Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Apr. 30, 2018 | Jun. 08, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY | |
Entity Central Index Key | 36,840 | |
Document Type | 10-Q | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Document Period End Date | Apr. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 6,755,875 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Apr. 30, 2018 | Oct. 31, 2017 |
ASSETS | ||
Real estate, at cost, net of accumulated depreciation | $ 348,548 | $ 331,965 |
Construction in progress | 135 | 129 |
Cash and cash equivalents | 18,902 | 7,899 |
Tenants' security accounts | 2,161 | 2,007 |
Receivables arising from straight-lining of rents | 3,532 | 3,359 |
Accounts receivable, net of allowance for doubtful accounts of $288 and $175 as of April 30, 2018 and October 31, 2017, respectively | 2,365 | 1,767 |
Secured loans receivable | 5,451 | 5,451 |
Prepaid expenses and other assets | 7,486 | 9,135 |
Qualified intermediary deposit - 1031 exchange | 6,965 | |
Deferred charges, net | 2,740 | 2,680 |
Interest rate cap and swap contracts | 3,807 | 1,600 |
Total Assets | 395,127 | 372,957 |
Liabilities: | ||
Mortgages payable | 352,623 | 323,435 |
Less unamortized debt issuance costs | 4,067 | 1,863 |
Mortgages payable, net | 348,556 | 321,572 |
Due to affiliate | 5,284 | 5,172 |
Deferred trustee compensation payable | 8,457 | 9,078 |
Accounts payable and accrued expenses | 2,886 | 3,870 |
Dividends payable | 337 | |
Tenants' security deposits | 3,118 | 2,960 |
Deferred revenue | 1,068 | 1,276 |
Interest rate swap contract | 439 | |
Total Liabilities | 369,706 | 344,367 |
Common equity: | ||
Shares of beneficial interest without par value: 8,000,000 shares authorized; 6,993,152 shares issued plus 134,404 and 122,092 vested share units granted to trustees at April 30, 2018 and October 31, 2017, respectively | 27,850 | 27,651 |
Treasury stock, at cost: 237,277 and 253,083 shares at April 30, 2018 and October 31, 2017, respectively | (4,977) | (5,273) |
Dividends in excess of net income | (4,410) | (4,824) |
Accumulated other comprehensive income | 2,047 | 284 |
Total Common Equity | 20,510 | 17,838 |
Noncontrolling interests in subsidiaries | 4,911 | 10,752 |
Total Equity | 25,421 | 28,590 |
Total Liabilities and Equity | $ 395,127 | $ 372,957 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Apr. 30, 2018 | Oct. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 288 | $ 175 |
Shares of benefical interest, no par value | ||
Shares of benefical interest, authorized | 8,000,000 | 8,000,000 |
Shares of benefical interest, issued | 6,993,152 | 6,993,152 |
Vested share units to trustees, issued | 134,404 | 122,092 |
Treasury stock at cost, shares | 237,277 | 253,083 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |
Revenue: | ||||
Rental income | $ 12,781 | $ 11,157 | $ 25,171 | $ 22,018 |
Reimbursements | 1,411 | 1,407 | 2,987 | 2,773 |
Sundry income | 133 | 100 | 361 | 472 |
Total revenue | 14,325 | 12,664 | 28,519 | 25,263 |
Expenses: | ||||
Operating expenses | 4,208 | 3,947 | 8,350 | 7,915 |
Lease termination fee | 620 | 620 | ||
Management fees | 649 | 593 | 1,260 | 1,156 |
Real estate taxes | 897 | 2,746 | 3,450 | 4,808 |
Depreciation | 2,801 | 2,648 | 5,512 | 5,178 |
Total expenses | 8,555 | 10,554 | 18,572 | 19,677 |
Operating income | 5,770 | 2,110 | 9,947 | 5,586 |
Investment income | 57 | 45 | 112 | 91 |
Unrealized gain on interest rate cap contract | 19 | 19 | ||
Interest expense including amortization of deferred financing costs | (4,419) | (3,856) | (9,571) | (7,722) |
Net income (loss) | 1,427 | (1,701) | 507 | (2,045) |
Net (income) loss attributable to noncontrolling interests in subsidiaries | (312) | 1,002 | 251 | 1,409 |
Net income (loss) attributable to common equity | $ 1,115 | $ (699) | $ 758 | $ (636) |
Earnings (loss) per share - basic and diluted | $ 0.16 | $ (0.10) | $ 0.11 | $ (0.09) |
Weighted average shares outstanding: | ||||
Basic and diluted | 6,876 | 6,828 | 6,869 | 6,823 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 1,427 | $ (1,701) | $ 507 | $ (2,045) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on interest rate swap contracts before reclassifications | 866 | (386) | 2,413 | 2,275 |
Amount reclassified from accumulated other comprehensive income to interest expense | 41 | 146 | 125 | 331 |
Net unrealized gain (loss) on interest rate swap contracts | 907 | (240) | 2,538 | 2,606 |
Comprehensive income (loss) | 2,334 | (1,941) | 3,045 | 561 |
Net (income) loss attributable to noncontrolling interests | (312) | 1,002 | 251 | 1,409 |
Other comprehensive income (loss): | ||||
Unrealized (gain) loss on interest rate swap contracts attributable to noncontrolling interests | (242) | 113 | (775) | (879) |
Comprehensive income (loss) attributable to noncontrolling interests | (554) | 1,115 | (524) | 530 |
Comprehensive income (loss) attributable to common equity | $ 1,780 | $ (826) | $ 2,521 | $ 1,091 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Unaudited) - 6 months ended Apr. 30, 2018 - USD ($) $ in Thousands | Shares of Beneficial Interest [Member] | Treasury Shares at Cost [Member] | Dividends in Excess of Net Income [Member] | Accumulated Other Comprehensive Income [Member] | Total Common Equity [Member] | Noncontrolling Interests [Member] | Total | |
Balance at Oct. 31, 2017 | $ 27,651 | $ (5,273) | $ (4,824) | $ 284 | $ 17,838 | $ 10,752 | $ 28,590 | |
Stock based compensation expense | 61 | 61 | 61 | |||||
Vested share units granted to trustees and consultant | 434 | 434 | 434 | |||||
Vested share units issued to retired trustee | [1] | (296) | 296 | |||||
Distributions to noncontrolling interests | (6,365) | (6,365) | ||||||
Net income (loss) | 758 | 758 | (251) | 507 | ||||
Dividends declared, including $7 payable in share units ($0.05 per share) | (344) | (344) | (344) | |||||
Net unrealized gain on interest rate swaps | 1,763 | 1,763 | 775 | 2,538 | ||||
Balance at Apr. 30, 2018 | $ 27,850 | $ (4,977) | $ (4,410) | $ 2,047 | $ 20,510 | $ 4,911 | $ 25,421 | |
[1] | Represents the issuance of treasury shares to retired trustee for share units earned. |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Unaudited) (Parenthetical) $ in Thousands | 6 Months Ended |
Apr. 30, 2018USD ($)$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Stock dividends payable | $ | $ 7 |
Dividends declared, per share | $ / shares | $ 0.05 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Operating activities: | ||
Net income (loss) | $ 507 | $ (2,045) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 5,512 | 5,178 |
Amortization | 766 | 761 |
Unrealized gain on interest rate cap contract | (19) | |
Stock based compensation expense | 61 | 61 |
Trustee fees, consultant fee and related interest paid in stock units | 427 | 410 |
Deferred rents - straight line rent | (173) | (311) |
Bad debt expense | 170 | 93 |
Changes in operating assets and liabilities: | ||
Tenants' security accounts | 4 | 86 |
Accounts receivable, prepaid expenses and other assets | (899) | (429) |
Accounts payable, accrued expenses and deferred trustee compensation | (1,165) | (216) |
Deferred revenue | (208) | (27) |
Net cash provided by operating activities | 4,983 | 3,561 |
Investing activities: | ||
Capital improvements - existing properties | (3,186) | (8,308) |
Acquisition of Station Place, net of proceeds released from escrow related to 1031 exchange | (12,577) | |
Net cash used in investing activities | (15,763) | (8,308) |
Financing activities: | ||
Repayment of mortgages and construction loan | (146,561) | (24,026) |
Proceeds from mortgage loan refinancings | 166,520 | 23,500 |
Proceeds from acquisition mortgage loan | 12,350 | |
Refinancing good faith deposit refund | 960 | |
Restricted loan proceeds held in escrow | (250) | |
Proceeds from construction loan | 1,349 | |
Proceeds from credit line | 3,000 | |
Repayment of credit line | (3,121) | |
Advanced funding for construction loan reserve | 647 | (693) |
Interest rate cap contract cost | (89) | |
Deferred financing costs | (2,670) | (339) |
Dividends paid | (3,033) | |
Due to affiliate | 112 | 2,806 |
Distributions to noncontrolling interests | (6,365) | (270) |
Net cash provided by financing activities | 21,783 | 2,044 |
Net increase (decrease) in cash and cash equivalents | 11,003 | (2,703) |
Cash and cash equivalents, beginning of period | 7,899 | 10,906 |
Cash and cash equivalents, end of period | 18,902 | 8,203 |
Supplemental disclosure of cash flow data: | ||
Interest paid, net of amounts capitalized | 8,770 | 6,979 |
Investing activities: | ||
Accrued capital expenditures, construction costs, pre-development costs and interest | 285 | 274 |
Financing activities: | ||
Dividends declared but not paid | 337 | |
Dividends paid in share units | $ 7 | $ 13 |
Basis of presentation
Basis of presentation | 6 Months Ended |
Apr. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Note 1 - Basis of presentation: The accompanying interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and pursuant to the rules of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnotes required by GAAP for complete financial statements have been omitted. It is the opinion of management that all adjustments considered necessary for a fair presentation have been included, and that all such adjustments are of a normal recurring nature. The consolidated results of operations for the six and three-month periods ended April 30, 2018 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, 2017 of First Real Estate Investment Trust of New Jersey (“FREIT”). |
Recently issued accounting stan
