
99.1 Registrant’s press release dated March 14, 2025
The statements in this report, which relate to future earnings or performance, are forward-looking. Actual results may differ materially and be adversely affected by such factors as market and economic conditions, longer than anticipated lease-up periods or the inability of certain tenants to pay rents. Additional information about these factors is contained in the Company’s filings with the SEC including the Company’s most recent filed reports on Form 10-K and Form 10-Q.
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FIRST REAL ESTATE INVESTMENT <br><br>TRUST OF NEW JERSEY, INC. | |
|---|---|
| (Registrant) | |
| By: | /s/ Robert S. Hekemian, Jr. |
| Robert S. Hekemian, Jr. | |
| President and Chief Executive Officer |
Date: March 14, 2025
4
EXHIBIT INDEX
| Exhibit | |
|---|---|
| Number | Description |
| 99.1 | Press Release – Operating results for the fiscal quarter ended January 31, 2025. |
5
FREIT Announces First Quarter 2025 Results
HACKENSACK, NJ, March 14, 2025 – First Real Estate Investment Trust of New Jersey, Inc. (“FREIT” or the “Company”) reported its operating results for the fiscal quarter ended January 31, 2025. The results of operations as presented in this earnings release are unaudited and are not necessarily indicative of future results.
| FINANCIAL HIGHLIGHTS & OPERATING STATISTICS | |||||
|---|---|---|---|---|---|
| For the Fiscal Quarter Ended | |||||
| January 31, | |||||
| 2025 | 2024 | ||||
| GAAP Earnings (Loss) Per Share - Basic and Diluted | $ | 0.08 | $ | (0.07 | ) |
| AFFO Per Share - Basic and Diluted | $ | 0.16 | $ | 0.04 | |
| Dividends Per Share | $ | 0.08 | $ | 0.05 | |
| Total Average Residential Occupancy | 96.8% | 95.3% | |||
| Total Average Commercial Occupancy | 48.2% | 50.1% |
Results for the Quarter
Total real estate revenue increased 3.9% to approximately $7,269,000 for the fiscal quarter ended January 31, 2025 as compared to approximately $6,999,000 for the prior year’s comparable period. This increase was primarily attributable to an increase from the residential segment driven by an increase in base rents across most properties and an increase in the average occupancy rate from 95.3% in the prior year’s comparable period to 96.8% in the current year’s period.
Net income (loss) attributable to common equity (“Net Income (Loss)”) was Net Income of approximately $614,000 or $0.08 per share basic and diluted for the fiscal quarter ended January 31, 2025 as compared to Net Loss of approximately ($512,000) or ($0.07) per share basic and diluted for the prior year’s comparable period. The change in Net Income (Loss) was primarily driven by a decline in general and administrative expenses of approximately $963,000 attributed to costs incurred in the prior year’s comparable period for work performed for the Company by a financial advisory firm and a decline in legal and professional expenses in the current year’s period.
(Refer to “Table of Revenue & Net Income (Loss) Components”)
1
Table of Revenue & Net Income (Loss) Components
| For the Fiscal Quarter Ended January 31, | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | Change | |||||||
| (In Thousands Except Per Share Amounts) | |||||||||
| Revenue: | |||||||||
| Commercial properties | $ | 1,906 | $ | 1,952 | $ | (46 | ) | ||
| Residential properties | 5,363 | 5,047 | 316 | ||||||
| Total real estate revenues | 7,269 | 6,999 | 270 | ||||||
| Operating expenses: | |||||||||
| Real estate operating expenses | 3,736 | 3,509 | 227 | ||||||
| General and administrative expenses | 845 | 1,808 | (963 | ) | |||||
| Depreciation | 723 | 725 | (2 | ) | |||||
| Total operating expenses | 5,304 | 6,042 | (738 | ) | |||||
| Financing costs | (1,873 | ) | (1,842 | ) | (31 | ) | |||
| Investment income | 400 | 407 | (7 | ) | |||||
| Income (loss) on investment in tenancy-in-common | 9 | (109 | ) | 118 | |||||
| Net loss on sale of Maryland properties | — | (79 | ) | 79 | |||||
| Net income (loss) | 501 | (666 | ) | 1,167 | |||||
| Net loss attributable to noncontrolling interests in subsidiaries | 113 | 154 | (41 | ) | |||||
| Net income (loss) attributable to common equity | $ | 614 | $ | (512 | ) | $ | 1,126 | ||
| Earnings (loss) per share: | |||||||||
| Basic and diluted | $ | 0.08 | $ | (0.07 | ) | $ | 0.15 | ||
| Weighted average shares outstanding: | |||||||||
| Basic and diluted | 7,463 | 7,450 |
Segment Property Net Operating Income(“NOI”)
NOI for the residential properties increased modestly to approximately $2,994,000 for the fiscal quarter ended January 31, 2025 from approximately $2,865,000 for the prior year’s comparable period. NOI for the commercial properties decreased to approximately $567,000 for the fiscal quarter ended January 31, 2025 from approximately $654,000 for the prior year’s comparable period.
