First Real Estate Invt Tr N J Stock Price, News & Analysis
Company Description
First Real Estate Investment Trust of New Jersey, Inc. (FREIT) (over-the-counter symbol FREVS) is a real estate investment trust organized in 1961. According to company disclosures, FREIT is a publicly traded REIT whose portfolio consists of residential and commercial properties located in New Jersey and New York, with the largest concentration in northern New Jersey.
FREIT is classified in the finance and insurance sector under other financial vehicles, reflecting its structure as a real estate investment trust that owns and operates income-producing properties. The company reports results across two main property categories: residential properties and commercial properties. Its real estate revenues are described in public releases as being derived from these residential and commercial properties, and performance discussions frequently distinguish between these two segments.
Business focus and property mix
Company earnings releases describe FREIT’s activities in terms of real estate revenue, net operating income (NOI), and occupancy for its residential and commercial properties. Residential properties contribute revenue primarily through base rents, and management commentary in the releases highlights changes in residential revenue driven by increases in base rents across most properties. Commercial properties contribute revenue from shopping centers and other commercial real estate, with reported occupancy and revenue trends discussed separately from the residential segment.
The portfolio is geographically concentrated in New Jersey and New York, with a particular emphasis on northern New Jersey. Specific locations referenced in public communications include properties in communities such as Westwood, River Edge, Rockaway, Franklin Lakes, and Glen Rock in New Jersey, as well as previously owned properties in Maryland that were sold in an earlier period. These references illustrate that FREIT’s operations are centered on multi-family residential buildings and shopping center or retail-oriented commercial assets in the region.
Operating metrics and REIT performance measures
FREIT’s public financial reporting emphasizes real estate revenue, net income attributable to common equity, net operating income (NOI) by segment, and non-GAAP measures such as Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO). The company explains that FFO is defined in accordance with the National Association of Real Estate Investment Trusts (NAREIT) and that it adjusts GAAP net income for items such as depreciation, amortization of deferred leasing costs, and certain gains or losses related to property sales and tenancy-in-common investments.
Management further discloses that it uses a modified version of FFO, called Adjusted Funds From Operations (AFFO), which incorporates additional adjustments such as straight-line rent (deferred rents) and recurring capital improvements on residential apartments. FREIT states that it believes AFFO is a superior measure of its operating performance compared with FFO alone, because it is intended to better reflect recurring cash-generating capacity from its properties.
In its segment discussions, FREIT reports NOI for residential and commercial properties, and in some periods it also reports same property NOI. Same property NOI is defined by the company as NOI from properties that it has owned and operated for both the current and prior periods, excluding properties acquired, sold, or redeveloped during those periods. The company notes that certain Maryland properties sold in a prior period were excluded from same property results.
Occupancy and portfolio characteristics
FREIT’s earnings releases provide occupancy statistics for its portfolio, distinguishing between total average residential occupancy and total average commercial occupancy. Residential occupancy rates disclosed in the releases are generally in the mid-90% range, while commercial occupancy rates are lower and have been affected by specific tenant events. For example, the company has reported that the departure of a large tenant at the Westwood Plaza Shopping Center in Westwood, New Jersey affected commercial occupancy and revenue.
The company’s commentary indicates that residential properties have maintained positive cash flow and that increases in base rents across most residential properties have contributed to higher residential segment revenues and NOI, even in periods when occupancy has modestly declined. For the commercial segment, management has highlighted changes in occupancy and specific tenant movements as key drivers of revenue and NOI trends.
Capital structure, financing, and dividends
FREIT’s public communications describe a range of financing activities related to its properties, including mortgage loans, refinancings, loan extensions, and the use of a revolving line of credit. Examples include refinancing a loan secured by a residential property in Westwood, New Jersey, extending the term of a loan secured by the Westwood Plaza shopping center, repaying a loan on a residential property in Rockaway, New Jersey, and working with a lender to extend or modify a mortgage on an apartment building in River Edge, New Jersey.
The company also discloses that it maintains a revolving line of credit with a bank, secured by mortgages on certain shopping center and retail properties in New Jersey. These financing arrangements are discussed in terms of interest rates, maturity dates, and expected effects on debt service costs.
As a REIT, FREIT regularly reports on its dividend decisions. Board resolutions disclosed in earnings releases and in a Form 8-K state that the Board of Directors declares quarterly dividends on the common stock and evaluates the dividend on a quarterly basis. The company notes that the amount of any dividend is not necessarily indicative of future dividends and that there can be no assurance that dividends will be declared for any future period.
Corporate governance and stockholder rights
FREIT’s Board of Directors has publicly disclosed the adoption of a stockholder rights plan (also referred to as a Rights Plan or stockholder rights agreement). According to the company’s announcement, the Rights Plan was adopted after consultation with legal and financial advisors and is intended to protect the long-term interests of FREIT stockholders and enable them to realize the potential value of their investment. The plan has a specified duration and sets an ownership threshold at which rights become exercisable if a person or group acquires a defined percentage of FREIT common stock.