Recently issued accounting standards | 6 Months Ended |
Apr. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently issued accounting standards | Note 2 –Recently issued accounting standards: In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, “ Revenue from Contracts with Customers In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842) Leases (Topic 840) In November 2016, the FASB issued ASU No. 2016-18, “ Statement of Cash Flows (Topic 230): Restricted Cash In January 2017, the FASB issued ASU 2017-01, “ Business Combinations: Clarifying the Definition of a Business In August 2017, the FASB issued ASU 2017-12, “ Targeted Improvements to Accounting for Hedging Activities to ASC Topic 815, Derivatives and Hedging ("ASC 815") |
Earnings (loss) per share
Earnings (loss) per share | 6 Months Ended |
Apr. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per share | Note 3 - Earnings (loss) per share: Basic earnings per share is calculated by dividing net income attributable to common equity (numerator) by the weighted average number of shares and vested share units (See Note 13 to FREIT’s condensed consolidated financials) outstanding during each period (denominator). The calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator is increased to include the number of additional shares that would have been outstanding if all potentially dilutive shares, such as those issuable upon the exercise of stock options, were issued during the period using the Treasury Stock method. Under the Treasury Stock method, the assumption is that the proceeds received upon exercise of the options, including the unrecognized stock option compensation expense attributable to future services, are used to repurchase FREIT’s stock at the average market price during the period, thereby reducing the number of shares to be added in computing diluted earnings per share. For the six and three months ended April 30, 2018 and 2017, the outstanding stock options were anti-dilutive with no impact on earnings (loss) per share. |
Interest rate cap and swap cont
Interest rate cap and swap contracts | 6 Months Ended |
Apr. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest rate cap and swap contracts | Note 4 - Interest rate cap and swap contracts: On February 7, 2018, Grande Rotunda, LLC, a consolidated subsidiary, refinanced its $115.3 million construction loan held by Wells Fargo with a new loan held by Aareal Capital Corporation in the amount of approximately $118.5 million with additional funding available for retail tenant improvements and leasing costs in the amount of $3,380,000. This loan bears a floating interest rate at 285 basis points over the one-month LIBOR rate and has a maturity date of February 6, 2021. At April 30, 2018, the total amount outstanding on this loan was approximately $118.5 million. As part of this transaction, Grande Rotunda, LLC purchased an interest rate cap on LIBOR for the full amount that can be drawn on this loan of $121.9 million, capping the one-month LIBOR rate at 3% for the first two years of this loan. At April 30, 2018, the derivative financial instrument has a notional amount of $121.9 million and a maturity date of March 5, 2020. On December 7, 2017, Station Place on Monmouth, LLC (owned 100% by FREIT) closed on a $12,350,000 mortgage loan with Provident Bank. The loan bears a floating interest rate equal to 180 basis points over the one-month BBA LIBOR with a maturity date of December 15, 2027. At April 30, 2018, the total amount outstanding on this loan was $12,350,000. In order to minimize interest rate volatility during the term of this loan, Station Place on Monmouth, LLC entered into an interest rate swap agreement that, in effect, converted the floating interest rate to a fixed interest rate of 4.35% over the term of the loan. At April 30, 2018, the derivative financial instrument has a notional amount of $12,350,000 and a maturity date of December 2027. On September 29, 2016, Wayne PSC, LLC, a consolidated subsidiary, refinanced its $24.2 million mortgage loan held by Metropolitan Life Insurance Company, with a new mortgage loan from People’s United Bank in the amount of $25.8 million. The new loan bears a floating interest rate equal to 220 basis points over the one-month BBA LIBOR with a maturity date of October 1, 2026. At April 30, 2018, the total amount outstanding on this loan was approximately $24.8 million. In order to minimize interest rate volatility during the term of the loan, Wayne PSC, LLC entered into an interest rate swap agreement that, in effect, converted the floating interest rate to a fixed interest rate of 3.625% over the term of the loan. At April 30, 2018, the derivative financial instrument has a notional amount of approximately $24.8 million and a maturity date of October 2026. On December 26, 2012, Damascus Centre, LLC refinanced its construction loan with long-term financing provided by People’s United Bank and the first tranche of the new loan was taken down in the amount of $20 million. Based on leasing and net operating income at the shopping center, People’s United Bank agreed to a take-down of the second tranche of this loan on April 22, 2016 in the amount of $2,320,000. The total amount outstanding for both tranches of this loan held with People’s United Bank as of April 30, 2018 was approximately $20.1 million. The loan has a maturity date of January 3, 2023 and bears a floating interest rate equal to 210 basis points over the one-month BBA LIBOR. In order to minimize interest rate volatility during the term of this loan, Damascus Centre, LLC entered into an interest rate swap agreement that, in effect, converted the floating interest rate to a fixed interest rate on each tranche of this loan, resulting in a fixed rate of 3.81% over the term of the first tranche of this loan and a fixed rate of 3.53% over the term of the second tranche of this loan. At April 30, 2018, the derivative financial instrument has a notional amount of approximately $20.2 million and a maturity date of January 2023. On December 29, 2014, FREIT Regency, LLC closed on a $16.2 million mortgage loan with Provident Bank. The loan bears a floating interest rate equal to 125 basis points over the one-month BBA LIBOR and the loan will mature on December 15, 2024. At April 30, 2018, the total amount outstanding on this loan was approximately $16.1 million. In order to minimize interest rate volatility during the term of the loan, FREIT Regency, LLC entered into an interest rate swap agreement that, in effect, converted the floating interest rate to a fixed interest rate of 3.75% over the term of the loan. At April 30, 2018, the derivative financial instrument has a notional amount of approximately $16.1 million and a maturity date of December 2024. In accordance with ASC 815, “ Accounting for Derivative Instruments and Hedging Activities The Grande Rotunda, LLC interest rate cap is accounted for as an ineffective cash flow hedge with a corresponding gain or loss being recorded in FREIT’s income statement. For the six and three months ended April 30, 2018, FREIT recorded an unrealized gain in the condensed consolidated statement of income of approximately $19,000 for the Grande Rotunda, LLC interest rate cap representing the change in the fair value of this ineffective cash flow hedge during such period with a corresponding asset of approximately $107,000 as of April 30, 2018. The fair values are based on observable inputs (level 2 in the fair value hierarchy as provided by authoritative guidance). |
Property sale
Property sale | 6 Months Ended |
Apr. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Property sales | Note 5 – Property sale: On June 12, 2017, FREIT sold its Hammel Gardens property, a residential property located in Maywood, New Jersey, for a sale price of $17 million. The sale of this property, which had a carrying value of approximately $0.7 million, resulted in a capital gain of approximately $15.4 million net of sales fees and commissions. As a result of this sale, FREIT incurred a loan prepayment cost of approximately $1.1 million and paid off the related mortgage on the Hammel Gardens property in the amount of approximately $8 million from the proceeds of the sale. FREIT structured this sale in a manner that qualified it as a like-kind exchange of real estate pursuant to Section 1031 of the Internal Revenue Code. The 1031 Exchange transaction resulted in a deferral for income tax purposes of the $15.4 million capital gain. The net proceeds from this sale, which were approximately $7 million, were held in escrow until a replacement property was purchased. A replacement property to complete this like-kind exchange was acquired on December 7, 2017, and the sale proceeds held in escrow were applied to the purchase price of such property (See Note 6 to FREIT’s condensed consolidated financials for further details). As the disposal of the Hammel Gardens property did not represent a strategic shift that would have a major impact on FREIT’s operations or financial results, the property’s operations were not reflected as discontinued operations in the accompanying condensed consolidated financial statements. |
Property acquisition
Property acquisition | 6 Months Ended |
Apr. 30, 2018 | |
Real Estate [Abstract] | |