Financing Update
On December 15, 2024, the mortgage secured by an apartment building located in Middletown, New York and the corresponding interest rate swap contract on its underlying loan came due with no settlement of the swap contract due at maturity. Effective December 15, 2024, FREIT Regency, LLC entered into a loan extension and modification agreement with the lender of this loan, Provident Bank, with a then outstanding loan balance of approximately $13.9 million. Under the terms and conditions of this loan extension and modification, the maturity date of this loan is extended for three years to December 15, 2027, the interest rate on the outstanding debt is based on a fixed interest rate of 6.05% and monthly installments of principal and interest of approximately $84,521 are required.
Effective February 1, 2025, Valley National Bank extended the loan secured by FREIT’s Westwood Plaza shopping center located in Westwood, New Jersey with a then outstanding balance of approximately $15.7 million for 90 days from a maturity date of February 1, 2025 to a maturity date of May 1, 2025 under the same terms and conditions of the existing loan agreement. Management expects this loan to be further extended, however, until such time as a definitive agreement providing for an extension of this loan is entered into, there can be no assurance this loan will be extended.
2
Dividend
The Board of Directors of FREIT declared a first quarter dividend of $0.08 per share on the common stock to holders of record of the shares at the close of business on February 28, 2025. The payment date for the dividend is March 14, 2025. The Board of Directors will continue to evaluate the dividend on a quarterly basis.
Adjusted Funds From Operations
Funds From Operations (“FFO”) is a non-GAAP measure defined by the National Association of Real Estate Investment Trusts (“NAREIT”). FREIT does not include distributions from equity/debt/capital gain sources in its computation of FFO. Although many consider FFO as the standard measurement of a REIT’s performance, FREIT modified the NAREIT computation of FFO to include other adjustments to GAAP net income, which are not considered by management to be the primary drivers of its decision making process. These adjustments to GAAP net income are straight-line rents and recurring capital improvements on FREIT’s residential apartments.
The modified FFO computation is referred to as Adjusted Funds From Operations (“AFFO”). FREIT believes that AFFO is a superior measure of its operating performance. FREIT computes FFO and AFFO as follows:
| 2024 | |||||
| Funds From Operations ("FFO") (a) | |||||
| Net income (loss) | 501 | $ | (666 | ) | |
| Depreciation of consolidated properties | 723 | 725 | |||
| Amortization of deferred leasing costs | 26 | 26 | |||
| Distributions to non-controlling interests | (360 | )(b) | (180 | ) | |
| Net loss on sale of Maryland properties | — | 79 | |||
| Adjustment to loss on investment in tenancy-in-common for depreciation | 365 | 362 | |||
| FFO | 1,255 | $ | 346 | ||
| Per Share - Basic and Diluted | 0.17 | $ | 0.05 | ||
| (a) As prescribed by NAREIT. | |||||
| (b) FFO excludes the additional distribution of proceeds to non-controlling interests in the amount of approximately 0.1 million related to the sale of the Rotunda property located in Maryland in a prior year. | |||||
| Adjusted Funds From Operations ("AFFO") | |||||
| FFO | 1,255 | $ | 346 | ||
| Deferred rents (Straight lining) | 28 | 29 | |||
| Capital Improvements - Apartments | (77 | ) | (96 | ) | |
| AFFO | 1,206 | $ | 279 | ||
| Per Share - Basic and Diluted | 0.16 | $ | 0.04 | ||
| Weighted Average Shares Outstanding: | |||||
| Basic and Diluted | 7,463 | 7,450 |
All values are in US Dollars.
3
FFO and AFFO do not represent cash generated from operating activities in accordance with accounting principles generally accepted in the United States of America, and therefore should not be considered a substitute for net income as a measure of results of operations or for cash flow from operations as a measure of liquidity. Additionally, the application and calculation of FFO and AFFO by certain other REITs may vary materially from that of FREIT, and therefore FREIT’s FFO and AFFO may not be directly comparable to those of other REITs.
The statements in this report, which relateto future earnings or performance, are forward-looking. Actual results may differ materially and be adversely affected by such factorsas market and economic conditions, longer than anticipated lease-up periods or the inability of certain tenants to pay rents. Additionalinformation about these factors is contained in the Company’s filings with the SEC including the Company’s most recent filedreports on Form 10-K and Form 10-Q.
First Real Estate Investment Trust ofNew Jersey, Inc. is a publicly traded (over-the-counter – symbol FREVS) REIT organized in 1961.Its portfolio of residential and commercial properties are located in New Jersey and New York, with the largest concentration in northernNew Jersey.
For additional information, contact Investor Relations at (201) 488-6400
Visit us on the web: www.freitnj.com
4