8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

August 24, 2009

FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY

(Exact name of registrant as specified in charter)

New Jersey	000-25043	22-1697095
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
505 Main Street, Hackensack, New Jersey		07601
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:  (201) 488-6400

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2(b))  

o Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange  Act (17 CFR 240.13e-4 (c))

Item 8.01 Other Events

OPERATING RESULTS

The registrant has reported its operating results for the nine and three-month period ended July 31, 2009.  The Press Release is included as Exhibit I to this Form 8-K.

The statements in this report that relate to future earnings or performance are forward-looking. Actual results might differ materially and be adversely affected by such factors as longer than anticipated lease-up periods or the inability of tenants to pay increased rents. Additional information about these factors is contained in the Trust’s filings with the SEC including the Trust’s most recent filed report on Form 10-K and Form 10-Q.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
(Registrant)
By:	/s/ Robert S. Hekemian
	Robert S. Hekemian
	Chairman of the Board

Date:  August 24, 2009

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EXHIBIT INDEX

Exhibit
Number	Description
1	Press Release – Operating results for the nine and three-month period ended July 31, 2009.

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EX-1

Exhibit 1

HACKENSACK, NJ,  August 24, 2009 – First Real Estate Investment Trust (“FREIT”) announced its operating results for the nine and three-month periods ended July 31, 2009. The results of operations for the nine and three months are not necessarily indicative of future operating results.

RESULTS OF OPERATIONS

Real Estate revenue for the nine months ended July 31, 2009 (“Current Nine Months”) increased 1.2% to $31,803,000 compared to $31,435,000 for the nine months ended July 31, 2008 (“Prior Nine Months”). Real Estate revenue for the three months ended July 31, 2009 (“Current Quarter”) decreased 2.3% to $10,484,000 compared to $10,728,000 for the three months ended July 31, 2008 (“Prior Year’s Quarter”).

Net income for the Current Nine Months decreased 8.3% to $4,180,000 ($0.60 per share diluted) compared to $4,559,000 ($0.66 per share diluted) for the Prior Nine Months. Net income for the Current Quarter decreased 18% to  $1,574,000 ($0.23 per share diluted) compared to $1,919,000 ($0.28 per share diluted) for the Prior Year’s Quarter. Refer to the schedule below for a detailed analysis of the major changes that impacted revenue and net income for the nine and three months ended July 31, 2009 and 2008:

	Nine Months Ended July 31,									Three Months Ended July 31,
	2009			2008			Change			2009			2008			Change
	(in thousands, except per share)									(in thousands, except per share)
Real estate revenues:
Commercial properties	$	17,366		$	17,100		$	266		$	5,789		$	5,920		$	(131	)
Residential properties		14,437			14,335			102			4,695			4,808			(113	)
Total real estate revenues		31,803			31,435			368			10,484			10,728			(244	)
Operating expenses:
Real estate operations		13,193			12,620			573			4,206			3,938			268
General and administrative		1,329			1,145			184			449			335			114
Depreciation		4,407			4,086			321			1,470			1,411			59
Total operating expenses		18,929			17,851			1,078			6,125			5,684			441
Operating income		12,874			13,584			(710	)		4,359			5,044			(685	)
Investment income		170			437			(267	)		40			124			(84	)
Financing costs		(8,051	)		(8,694	)		643			(2,670	)		(2,876	)		206
Minority interest in earnings of subsidiaries		(813	)		(768	)		(45	)		(155	)		(373	)		218
Net income	$	4,180		$	4,559		$	(379	)	$	1,574		$	1,919		$	(345	)
Earnings per share:
Basic	$	0.60		$	0.67		$	(0.07	)	$	0.23		$	0.28		$	(0.05	)
Diluted	$	0.60		$	0.66		$	(0.06	)	$	0.23		$	0.28		$	(0.05	)
Weighted average shares outstanding:
Basic		6,944			6,802						6,942			6,844
Diluted		6,944			6,897						6,942			6,941

The consolidated results of operations for the Current Nine Months and Current Quarter are not necessarily indicative of the results to be expected for the full year.