Property acquisition | Note 6 – Property acquisition: On December 7, 2017, FREIT completed the acquisition of Station Place, a residential apartment complex consisting of one building with 45 units, located in Red Bank, New Jersey through Station Place on Monmouth, LLC (FREIT’s 100% owned consolidated subsidiary). FREIT identified Station Place as the replacement property for the Hammel Gardens property located in Maywood, New Jersey that FREIT sold on June 12, 2017, which completed the like-kind exchange pursuant to Section 1031 of the Internal Revenue Code (See Note 5 to FREIT’s condensed consolidated financial statements). Station Place is part of FREIT’s residential segment. The acquisition cost was $19,542,000 (inclusive of approximately $542,000 of transaction costs capitalized as part of the asset acquisition), which was funded in part with $7 million in net proceeds from the sale of the Hammel Gardens property, and the remaining balance of $12,350,000 (inclusive of the transaction costs) was funded by Station Place on Monmouth, LLC through long-term financing for this property from Provident Bank. The acquisition cost of $19.5 million has been allocated as follows: $10.7 million to the building and $8.8 million to the land. |
Management agreement, fees and
Management agreement, fees and transactions with related party | 6 Months Ended |
Apr. 30, 2018 | |
Related Party Transactions [Abstract] | |
Management agreement, fees and transactions with related party | Note 7 - Management agreement, fees and transactions with related party: Hekemian & Co., Inc. (“Hekemian”) currently manages all the properties owned by FREIT and its affiliates, except for the office building at The Rotunda located in Baltimore, Maryland, which is managed by an independent third party management company. The management agreement with Hekemian, effective November 1, 2001, requires the payment of management fees equal to 4% to 5% of rents collected. Such fees, charged to operations, were approximately $1,194,000 and $1,074,000 for the six months ended April 30, 2018 and 2017, respectively, and $619,000 and $553,000 for the three months ended April 30, 2018 and 2017, respectively. In addition, the management agreement provides for the payment to Hekemian of leasing commissions, as well as the reimbursement of operating expenses incurred on behalf of FREIT. Such commissions and reimbursements amounted to approximately $270,000 and $397,000 for the six-month periods ended April 30, 2018 and 2017, respectively, and $130,000 and $198,000 for the three-month periods ended April 30, 2018 and 2017, respectively. The management agreement expires on October 31, 2019, and is automatically renewed for successive periods of two years unless either party gives not less than six (6) months prior notice of non-renewal. FREIT also uses the resources of the Hekemian insurance department to secure various insurance coverages for its properties and subsidiaries. Hekemian is paid a commission for these services. Such commissions were charged to operations and amounted to approximately $49,000 and $55,000 for the six months ended April 30, 2018 and 2017, respectively, and $17,000 and $33,000 for the three months ended April 30, 2018 and 2017, respectively. From time to time, FREIT engages Hekemian to provide certain additional services, such as consulting services related to development, property sales and financing activities of FREIT. Separate fee arrangements are negotiated between Hekemian and FREIT with respect to such additional services. Such fees incurred during the six months ended April 30, 2018 and 2017 were approximately $1,195,000 and $0, respectively, and $432,500 and $0 for the three months ended April 30, 2018 and 2017, respectively. Fees incurred during Fiscal 2018 related to commissions to Hekemian for the following: $522,500 for the purchase of the Station Place property; $400,000 for the refinancing of the Grande Rotunda, LLC loan; $240,000 for the refinancing of the Pierre Towers, LLC loan; $32,500 for the renewal of FREIT’s line of credit. In Fiscal 2007, FREIT’s Board of Trustees approved and FREIT executed a development fee agreement for the Rotunda redevelopment project for the development services to be provided by Hekemian Development Resources, LLC (“Resources”), a wholly-owned subsidiary of Hekemian. As part of this agreement, the Board approved the payment of a fee to Resources in the amount of $1.4 million in connection with the revision to the scope of the Rotunda redevelopment project. Grande Rotunda, LLC paid $500,000 of this fee to Resources in Fiscal 2013 and the balance of $900,000 became due upon the issuance of a certificate of occupancy for the multi-family portion of this project. A final certificate of occupancy was issued in Fiscal 2016; however Resources agreed to defer the payment of the $900,000 balance of this fee (the $900,000 was included in accounts payable on FREIT’s condensed consolidated balance sheet at October 31, 2017). Grande Rotunda, LLC paid the $900,000 portion of this fee to Resources in February 2018 in connection with the refinancing of the Wells Fargo construction loan for the Rotunda property with a new construction loan from Aareal Capital Corporation. Additionally, Grande Rotunda, LLC paid Resources the amount of approximately $45,000 representing a mutually agreed upon amount of interest on the $900,000 portion of the fee for the period during which Hekemian Resources had agreed to defer payment thereof. Robert S. Hekemian, the Chairman of the Board and Chief Executive Officer of Hekemian, is the former Chairman and Chief Executive Officer of FREIT. Mr. Hekemian retired as Chairman and Chief Executive Officer of FREIT effective upon the conclusion of FREIT’s 2018 Annual Meeting of Shareholders held on April 5, 2018 (the “2018 Annual Meeting”). Robert S. Hekemian, Jr., the President of Hekemian, is a Trustee of FREIT, and succeeded Robert S. Hekemian as Chief Executive Office of FREIT effective upon the conclusion of the 2018 Annual Meeting. David Hekemian, a Principal of Hekemian, was elected as a Trustee of FREIT at the 2018 Annual Meeting. Trustee fee expense (including interest) incurred by FREIT for the six months ended April 30, 2018 and 2017 was approximately $255,000 and $273,000, respectively, for Robert S. Hekemian, $41,000 and $34,000, respectively, for Robert S. Hekemian, Jr. and $2,000 and $0, respectively, for David Hekemian and for the three months ended April 30, 2018 and 2017 was approximately $119,000 and $135,000, respectively, for Robert S. Hekemian, $27,000 and $17,000, respectively, for Robert S. Hekemian, Jr. and $2,000 and $0, respectively, for David Hekemian (See Note 13 to FREIT’s condensed consolidated financial statements). Pursuant to the terms of a Consulting Agreement between Robert S. Hekemian and the Trust, Mr. Hekemian will continue to serve the Trust in a consulting capacity effective upon conclusion of FREIT’s 2018 Annual Meeting. The Consulting Agreement has a term of four years, and obliges Mr. Hekemian to provide advice and consultation with respect to matters pertaining to FREIT and its subsidiaries, affiliates, assets and business for no fewer than 30 hours per month during the term of the agreement. FREIT will pay Mr. Hekemian a consulting fee of $5,000 per month during the term of the Consulting Agreement, which shall be payable in the form of Shares on a quarterly basis (i.e. in quarterly installments of $15,000). The number of Shares to be issued for each quarterly installment of the consulting fee will be determined by dividing the dollar amount of the consulting fee by the closing price of one Share on the OTC Pink Open Market as of the close of trading on the last trading day of the calendar quarter with respect to which such consulting fee is payable. For the six and three months ended April 30, 2018, consulting fee expense for Robert S. Hekemian was approximately $4,200. Rotunda 100, LLC owns a 40% minority equity interest in Grande Rotunda, LLC and FREIT owns a 60% equity interest in Grande Rotunda, LLC. Damascus 100, LLC owns a 30% minority equity interest in Damascus Centre, LLC and FREIT owns a 70% equity interest in Damascus Centre, LLC. The equity owners of Rotunda 100, LLC and Damascus 100, LLC are principally employees of Hekemian. To incentivize the employees of Hekemian, FREIT advanced, only to employees of Hekemian, up to 50% of the amount of the equity contributions that the Hekemian employees were required to invest in Rotunda 100, LLC and Damascus 100, LLC. These advances, which amounted to $5,451,000 at both April 30, 2018 and October 31, 2017, were in the form of secured loans that bear interest 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 employees’ interests in Rotunda 100 and Damascus 100, and are full recourse loans. The notes originally had maturity dates at the earlier of (a) ten (10) years after issue (Grande Rotunda, LLC – 6/19/2015, Damascus Centre, LLC – 9/30/2016), or, (b) at the election of FREIT, ninety (90) days after the borrower terminates employment with Hekemian, at which time all outstanding unpaid principal is due. On June 4, 2015, the Board approved an extension of the maturity date of the secured loans to occur the earlier of (a) June 19, 2018 or (b) five days after the closing of a permanent mortgage loan secured by the Rotunda property. On December 7, 2017, the Board approved a further extension of the maturity dates of these loans to the date or dates upon which distributions of cash are made by Grande Rotunda, LLC to its members as a result of a refinancing or sale of Grande Rotunda, LLC or the Rotunda property. In Fiscal 2017, Grande Rotunda, LLC 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 previously held with Wells Fargo was at its maximum level resulting in no additional funding available to draw. Accordingly, the equity owners in Grande Rotunda, LLC contributed their respective pro-rata share of any cash needs through loans to Grande Rotunda, LLC. As of April 30, 2018 and October 31, 2017, Rotunda 100, LLC has funded Grande Rotunda, LLC with approximately $5.3 million and $5.2 million, respectively, which is included in “Due to affiliate” on the accompanying condensed consolidated balance sheets. |