The company explains that under the Rights Plan, if a person or group becomes an acquiring person by exceeding the specified ownership threshold, other stockholders (excluding the acquiring person) would be entitled to purchase shares at a discount, and similar protections would apply if FREIT were acquired in a merger or other business combination. The Board states that the Rights Plan does not prevent it from considering offers that it believes recognize the full value of the company.
Strategic and legal context
Public statements from FREIT reference ongoing litigation between the company (and certain of its affiliates) and entities associated with Kushner companies, including Sinatra LLC. The company has indicated that this litigation relates to a previously announced definitive agreement for the sale of certain FREIT assets, and that the dispute is proceeding in the New Jersey court system. FREIT’s Board has also disclosed that it received an unsolicited, non-binding expression of interest from K Corp Acquisitions LLC, a Kushner company, to acquire FREIT, and that it would evaluate such communications consistent with its fiduciary duties.
In connection with the Rights Plan, the Board has stated that it seeks to provide adequate time to pursue a final outcome in the ongoing litigation and to consider any potential value-maximizing transactions after that outcome. Company communications emphasize that the Board will review credible proposals with the interests of all stockholders in mind.
Regulatory reporting and public company status
FREIT files reports with the U.S. Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934. Recent Form 8-K filings show that the company is incorporated in Maryland and that it has a Commission File Number associated with its registration. These filings cover topics such as the release of operating results for specific fiscal quarters and the declaration of dividends.
In its forward-looking statements disclosures, FREIT notes that its results can be affected by factors such as market and economic conditions, lease-up periods, and the ability of tenants to pay rents. The company refers investors to its most recent reports on Form 10-K and Form 10-Q for additional information about risks and factors that may influence its financial performance.
FAQs about First Real Estate Investment Trust of New Jersey (FREIT)
- What is First Real Estate Investment Trust of New Jersey, Inc. (FREIT)?
FREIT is a publicly traded real estate investment trust organized in 1961. It owns and operates a portfolio of residential and commercial properties located in New Jersey and New York, with the largest concentration in northern New Jersey. - Where does FREIT’s portfolio operate?
According to company disclosures, FREIT’s properties are located in New Jersey and New York, with a focus on northern New Jersey. Public releases reference properties in communities such as Westwood, River Edge, Rockaway, Franklin Lakes, and Glen Rock in New Jersey. - What types of properties does FREIT own?
FREIT reports its operations in terms of residential properties and commercial properties. Residential properties generate revenue primarily from base rents, while commercial properties include shopping centers and other commercial real estate that produce rental income. - How does FREIT measure its operating performance?
FREIT highlights real estate revenue, net income attributable to common equity, and net operating income (NOI) for its residential and commercial segments. It also uses non-GAAP measures such as Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) to evaluate performance, as described in its earnings releases. - What are FFO and AFFO for FREIT?
The company states that FFO is a non-GAAP measure defined by NAREIT that adjusts GAAP net income for items such as depreciation, amortization of deferred leasing costs, and certain gains or losses. FREIT then calculates Adjusted Funds From Operations (AFFO) by further adjusting FFO for items such as straight-line rents and recurring capital improvements on its residential apartments. - How important is occupancy to FREIT’s results?
FREIT regularly reports total average residential occupancy and total average commercial occupancy. Changes in occupancy, along with changes in base rents, are cited in earnings releases as key drivers of segment revenue and NOI for both residential and commercial properties. - Does FREIT pay dividends?
Yes. Company communications and SEC filings indicate that FREIT’s Board of Directors declares dividends on its common stock and evaluates the dividend on a quarterly basis. The company notes that the amount and payment of future dividends are not assured and may change over time. - What is FREIT’s stock symbol and where does it trade?
FREIT’s common stock is described as publicly traded over-the-counter under the symbol FREVS. - What is the purpose of FREIT’s stockholder rights plan?
FREIT has adopted a stockholder rights plan that, according to its announcement, is intended to protect the long-term interests of stockholders and reduce the likelihood that any person or group gains control of the company without paying an appropriate control premium. The plan establishes an ownership threshold at which rights become exercisable and provides mechanisms for stockholders (other than an acquiring person) to purchase shares at a discount if that threshold is exceeded. - How does FREIT describe the risks to its business?
In its forward-looking statements, FREIT notes that actual results may differ from expectations due to factors such as market and economic conditions, longer-than-anticipated lease-up periods, or the inability of certain tenants to pay rents. The company refers readers to its SEC filings, including its most recent Form 10-K and Form 10-Q, for additional discussion of these and other factors.