First Real Estate Investment Trust of New Jersey
505 Main Street ● P.O. Box 667 ● Hackensack, New Jersey 07602 ● (201) 488-6400

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SEGMENT INFORMATION

The following table sets forth comparative net operating income ("NOI") data for FREIT’s real estate segments and reconciles the NOI to consolidated net income for the Current Nine Months and Current Quarter, as compared to the prior year’s comparable periods:

	Commercial												Residential												Combined
	Nine Months Ended												Nine Months Ended												Nine Months Ended
	July 31,						Increase (Decrease)						July 31,						Increase (Decrease)						July 31,
	2009			2008			$			%			2009			2008			$			%			2009			2008
	($ in thousands)												($ in thousands)												($ in thousands)
Rental income	$	13,108		$	12,806		$	302			2.4	%	$	14,197		$	14,175		$	22			0.2	%	$	27,305		$	26,981
Reimbursements		3,969			3,932			37			0.9	%		-			-			-						3,969			3,932
Other		153			150			3			2.0	%		240			160			80			50.0	%		393			310
Total revenue		17,230			16,888			342			2.0	%		14,437			14,335			102			0.7	%		31,667			31,223
Operating expenses		6,815			6,440			375			5.8	%		6,378			6,180			198			3.2	%		13,193			12,620
Net operating income	$	10,415		$	10,448		$	(33	)		-0.3	%	$	8,059		$	8,155		$	(96	)		-1.2	%		18,474			18,603
Average
Occupancy %		89.2	%		89.9	%					-0.7	%		93.0	%		94.9	%					-1.9	%
										Reconciliation to consolidated net income:
										Deferred rents - straight lining																163			140
										Amortization of acquired leases																(27	)		72
										Investment income																170			437
										General and administrative expenses																(1,329	)		(1,145	)
										Depreciation																(4,407	)		(4,086	)
										Financing costs																(8,051	)		(8,694	)
										Minority interest																(813	)		(768	)
													Net income												$	4,180		$	4,559
	Commercial												Residential												Combined
	Three Months Ended												Three Months Ended												Three Months Ended
	July 31,						Increase (Decrease)						July 31,						Increase (Decrease)						July 31,
	2009			2008			$			%			2009			2008			$			%			2009			2008
	($ in thousands)												($ in thousands)												($ in thousands)
Rental income	$	4,363		$	4,320		$	43			1.0	%	$	4,637		$	4,737		$	(100	)		-2.1	%	$	9,000		$	9,057
Reimbursements		1,327			1,475			(148	)		-10.0	%		-			-			-						1,327			1,475
Other		49			53			(4	)		-7.5	%		58			71			(13	)		-18.3	%		107			124
Total revenue		5,739			5,848			(109	)		-1.9	%		4,695			4,808			(113	)		-2.4	%		10,434			10,656
Operating expenses		2,094			2,027			67			3.3	%		2,112			1,911			201			10.5	%		4,206			3,938
Net operating income	$	3,645		$	3,821		$	(176	)		-4.6	%	$	2,583		$	2,897		$	(314	)		-10.8	%		6,228			6,718
Average
Occupancy %		89.8	%		89.8	%					0.0	%		91.8	%		94.2	%					-2.4	%
										Reconciliation to consolidated net income:
										Deferred rents - straight lining																59			48
										Amortization of acquired leases																(9	)		24
										Investment income																40			124
										General and administrative expenses																(449	)		(335	)
										Depreciation																(1,470	)		(1,411	)
										Financing costs																(2,670	)		(2,876	)
										Minority interest																(155	)		(373	)
													Net income												$	1,574		$	1,919

NOI is based on operating revenue and expenses directly associated with the operations of the real estate properties, but excludes deferred rents (straight lining), lease amortization, depreciation, financing costs and other non-operating activity. FREIT assesses and measures segment operating results based on NOI. NOI is not a measure of operating results or cash flows as measured by generally accepted accounting principles, 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.

Both our commercial and residential business segments continue to be profitable. However, the recession’s impact on FREIT’s Current Quarter is evidenced by a decrease in revenue, which combined with an increase in expenses, resulted in a decline in NOI from the Prior Nine Months and Prior Year’s Quarter. The impact of the recession on FREIT’s commercial and residential segments is further discussed below.

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COMMERCIAL SEGMENT

Total revenue and NOI for FREIT’s commercial segment decreased 1.9% and 4.6%, respectively, for the Current Quarter, as compared to last year’s comparable quarter. Lower reimbursable expenses resulting from prior year CAM adjustments and an increase in the allowance for doubtful accounts at FREIT’s Grande Rotunda subsidiary contributed significantly to the decline in total revenue and NOI for the commercial segment.