Mortgage financings
Mortgage financings | 6 Months Ended |
Apr. 30, 2018 | |
Debt Disclosure [Abstract] | |
Mortgage financings | Note 8 – Mortgage financings: The loan on the Patchogue, New York property in the amount of approximately $5.2 million became due on March 1, 2018. FREIT is currently working with the lender, Oritani Bank, to extend the loan while the lender completes its underwriting process. Until such time as a definitive agreement providing for an extension of the loan is entered into, there can be no assurance the loan will be extended. The original Rotunda acquisition loan for $22.5 million, which was subsequently reduced to $19.5 million on February 1, 2010, was acquired by FREIT on May 28, 2013. FREIT subsequently sold this loan to Wells Fargo Bank. On December 9, 2013, Grande Rotunda, LLC, a consolidated subsidiary, closed with Wells Fargo Bank on a construction loan of up to $120 million to be used to redevelop and expand the Rotunda property in Baltimore, Maryland with a term of four (4) years, with one twelve-month extension, at a rate of 225 basis points over the monthly LIBOR. On November 23, 2016, the following terms and conditions of this loan were modified: (i) the total amount that could have been drawn on this loan was decreased from $120 million to $116.1 million, allowing for an additional draw of $2.1 million over the then existing balance of approximately $114 million to be used for retail tenant improvements and leasing commissions; (ii) leasing benchmarks were no longer required to be met including the waiver of the leasing benchmarks FREIT was not in compliance with as of June 30, 2016; (iii) Grande Rotunda, LLC provided an interest reserve to Wells Fargo Bank in the amount of $2 million for the purpose of funding interest payments, and was obliged to replenish the account balance to $1 million if it should fall below $500,000; (iv) the maturity date of the loan was changed from December 31, 2017 to October 31, 2017 with no option to extend; and (v) the interest rate on the amount outstanding on the loan was increased by 25 basis points to 250 basis points over the monthly LIBOR. The following terms and conditions of this loan were modified and effective as of October 31, 2017: (i) the maturity date of the loan was extended 120 days from October 31, 2017 to February 28, 2018; (ii) the interest rate on the amount outstanding on the loan was increased by 35 basis points to 285 basis points over the monthly LIBOR through December 31, 2017; and (iii) the interest rate on the amount outstanding on the loan was increased by 65 basis points to 315 basis points over the monthly LIBOR from January 1, 2018 through February 28, 2018. On February 7, 2018, Grande Rotunda, LLC refinanced its $115.3 million construction loan held by Wells Fargo with a new loan held by Aareal Capital Corporation in the amount of approximately $118.5 million with additional funding available for retail tenant improvements and leasing costs in the amount of $3,380,000. This refinancing paid off the loan previously held by Wells Fargo, funded loan closing costs and paid the amount due to Hekemian Development Resources for a development fee of $900,000 plus accrued interest of approximately $45,000 (See Note 7 to FREIT’s condensed consolidated financial statements for further details on this fee). This loan, secured by the Rotunda property, bears a floating interest rate at 285 basis points over the one-month LIBOR rate and has a maturity date of February 6, 2021 with two one-year renewal options. As part of this transaction, Grande Rotunda, LLC purchased an interest rate cap on LIBOR for the full amount that can be drawn on this loan of $121.9 million, capping the one-month LIBOR rate at 3% for the first two years of this loan. As of April 30, 2018, approximately $118.5 million of this loan was drawn down and the interest rate was approximately 4.73%. On January 8, 2018, Pierre Towers, LLC (“Pierre”), owned by S And A Commercial Associates Limited Partnership (“S&A”), which is a consolidated subsidiary, refinanced its $29.1 million loan held by State Farm with a new mortgage loan from New York Life Insurance in the amount of $48 million. Pierre paid New York Life Insurance a good faith deposit in the amount of $960,000 (which was included in prepaid expenses and other assets on the accompanying condensed consolidated balance sheet as of October 31, 2017) and was reimbursed by New York Life when the loan was closed in January 2018. The new loan has a term of ten years and bears a fixed interest rate equal to 3.88%. Interest-only payments are required each month for the first five years of the term and thereafter, principal payments plus accrued interest will be required each month through maturity. This refinancing resulted in: (i) a reduction in the annual interest rate from a fixed rate of 5.38% to a fixed rate of 3.88%; and (ii) net refinancing proceeds of approximately $17.2 million (after giving effect to a $1.2 million loan prepayment cost to pay-off the loan held by State Farm) that were distributed to the partners in S&A with FREIT receiving approximately $11.2 million, based on its 65% membership interest in S&A which can be used for capital expenditures and general corporate purposes. On December 7, 2017, Station Place on Monmouth, LLC (owned 100% by FREIT) closed on a mortgage loan in the amount of $12,350,000 held by Provident Bank to purchase the Station Place property in Red Bank, New Jersey (see Note 6 to FREIT’s condensed consolidated financial statements). Interest-only payments are required each month for the first two years of the term and thereafter, principal payments plus accrued interest will be required each month through maturity. The loan bears a floating interest rate equal to 180 basis points over the one-month BBA LIBOR with a maturity date of December 15, 2027. In order to minimize interest rate volatility during the term of the loan, Station Place on Monmouth, LLC entered into an interest rate swap agreement that, in effect, converted the floating interest rate to a fixed interest rate of 4.35% over the term of the loan. On October 27, 2017, FREIT’s revolving line of credit provided by the Provident Bank was renewed for a three-year term ending on October 27, 2020 at which point no further advances shall be permitted and provided the line of credit is not renewed by the lender, the outstanding principal balance of the line of credit shall convert to a commercial term loan maturing on October 31, 2022. Draws against the credit line can be used for working capital needs and standby letters of credit. Draws against the credit line are secured by mortgages on FREIT’s Franklin Crossing Shopping Center in Franklin Lakes, New Jersey and retail space in Glen Rock, New Jersey. The total line of credit was increased from $12.8 million to $13 million and the interest rate on the amount outstanding will be at a floating rate of 275 basis points over the 30-day LIBOR with a floor of 3.75%. During Fiscal 2017, FREIT utilized $3 million of its credit line to fund tenant improvements for new retail tenants at the Rotunda property. As of October 31, 2017, approximately $3.1 million was outstanding (including closing costs of approximately $0.1 million related to the renewal of the line). In February 2018, FREIT repaid the line of credit in the amount of $3.1 million. As of April 30, 2018, there was no amount outstanding and $13 million was available under the line of credit. On April 28, 2017, WestFREIT Corp., a consolidated subsidiary, refinanced its $22 million mortgage loan held by Wells Fargo Bank, with a new mortgage loan from Manufacturer’s and Traders Trust Company in the amount of $23.5 million. The new loan bears a floating interest rate equal to 275 basis points over the one-month LIBOR and has a maturity date of April 28, 2019 with the option to extend for 12 months. This refinancing resulted in: (i) a reduction in the annual interest rate from a fixed rate of 5.55% to a variable rate and (ii) net refinancing proceeds of approximately $1.1 million which have been used for general corporate purposes. |
Fair value of long-term debt
Fair value of long-term debt | 6 Months Ended |
Apr. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value of long-term debt | Note 9 – Fair value of long-term debt: The following table shows the estimated fair value and carrying value of FREIT’s long-term debt at April 30, 2018 and October 31, 2017: ($ in Millions) April 30, 2018 October 31, 2017 Fair Value $341.7 $317.8 Carrying Value $348.6 $321.6 Fair values are estimated based on market interest rates at April 30, 2018 and October 31, 2017 and on discounted cash flow analysis. Changes in assumptions or estimation methods may significantly affect these fair value estimates. The fair value is based on observable inputs (level 2 in the fair value hierarchy as provided by authoritative guidance). |
Segment information
Segment information | 6 Months Ended |
Apr. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment information | Note 10 - Segment information: FREIT has determined that it has two reportable segments: commercial properties and residential properties. These reportable segments offer different types of space, have different types of tenants, and are managed separately because each requires different operating strategies and management expertise. The commercial segment is comprised of nine (9) properties and the residential segment is comprised of eight (8) properties inclusive of the property acquired in Fiscal 2018 (Station Place). The accounting policies of the segments are the same as those described in Note 1 in FREIT’s Annual Report on Form 10-K for the fiscal year ended October 31, 2017. The chief operating and decision-making group of FREIT's commercial segment, residential segment and corporate/other is comprised of FREIT’s Board of Trustees (“Board”). FREIT assesses and measures segment operating results based on net operating income ("NOI"). NOI, a standard used by real estate professionals, is based on operating revenue and expenses directly associated with the operations of the real estate properties, but excludes: deferred rents (straight lining), depreciation, financing costs and other items. NOI is not a measure of operating results or cash flows from operating activities as measured by GAAP, and is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity. Real estate rental revenue, operating expenses, NOI and recurring capital improvements for the reportable segments are summarized below and reconciled to condensed consolidated net income (loss) attributable to common equity for the six and three-month periods ended April 30, 2018 and 2017. Asset information is not reported since FREIT does not use this measure to assess performance. Six Months Ended Three Months Ended April 30, April 30, 2018 2017 2018 2017 (In Thousands of Dollars) (In Thousands of Dollars) Real estate rental revenue: Commercial $ 12,566 $ 12,070 $ 6,263 $ 5,996 Residential 15,780 12,882 7,987 6,495 Total real estate rental revenue 28,346 24,952 14,250 12,491 Real estate operating expenses: Commercial 6,001 5,835 2,964 2,950 Residential 5,867 6,887 2,151 3,703 Total real estate operating expenses 11,868 12,722 5,115 6,653 Net operating income: Commercial 6,565 6,235 3,299 3,046 Residential 9,913 5,995 5,836 2,792 Total net operating income $ 16,478 $ 12,230 $ 9,135 $ 5,838 Recurring capital improvements - residential $ (238 ) $ (379 ) $ (127 ) $ (179 ) Reconciliation to condensed consolidated net income (loss) attributable to common equity: Segment NOI $ 16,478 $ 12,230 $ 9,135 $ 5,838 Deferred rents - straight lining 173 311 75 173 Lease termination fee — (620 ) — (620 ) Investment income 112 91 57 45 Unrealized gain on interest rate cap contract 19 — 19 — General and administrative expenses (1,192 ) (1,157 ) (639 ) (633 ) Depreciation (5,512 ) (5,178 ) (2,801 ) (2,648 ) Financing costs (9,571 ) (7,722 ) (4,419 ) (3,856 ) Net income (loss) 507 (2,045 ) 1,427 (1,701 ) Net (income) loss attributable to noncontrolling interests in subsidiaries 251 1,409 (312 ) 1,002 Net income (loss) attributable to common equity $ 758 $ (636 ) $ 1,115 $ (699 ) |
Income taxes
Income taxes | 6 Months Ended |
Apr. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 11 – Income taxes: FREIT intends to distribute 100% of its ordinary taxable income to its shareholders as dividends for the fiscal year ending October 31, 2018. Accordingly, no provision for federal or state income taxes related to such ordinary taxable income was recorded in FREIT’s condensed consolidated financial statements. There was no ordinary taxable income for the fiscal year ended October 31, 2017 for FREIT to distribute to its shareholders. As described in Notes 5 and 6 to FREIT’s condensed consolidated financial statements, FREIT completed a like-kind exchange with respect to the sale of the Maywood, New Jersey property, which was sold on June 12, 2017 resulting in a capital gain of approximately $15.4 million. The tax basis of Station Place in Red Bank, New Jersey, which was the replacement property in the like-kind exchange, is approximately $18.8 million lower than the acquisition cost of approximately $19.5 million recorded for financial reporting purposes. Accordingly, no provision for federal or state income taxes related to such gain was recorded in FREIT’s condensed consolidated financial statements. As of April 30, 2018, FREIT had no material uncertain income tax positions. The tax years subsequent to and including the fiscal year ended October 31, 2015 remain open to examination by the major taxing jurisdictions to which FREIT is subject. |
Stock option plan
Stock option plan | 6 Months Ended |
Apr. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock option plan | Note 12 – Stock option plan: On September 4, 2014, the Board approved the grant of a total of 246,000 non-qualified share options under FREIT’s Equity Incentive Plan to certain FREIT Executive Officers, the members of the Board and certain employees of Hekemian, FREIT’s managing agent. The options have an exercise price of $18.45 per share, will vest in equal annual installments over a 5-year period and will expire 10 years from the date of grant, which will be September 3, 2024. On November 10, 2016, the Board approved the grant of a total of 38,000 non-qualified share options under the Equity Incentive Plan to two members of the Board who were appointed to the Board during Fiscal 2016. The options have an exercise price of $21.00 per share, will vest in equal annual installments over a 5-year period, and will expire 10 years from the date of grant, which will be November 9, 2026. On April 5, 2018, FREIT shareholders approved an amendment to FREIT’s Equity Incentive Plan reserving an additional 300,000 shares for issuance under the Plan. As of April 30, 2018, 485,020 shares are available for issuance under the Plan after giving effect to the amendment. The following table summarizes stock option activity for the six-month period ended April 30, 2018: No. of Options Weighted Average Outstanding Exercise Price Options outstanding beginning of period 267,780 $ 18.81 Options granted during period — — Options forfeited/cancelled during period — — Options outstanding end of period 267,780 $ 18.81 Options vested and expected to vest 262,280 Options exercisable at end of period 147,940 The estimated fair value of options granted during Fiscal 2017 was $3.54 per option. Such value was estimated on the grant date using a binomial lattice option pricing model using the following assumptions: · Expected volatility – 30.30% · Risk-free interest rate – 2.23% · Imputed option life – 6.3 years · Expected dividend yield – 4.66% The expected volatility over the options’ expected life was based on the historical volatility of the weekly closing price of the Company’s stock over a five (5) year period. The risk-free interest rate was based on the annual yield on the grant date of a zero-coupon U.S. Treasury Bond the maturity of which equals the option’s expected life. The imputed option life was based on the simplified expected term calculation permitted by the SEC, which defines the expected life as the average of the contractual term of the options and the weighted-average vesting period for all option tranches. The expected dividend yield was based on the Company’s historical dividend yield, exclusive of capital gain dividends. For the six-month periods ended April 30, 2018 and 2017, compensation expense related to stock options granted amounted to approximately $61,000 and $61,000, respectively. For the three-month periods ended April 30, 2018 and 2017, compensation expense related to stock options granted amounted to approximately $30,000 and $30,000, respectively. At April 30, 2018, there was approximately $218,000 of unrecognized compensation cost relating to outstanding non-vested stock options to be recognized over the remaining weighted average vesting period of approximately 1.9 years. There was no aggregate intrinsic value of options vested and expected to vest and options exercisable at April 30, 2018 as the exercise price of the options was greater than the market or average share price. |
Deferred fee plan
Deferred fee plan | 6 Months Ended |
Apr. 30, 2018 | |
Deferred Compensation Arrangements [Abstract] | |
Deferred fee plan | Note 13 – Deferred fee plan: On September 4, 2014, the Board approved amendments, effective November 1, 2014, to the FREIT Deferred Fee Plan for its Executive Officers and Trustees, one of which provides for the issuance of share units payable in FREIT shares in respect of (i) deferred amounts of all Trustee fees on a prospective basis; (ii) interest on Trustee fees deferred prior to November 1, 2014 (payable at a floating rate, adjusted quarterly, based on the average 10-year Treasury Bond interest rate plus 150 basis points); and (iii) dividends payable in respect of share units allocated to participants in the Deferred Fee Plan as a result of deferrals described above. The number of share units credited to a participant’s account will be determined by the closing price of FREIT shares on the date as set forth in the Deferred Fee Plan. All fees payable to Trustees for the six and three-month periods ended April 30, 2018 were deferred under the Deferred Fee Plan except for fees payable to three Trustees, who elected to receive such fees in cash. All fees payable to Trustees for the six and three-month periods ended April 30, 2017 were deferred under the Deferred Fee Plan except for fees payable to one Trustee, who elected to receive such fees in cash. As a result of the amendment to the Deferred Fee Plan described above, for the six-month periods ended April 30, 2018 and 2017, the aggregate amounts of deferred Trustee fees together with related interest and dividends were approximately $430,000 and $423,200, respectively, which have been paid through the issuance of 28,118 and 21,037 vested FREIT share units, respectively, based on the closing price of FREIT shares on the dates as set forth in the Deferred Fee Plan. For the six-month periods ended April 30, 2018 and 2017, FREIT has charged as expense approximately $423,300 and $410,200, respectively, representing deferred Trustee fees and interest, and the balance of approximately $6,700 and $13,000, respectively, representing dividends payable in respect of share units allocated to Plan participants, has been charged to equity. |