Consumer spending continues to be negatively impacted by the recession. This has resulted in low sales volume and lower profitability to many retail merchants, including those who are our tenants. As a result, some tenants have closed their business; some have been put on relaxed payment plans, and some are seeking reduced rents or other rent concessions. Delinquencies have risen, causing us to increase our allowance for doubtful accounts. To date our tenant fall-out has been minor as average occupancy for the Current Nine Months was at 89.2%, a decrease of 0.7% from last year’s comparable period, and was flat for the Current Quarter as compared to the Prior Year’s Quarter. However, we may experience additional fall-out of some smaller tenants, and if the recession is prolonged, some larger tenants.  We expect re-leasing of vacated space to take longer and, generally at lower rents that reflect current economic conditions. We expect our revenues at our commercial properties to be lower during fiscal 2009 than during fiscal 2008.

RESIDENTIAL SEGMENT

The financial performance of FREIT’s residential segment was clearly impacted by the recession for the Current Quarter. Total revenue and NOI for the Current Quarter decreased 2.4% and 10.8%, respectively as compared to last year’s comparable period. The decrease in revenue and NOI for the quarter was primarily attributable to a drop in average occupancy, a decrease in base rental income at certain residential properties, and an overall increase in expenses.

While average occupancy at our residential properties for the Current Nine Months is at 93.0%, the effects of the economic recession are being felt. Year-to-date, occupancy has fallen 1.9% compared to the Prior Nine Months, and has declined 2.4% during the Current Quarter compared to the Prior Year’s Quarter. These declines are attributable to the higher than normal unemployment in our areas of operation. Additionally, we are experiencing rent reductions, a higher number of move-outs, and higher than usual incidences of delinquencies of rental payments. As with our commercial segment, we have increased our allowance for doubtful accounts. We expect these trends to continue through fiscal 2009 and result in residential revenues that are lower than during fiscal 2008.

FUNDS FROM OPERATIONS (“FFO”):

Many consider FFO as the standard measurement of a REIT’s performance. We compute FFO as follows:

		Nine Months Ended						Three Months Ended
		July 31,						July 31,
		2009			2008			2009			2008
		($ in thousands)						($ in thousands)
Net income		$	4,180		$	4,559		$	1,574		$	1,919
Depreciation			4,407			4,086			1,470			1,411
Amortization of deferred mortgage costs			174			222			57			81
Deferred rents (Straight lining)			(163	)		(140	)		(59	)		(48	)
Amortization of acquired leases			27			(72	)		9			(24	)
Capital Improvements - Apartments			(143	)		(346	)		(36	)		(88	)
Minority interests:
Equity in earnings of affiliates			813			768			155			373
Distributions to minority interests			(820	)		(707	)		(257	)		(112	)
	FFO	$	8,475		$	8,370		$	2,913		$	3,512
	Per Share - Basic	$	1.22		$	1.23		$	0.42		$	0.51
	Per Share - Diluted	$	1.22		$	1.21		$	0.42		$	0.51
	Weighted Average Shares Outstanding:
	Basic		6,944			6,802			6,942			6,844
	Diluted		6,944			6,897			6,942			6,941

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FFO does not represent cash generated from operating activities in accordance with accounting principles generally accepted in the United States of America, and therefore should not be considered a substitute for net income as a measure of results of operations or for cash flow from operations as a measure of liquidity. Additionally, the application and calculation of FFO by certain other REITs may vary materially from that of FREIT’s, and therefore FREIT’s FFO and the FFOof other REITs may not be directly comparable.

REFINANCINGS

On August 6, 2009, FREIT refinanced the mortgage loans secured by its Berdan Court apartment property in Wayne, NJ, with a new mortgage for approximately $20 million. The refinanced mortgages had outstanding principal balances that aggregated approximately $12.3 million at a weighted average interest rate of 6.7%, and were due January 1, 2010. The new mortgage bears interest at 6.09%, and is due September 1, 2019.

DIVIDENDS

The third quarter dividend of $0.30 per share is payable on September 11, 2009 to shareholders of record on September 1, 2009.

The statements in this report that relate to future earnings or performance are forward-looking. Actual results might differ materially and be adversely affected by such factors as longer than anticipated lease-up periods or the inability of tenants to pay increased rents. Additional information about these factors is contained in the Trust’s filings with the SEC including the Trust’s most recent filed report on Form 10-K and Form 10-Q.

First Real Estate Investment Trust is a publicly traded (over-the-counter – symbol FREVS) REIT organized in 1961. It has approximately $247 million (historical cost basis) of assets. Its portfolio of residential and commercial properties extends from Eastern L.I. to Maryland, with the largest concentration in Northern New Jersey.

For additional information contact Shareholder Relations at (201) 488-6400

Visit us on the web:  www.freitnj.com

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