Anchor tenant termination and m
Anchor tenant termination and modification of lease | 6 Months Ended |
Apr. 30, 2018 | |
Lease Termination Fee Disclosure [Abstract] | |
Anchor tenant termination and modification of lease | Note 14 – Anchor tenant termination and modification of lease: FREIT owns and operates an 87,661 square foot shopping center located in Franklin Lakes, New Jersey, the anchor tenant of which is The Stop & Shop Supermarket Company, LLC (“Stop & Shop”). On July 26, 2017, Stop & Shop entered into a lease modification with FREIT whereby the tenant exercised its option to renew the lease for a ten year period with a right of the tenant to terminate the lease at any time during the fifth year if the store does not meet certain sales volume levels set forth in the modification. This lease modification, which provided for a $250,000 reduction in annual rent, has adversely affected and will adversely affect FREIT’s future operating results. On January 4, 2017, Macy’s, Inc. announced its intention to close several of its department stores across the United States, including the approximately 81,160 square foot Macy’s anchor store located at the Preakness Shopping Center in Wayne, New Jersey. Wayne PSC, LLC (“Wayne PSC”), a 40% owned consolidated affiliate of FREIT, owns and operates this shopping center in which Macy’s operated its store under a long-term lease and was paying annual rent of approximately $234,000 ($2.88 per square foot) with no future rent escalations for the remaining term and option periods of the lease. On April 25, 2017, Wayne PSC announced it had agreed to a termination of Macy’s lease effective as of April 15, 2017. To terminate the lease and take possession of the space, Wayne PSC paid Macy’s a termination fee of $620,000, which was fully expensed in the second quarter of Fiscal 2017. Wayne PSC expects to re-position this space and re-lease it to a new tenant (or multiple tenants) at market rents, which are currently higher than the rent provided for under the terminated Macy’s lease. FREIT will lose total consolidated rental income, including reimbursements, of approximately $0.2 million until such time as the space is fully re-leased. FREIT anticipates increased revenue from the space when it is fully re-leased. |
Subsequent event
Subsequent event | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent event | Note 15 – Subsequent event: On May 3, 2018, the Board approved the grant of a total of 38,000 non-qualified share options under the Equity Incentive Plan to two members of the Board who were appointed to the Board during Fiscal 2018. The options have an exercise price of $15.50 per share, will vest in equal annual installments over a 5-year period, and will expire 10 years from the date of grant, which will be May 2, 2028. |
Fair value of long-term debt (T
Fair value of long-term debt (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of estimated fair value and carrying value of long-term debt | The following table shows the estimated fair value and carrying value of FREIT’s long-term debt at April 30, 2018 and October 31, 2017: ($ in Millions) April 30, 2018 October 31, 2017 Fair Value $341.7 $317.8 Carrying Value $348.6 $321.6 |
Segment information (Tables)
Segment information (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
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 (loss) attributable to common equity for the six and three-month periods ended April 30, 2018 and 2017. Asset information is not reported since FREIT does not use this measure to assess performance. Six Months Ended Three Months Ended April 30, April 30, 2018 2017 2018 2017 (In Thousands of Dollars) (In Thousands of Dollars) Real estate rental revenue: Commercial $ 12,566 $ 12,070 $ 6,263 $ 5,996 Residential 15,780 12,882 7,987 6,495 Total real estate rental revenue 28,346 24,952 14,250 12,491 Real estate operating expenses: Commercial 6,001 5,835 2,964 2,950 Residential 5,867 6,887 2,151 3,703 Total real estate operating expenses 11,868 12,722 5,115 6,653 Net operating income: Commercial 6,565 6,235 3,299 3,046 Residential 9,913 5,995 5,836 2,792 Total net operating income $ 16,478 $ 12,230 $ 9,135 $ 5,838 Recurring capital improvements - residential $ (238 ) $ (379 ) $ (127 ) $ (179 ) Reconciliation to condensed consolidated net income (loss) attributable to common equity: Segment NOI $ 16,478 $ 12,230 $ 9,135 $ 5,838 Deferred rents - straight lining 173 311 75 173 Lease termination fee — (620 ) — (620 ) Investment income 112 91 57 45 Unrealized gain on interest rate cap contract 19 — 19 — General and administrative expenses (1,192 ) (1,157 ) (639 ) (633 ) Depreciation (5,512 ) (5,178 ) (2,801 ) (2,648 ) Financing costs (9,571 ) (7,722 ) (4,419 ) (3,856 ) Net income (loss) 507 (2,045 ) 1,427 (1,701 ) Net (income) loss attributable to noncontrolling interests in subsidiaries 251 1,409 (312 ) 1,002 Net income (loss) attributable to common equity $ 758 $ (636 ) $ 1,115 $ (699 ) |
Stock option plan (Tables)
Stock option plan (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | The following table summarizes stock option activity for the six-month period ended April 30, 2018: No. of Options Weighted Average Outstanding Exercise Price Options outstanding beginning of period 267,780 $ 18.81 Options granted during period — — Options forfeited/cancelled during period — — Options outstanding end of period 267,780 $ 18.81 Options vested and expected to vest 262,280 Options exercisable at end of period 147,940 |
Recently issued accounting st27
Recently issued accounting standards (Details) | Apr. 30, 2018USD ($) |
Transaction costs | $ 19,500,000 |
Station Place on Monmouth, LLC [Member] | |
Transaction costs | $ 542,000 |
Interest rate cap and swap co28
Interest rate cap and swap contracts (Details) - USD ($) | Feb. 07, 2018 | Dec. 07, 2017 | Sep. 29, 2016 | Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | Oct. 31, 2017 | Apr. 22, 2016 | Dec. 26, 2012 |
Derivative [Line Items] | ||||||||||
Mortgages and construction loan payable | $ 352,623,000 | $ 352,623,000 | $ 323,435,000 | |||||||
Interest rate swap contract assets | 3,807,000 | 3,807,000 | 1,600,000 | |||||||
Unrealized gain (loss) on derivatives | 19,000 | 19,000 | ||||||||
Net unrealized gain (loss) on interest rate swap contracts | 907,000 | $ (240,000) | 2,538,000 | $ 2,606,000 | ||||||
Interest rate swap contract liabilities | 439,000 | |||||||||
Damascus Centre Swap [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Interest rate swap contract assets | 883,000 | 883,000 | ||||||||
Unrealized gain (loss) on derivatives | 2,952,000 | |||||||||
Wayne PSC swap [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Interest rate swap contract assets | 2,313,000 | 2,313,000 | ||||||||
Regency Swap [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Interest rate swap contract assets | 238,000 | 238,000 | ||||||||
Monmouth swap [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Interest rate swap contract assets | 266,000 | 266,000 | ||||||||
Wells Fargo Bank [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Refinanced loan amount | $ 115,300,000 | |||||||||
Loan amount | 118,500,000 | |||||||||
Leasing costs | $ 3,380,000 | |||||||||
Basis points, interest rate | 2.85% | |||||||||
Maturity date of loan | Feb. 6, 2021 | |||||||||
Grande Rotunda LLC [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Loan amount | 118,500,000 | 118,500,000 | ||||||||
Unrealized gain (loss) on derivatives | 19,000 | 19,000 | ||||||||
Increase (Decrease) in Derivative Assets and Liabilities | 107,000 | |||||||||
Grande Rotunda LLC Construction Loan [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Loan amount | 121,900,000 | 121,900,000 | ||||||||
Notional amount of interest rate swap | $ 121,900,000 | $ 121,900,000 | ||||||||
Fixed interest rate | 3.00% | 3.00% | ||||||||
Maturity date of loan | Mar. 5, 2020 | |||||||||
Provident Bank [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Loan amount | $ 12,350,000 | $ 16,200,000 | $ 16,200,000 | |||||||
Notional amount of interest rate swap | $ 12,350,000 | $ 16,100,000 | $ 16,100,000 | |||||||
Fixed interest rate | 4.35% | 3.75% | 3.75% | |||||||
Basis points, interest rate | 1.80% | 2.75% | 1.25% | |||||||
Maturity date of loan | Dec. 15, 2027 | Dec. 15, 2024 | ||||||||
Wayne PSC, LLC Loan [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Refinanced loan amount | $ 24,200,000 | |||||||||
Loan amount | $ 24,800,000 | $ 24,800,000 | ||||||||
Description of loan amendment terms | In order to minimize interest rate volatility during the term of the loan, Wayne PSC, LLC entered into an interest rate swap agreement that, in effect, converted the floating interest rate to a fixed interest rate of 3.625% over the term of the loan. | |||||||||
Notional amount of interest rate swap | 24,800,000 | 24,800,000 | ||||||||
Fixed interest rate | 3.625% | |||||||||
Basis points, interest rate | 2.20% | |||||||||
People's United Bank [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Loan amount | $ 25,800,000 | 20,100,000 | 20,100,000 | |||||||
Mortgages and construction loan payable | $ 2,320,000 | |||||||||
Notional amount of interest rate swap | $ 20,200,000 | $ 20,200,000 | ||||||||
People's United Bank [Member] | Tranche One [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Loan amount | $ 20,000,000 | |||||||||
Fixed interest rate | 3.81% | 3.81% | ||||||||
Basis points, interest rate | 2.10% | |||||||||
Maturity date of loan | Jan. 3, 2023 | |||||||||
People's United Bank [Member] | Tranche Two [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Fixed interest rate | 3.53% | 3.53% | ||||||||
Damascus Centre [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Interest rate swap contract assets | 275,000 | |||||||||
Wayne PSC swap [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Interest rate swap contract assets | 1,325,000 | |||||||||
Regency Swap [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Interest rate swap contract liabilities | $ 439,000 | |||||||||
Station Place on Monmouth, LLC [Member] | ||||||||||
Derivative [Line Items] | ||||||||||
Percentage of acquisition | 100.00% |
Property sale (Details)
Property sale (Details) - USD ($) | Jun. 12, 2017 | Oct. 31, 2017 |
Real Estate Properties [Line Items] | ||
Deferral of capital gain on sale of property from qualification as like-kind exchange of real estate pursuant to Section 1031 of the Internal Revenue Code | $ 15,400,000 | |
Hammel Gardens Property [Member] | ||
Real Estate Properties [Line Items] | ||
Rental properties | $ 700,000 | |
Agreed sales price of property held for sale | 17,000,000 | |
Gain on sale of property held for sale | 15,400,000 | |
Mortgage prepayment penalty | 1,100,000 | |
Net proceeds from sale of property | 8,000,000 | |
Net proceeds from sale of property to be held in escrow until replacement property is purchased | 7,000,000 | |
Deferral of capital gain on sale of property from qualification as like-kind exchange of real estate pursuant to Section 1031 of the Internal Revenue Code | $ 15,400,000 |
Property acquisition (Details)
Property acquisition (Details) - USD ($) | Dec. 07, 2017 | Apr. 30, 2018 |
Real Estate [Line Items] | ||
Transaction costs | $ 19,500,000 | |
Building [Member] | ||
Real Estate [Line Items] | ||
Transaction costs | 10,700,000 | |
Land [Member] | ||
Real Estate [Line Items] | ||
Transaction costs | 8,800,000 | |
Provident Bank [Member] | ||
Real Estate [Line Items] | ||
Remaining balance (inclusive of the transaction costs) | 12,350,000 | |
Station Place on Monmouth, LLC [Member] | ||
Real Estate [Line Items] | ||
Percentage of acquisition | 100.00% | |
Regency acquisition costs | $ 19,542,000 | |
Transaction costs | 542,000 | |
Hammel Gardens Property [Member] | ||
Real Estate [Line Items] | ||
Net proceed from sales | $ 7,000,000 |
Management agreement, fees an31
Management agreement, fees and transactions with related party (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Feb. 28, 2018 | Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | Oct. 30, 2013 | Oct. 31, 2017 | Nov. 30, 2016 | |
Related Party Transaction [Line Items] | ||||||||
Asset management fees | $ 649,000 | $ 593,000 | $ 1,260,000 | $ 1,156,000 | ||||
Consulting services expense | 4,200 | 4,200 | ||||||
Trustee fees and related interest payable in stock units | 434,000 | |||||||
Secured loans receivable | $ 5,451,000 | $ 5,451,000 | $ 5,451,000 | $ 5,451,000 | ||||
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% | |||||||
Grande Rotunda, LLC [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Ownership by noncontrolling owners (percentage) | 40.00% | 40.00% | ||||||
Ownership by parent (percentage) | 60.00% | 60.00% | ||||||
Due to affiliate | $ 5,300,000 | $ 5,300,000 | 5,200,000 | |||||
Damascus Centre, LLC [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Ownership by noncontrolling owners (percentage) | 30.00% | 30.00% | ||||||
Ownership by parent (percentage) | 70.00% | 70.00% | ||||||
Managing Agent Hekemian & Co [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Asset management fees | $ 619,000 | 553,000 | $ 1,194,000 | 1,074,000 | ||||
Leasing commissions and reimbursement of operating expenses | 130,000 | 198,000 | 270,000 | 397,000 | ||||
Leasing commissions | 522,500 | |||||||
Insurance commissions | 17,000 | 33,000 | 49,000 | 55,000 | ||||
Redevelopment fees | 432,500 | 0 | 1,195,000 | 0 | ||||
Consulting services expense | 240,000 | |||||||
Grande Rotunda LLC Construction Loan [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Consulting services expense | 400,000 | |||||||
Provident Bank [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Consulting services expense | 32,500 | |||||||
Grande Rotunda LLC [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Fee amount | $ 900,000 | 45,000 | 1,400,000 | $ 500,000 | ||||
Affiliated Entity 1 [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Development fees included in accounts payable | 900,000 | 900,000 | $ 900,000 | |||||
Hekemian and Resources [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Fee amount | 900,000 | |||||||
Robert S. Hekemian [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Trustee fees and related interest payable in stock units | 119,000 | 135,000 | 255,000 | 273,000 | ||||
Consulting fee per month | 5,000 | |||||||
Consulting fee quarterly installments | 15,000 | |||||||
Robert S. Hekemian, Jr. [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Trustee fees and related interest payable in stock units | 27,000 | 17,000 | 41,000 | 34,000 | ||||
David Hekemian [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Trustee fees and related interest payable in stock units | $ 2,000 | $ 0 | $ 2,000 | $ 0 |
Mortgage financings (Details)
Mortgage financings (Details) - USD ($) | Feb. 07, 2018 | Dec. 07, 2017 | Feb. 28, 2018 | Apr. 28, 2017 | Nov. 23, 2016 | Apr. 30, 2018 | Apr. 30, 2018 | Apr. 30, 2017 | Oct. 31, 2017 | Oct. 30, 2013 | Mar. 01, 2018 | Jan. 08, 2018 | Sep. 29, 2016 | Jun. 30, 2016 | Apr. 22, 2016 | Feb. 01, 2010 |
Debt Instrument [Line Items] | ||||||||||||||||
Total loan carrying amount | $ 352,623,000 | $ 352,623,000 | $ 323,435,000 | |||||||||||||
Proceeds from credit line | $ 3,000,000 | |||||||||||||||
Grande Rotunda LLC [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Fee amount | $ 900,000 | 45,000 | 1,400,000 | $ 500,000 | ||||||||||||
Station Place on Monmouth, LLC [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Percentage of acquisition | 100.00% | |||||||||||||||
People's United Bank [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Loan amount | 20,100,000 | 20,100,000 | $ 25,800,000 | |||||||||||||
Total loan carrying amount | $ 2,320,000 | |||||||||||||||
Grande Rotunda LLC Construction Loan [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Loan amount | $ 121,900,000 | $ 121,900,000 | ||||||||||||||
Fixed interest rate | 3.00% | 3.00% | ||||||||||||||
Maturity date of loan | Mar. 5, 2020 | |||||||||||||||
Rotunda [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Loan amount | $ 118,500,000 | $ 118,500,000 | ||||||||||||||
Fixed interest rate | 4.73% | 4.73% | ||||||||||||||
Provident Bank [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Loan amount | $ 12,350,000 | $ 16,200,000 | $ 16,200,000 | |||||||||||||
Fixed interest rate | 4.35% | |||||||||||||||
Basis points, interest rate | 1.80% | 2.75% | 1.25% | |||||||||||||
Debt Instrument, Collateral Amount | 3,100,000 | |||||||||||||||
Maturity date of loan | Dec. 15, 2027 | Dec. 15, 2024 | ||||||||||||||
Tanant improvements | 3,000,000 | |||||||||||||||
Line of credit, current borrowing capacity | $ 12,800,000 | $ 12,800,000 | ||||||||||||||
Line of credit | $ 3,100,000 | |||||||||||||||
Line of credit, maximum borrowing capacity | $ 13,000,000 | $ 13,000,000 | ||||||||||||||
Line of credit, renewal | $ 100,000 | |||||||||||||||
Patchogue NY [Member] | Mortgages [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Fixed rate mortgage loans | $ 29,100,000 | |||||||||||||||
Fixed interest rate | 5.38% | 5.38% | ||||||||||||||
Debt Instrument, Collateral Amount | $ 5,200,000 | |||||||||||||||
Patchogue NY [Member] | Mortgages [Member] | Pierre Towers, LLC [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Loan amount | $ 48,000,000 | $ 48,000,000 | ||||||||||||||
Fixed interest rate | 3.88% | 3.88% | ||||||||||||||
Total loan carrying amount | $ 960,000 | $ 960,000 | ||||||||||||||
Term of the loan | 10 years | |||||||||||||||
Net proceeds from refinancing of debt | $ 17,200,000 | |||||||||||||||
Mortgage prepayment penalty | 1,200,000 | |||||||||||||||
Baltimore, MD [Member] | Notes Payable, Other Payables [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Loan amount | $ 22,500,000 | |||||||||||||||
Debt Instrument, Collateral Amount | $ 19,500,000 | |||||||||||||||
Total loan carrying amount | $ 2,100,000 | |||||||||||||||
Baltimore, MD [Member] | Notes Payable, Other Payables [Member] | Minimum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Total loan carrying amount | 116,100,000 | 116,100,000 | ||||||||||||||
Baltimore, MD [Member] | Notes Payable, Other Payables [Member] | Maximum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Total loan carrying amount | $ 120,000,000 | $ 120,000,000 | ||||||||||||||
Baltimore, MD [Member] | People's United Bank [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Basis points, interest rate | 2.25% | |||||||||||||||
Term of the loan | 4 years | |||||||||||||||
Description of loan amendment terms | On November 23, 2016, the following terms and conditions of this loan were modified: (i) the total amount that could have been drawn on this loan was decreased from $120 million to $116.1 million, allowing for an additional draw of $2.1 million over the then existing balance of approximately $114 million to be used for retail tenant improvements and leasing commissions; (ii) leasing benchmarks were no longer required to be met including the waiver of the leasing benchmarks FREIT was not in compliance with as of June 30, 2016; (iii) Grande Rotunda, LLC provided an interest reserve to Wells Fargo Bank in the amount of $2 million for the purpose of funding interest payments, and was obliged to replenish the account balance to $1 million if it should fall below $500,000; (iv) the maturity date of the loan was changed from December 31, 2017 to October 31, 2017 with no option to extend; and (v) the interest rate on the amount outstanding on the loan was increased by 25 basis points to 250 basis points over the monthly LIBOR. | |||||||||||||||
Grande Rotunda LLC [Member] | Mortgages [Member] | Minimum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Replenish account balance | $ 500,000 | |||||||||||||||
Grande Rotunda LLC [Member] | Mortgages [Member] | Maximum [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Replenish account balance | $ 1,000,000 | |||||||||||||||
Wells Fargo Bank [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Fixed interest rate | 3.00% | |||||||||||||||
Total loan carrying amount | $ 115,300,000 | |||||||||||||||
Tanant improvements | 118,500,000 | |||||||||||||||
Leasing costs | $ 3,380,000 | |||||||||||||||
Wells Fargo Bank [Member] | Manufacturer's and Traders Trust Company [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Loan amount | $ 23,500,000 | |||||||||||||||
S And A Commercial Associates Limited Partnership [Member] | Mortgages [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Membership interest percentage | 65.00% | 65.00% | ||||||||||||||
Repurchase amount of acquisition loan | $ 11,200,000 | $ 11,200,000 | ||||||||||||||
WestFREIT Corp [Member] | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Refinanced loan amount | $ 22,000,000 | |||||||||||||||
Basis points, interest rate | 2.75% | |||||||||||||||
Maturity date of loan | Apr. 28, 2019 | |||||||||||||||
Description of loan amendment terms | This refinancing resulted in: (i) a reduction in the annual interest rate from a fixed rate of 5.55% to a variable rate | |||||||||||||||
Net proceeds from refinancing of debt | $ 1,100,000 |
Fair value of long-term debt (D
Fair value of long-term debt (Details) - USD ($) $ in Thousands | Apr. 30, 2018 | Oct. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Fair value of long-term debt | $ 341,700 | $ 317,800 |
Carrying value of long-term debt | $ 348,556 | $ 321,572 |
Segment information (Details)
Segment information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2018USD ($)properties | Apr. 30, 2017USD ($) | Apr. 30, 2018USD ($)propertiessegments | Apr. 30, 2017USD ($)segments | |
Reportable Segments | ||||
Real estate rental revenue | $ 14,325 | $ 12,664 | $ 28,519 | $ 25,263 |
Real estate operating expenses | 8,555 | 10,554 | 18,572 | 19,677 |
Operating income | 5,770 | 2,110 | 9,947 | 5,586 |
Reconciliation to condensed consolidated net income (loss) attributable to common equity: | ||||
Segment NOI | 9,135 | 5,838 | 16,478 | 12,230 |
Deferred rents - straight lining | 75 | 173 | 173 | 311 |
Lease termination fee | (620) | (620) | ||
Investment income | 57 | 45 | 112 | 91 |
Unrealized gain on interest rate cap contract | 19 | 19 | ||
General and administrative expenses | (639) | (633) | (1,192) | (1,157) |
Depreciation | (2,801) | (2,648) | (5,512) | (5,178) |
Financing costs | (4,419) | (3,856) | (9,571) | (7,722) |
Net income (loss) | 1,427 | (1,701) | 507 | (2,045) |
Net (income) loss attributable to noncontrolling interests in subsidiaries | (312) | 1,002 | 251 | 1,409 |
Net income (loss) attributable to common equity | 1,115 | (699) | $ 758 | $ (636) |
Number of reportable segments | segments | 2 | 2 | ||
Operating Segments [Member] | ||||
Reportable Segments | ||||
Real estate rental revenue | 14,250 | 12,491 | $ 28,346 | $ 24,952 |
Real estate operating expenses | 5,115 | 6,653 | 11,868 | 12,722 |
Operating income | $ 9,135 | 5,838 | $ 16,478 | 12,230 |
Commercial [Member] | ||||
Reconciliation to condensed consolidated net income (loss) attributable to common equity: | ||||
Number of properties | properties | 9 | 9 | ||
Commercial [Member] | Operating Segments [Member] | ||||
Reportable Segments | ||||
Real estate rental revenue | $ 6,263 | 5,996 | $ 12,566 | 12,070 |
Real estate operating expenses | 2,964 | 2,950 | 6,001 | 5,835 |
Operating income | 3,299 | 3,046 | 6,565 | 6,235 |
Residential [Member] | ||||
Reportable Segments | ||||
Recurring capital improvements | $ (127) | (179) | $ (238) | (379) |
Reconciliation to condensed consolidated net income (loss) attributable to common equity: | ||||
Number of properties | properties | 8 | 8 | ||
Residential [Member] | Operating Segments [Member] | ||||
Reportable Segments | ||||
Real estate rental revenue | $ 7,987 | 6,495 | $ 15,780 | 12,882 |
Real estate operating expenses | 2,151 | 3,703 | 5,867 | 6,887 |
Operating income | $ 5,836 | $ 2,792 | $ 9,913 | $ 5,995 |
Income taxes (Details)
Income taxes (Details) | 12 Months Ended |
Oct. 31, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Ordinary taxable income distributed as dividends (percentage) | 100.00% |
Deferral of capital gain on sale of property from qualification as like-kind exchange of real estate pursuant to Section 1031 of the Internal Revenue Code | $ 15,400,000 |
Amount by which tax basis of replacement property in like-kind exchange is lower than acquisition cost | 18,800,000 |
Acquisition cost | $ 19,500,000 |
Stock option plan (Narrative) (
Stock option plan (Narrative) (Details) - USD ($) | Nov. 10, 2016 | Sep. 04, 2014 | Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | Oct. 31, 2017 |
Equity Incentive Plan [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Increase in number of shares authorized | 300,000 | ||||||
Shares available for issuance | 485,020 | 485,020 | |||||
Employee Stock Option [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Plan term | 10 years | 10 years | |||||
Vesting term | 5 years | 5 years | |||||
Options granted during period | 38,000 | 246,000 | |||||
Options granted during period | $ 21 | $ 18.45 | |||||
Compensation expense related to stock options | $ 30,000 | $ 30,000 | $ 61,000 | $ 61,000 | |||
Unrecognized compensation cost | 218,000 | 218,000 | $ 267,780 | ||||
Unrecognized compensation cost, recognition period | 1 year 10 months 25 days | ||||||
Aggregate intrinsic value of options expected to vest | 0 | 0 | |||||
Aggregate intrinsic value of options exercisable | $ 0 | $ 0 |
Stock option plan (Schedule of
Stock option plan (Schedule of Stock Option Activity) (Details) - Employee Stock Option [Member] - USD ($) | May 03, 2018 | Nov. 10, 2016 | Sep. 04, 2014 | Apr. 30, 2018 |
No. of Options Outstanding | ||||
Options outstanding beginning of period | $ 218,000 | $ 267,780 | ||
Options granted during period | 38,000 | 246,000 | ||
Options forfeited/cancelled during period | ||||
Options outstanding end of period | 267,780 | |||
Options vested and expected to vest | 262,280 | |||
Options exercisable at end of period | 147,940 | |||
Weighted Average Exercise Price | ||||
Options outstanding beginning of period | $ 18.81 | $ 18.81 | ||
Options granted during period | $ 21 | $ 18.45 | ||
Options forfeited/cancelled during period | ||||
Options outstanding end of period | $ 18.81 |
Stock option plan (Fair value a
Stock option plan (Fair value assumption of options granted) (Details) | 6 Months Ended |
Apr. 30, 2018$ / shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Estimated fair value of options granted | $ 3.54 |
Expected volatility | 30.30% |
Risk-free interest rate | 2.23% |
Imputed option life | 6 years 3 months 19 days |
Expected dividend yield | 4.66% |
Deferred fee plan (Details)
Deferred fee plan (Details) - USD ($) | 6 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Oct. 31, 2017 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Trustee fee expense | $ 434,000 | ||
Dividends payable | 337,000 | ||
Deferred Fee Plan [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Trustee fee expense | 423,300 | 410,200 | |
Deferred trustee fees | $ 430,000 | $ 423,200 | |
Basis spread on any deferred fee (percentage) | 1.50% | ||
Term of distribution to participants | 10 years | ||
Shares issued | 28,118 | 21,037 | |
Dividends payable | $ 6,700 | $ 13,000 |
Anchor tenant termination and40
Anchor tenant termination and modification of lease (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | Jul. 26, 2017 | |
Lease Termination Fee Disclosure [Abstract] | |||||
FREIT's ownership percentage in Wayne PSC | 40.00% | ||||
Annual rental income paid by Macy's, Inc. for terminated leased property | $ 234,000 | ||||
Lease termination fee | $ 620,000 | $ 620,000 | |||
Expected total rental income lost from termination of lease | $ 200,000 | ||||
Reduction in annual rent having adverse effect on future operating results | $ 250,000 |
Subsequent event (Details)
Subsequent event (Details) - Subsequent Event [Member] - Equity Incentive Plan [Member] | May 03, 2018$ / sharesshares |
Subsequent Event [Line Items] | |
Non-Qualified share option grant | shares | 38,000 |
Option exercise price | $ / shares | $ 15.50 |
Option term | 5 years |
Expiry period | 10 years |
Maturity date | May 2, 2028 |