0000914317-11-001232.txt : 20110902 0000914317-11-001232.hdr.sgml : 20110902 20110902131054 ACCESSION NUMBER: 0000914317-11-001232 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20110902 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20110902 DATE AS OF CHANGE: 20110902 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY CENTRAL INDEX KEY: 0000036840 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 221697095 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25043 FILM NUMBER: 111073003 BUSINESS ADDRESS: STREET 1: 505 MAIN ST STREET 2: P O BOX 667 CITY: HACKENSACK STATE: NJ ZIP: 07602 BUSINESS PHONE: 2014886400 MAIL ADDRESS: STREET 1: P O BOX 667 STREET 2: 505 MAIN STREET CITY: HACKENSACK STATE: NJ ZIP: 07602 8-K 1 form8k-117841_freit.htm FORM 8K form8k-117841_freit.htm
 

 
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):
 
 
September 2, 2011
 
 
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 2.02  Results of Operations and Financial Condition

OPERATING RESULTS

The registrant has released its operating results for the nine and three-month periods ended July 31, 2011.  The Press Release is included as Exhibit 99.1 to this Form 8-K.

Item 9.01  Financial Statements and Exhibits

(d)  Exhibits

99.1  Registrant’s press release dated September 2, 2011







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.





2



 
 
 





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:  September 2, 2011


 
3
 

 
 
 
 



EXHIBIT INDEX

Exhibit
  
Number
Description
   
  99.1
Press Release – Operating results for the nine and three-month periods ended July 31, 2011.


 
 
 
 
 
 
 
4
 
 
 
 
 
 
 EX-99.1 2 ex99-1.htm EXHIBIT 99.1 ex99-1.htm
 

 
Exhibit 99.1




 

HACKENSACK, NJ,   September 2, 2011 – First Real Estate Investment Trust (“FREIT”) reported its operating results for the nine and three-month periods ended July 31, 2011. The results of operations as presented in this earnings release are unaudited, and are not necessarily indicative of future operating results.

FINANCIAL HIGHLIGHTS
  
Nine Months Ended July 31, 2011
Three Months Ended July 31, 2011
*  Net Income Per Share-Basic:
  
$0.55
$0.22
*  Dividends Per Share:
  
$0.90
$0.30
*  FFO Per Share-Basic:
  
$1.15
$0.40
*  FFO Payout:
    
78.3%
75.0%
*  Average Residential Occupancy:
95.0%
96.2%
*  Average Commercial Occupancy:
89.7%
89.6%

 
RESULTS OF OPERATIONS
 
Net income attributable to common equity (“net income-common equity”) for the nine months ended July 31, 2011 (“Current Nine Months”) was $3,844,000 ($0.55 per share basic) compared to $3,678,000 ($0.53 per share basic) for the nine months ended July 31, 2010 (“Prior Nine Months”). Net income-common equity for the three months ended July 31, 2011 (“Current Quarter”) was $1,505,000 ($0.22 per share basic) compared to $1,376,000 ($0.20 per share basic) for the three months ended July 31, 2010 (“Prior Year’s Quarter”). The schedule below provides a detailed analysis of the major changes that impacted net income-common equity for the nine and three months ended July 31, 2011 and 2010:
 
   
Nine Months Ended July 31,
    
Three Months Ended July 31,
  
   
2011
    
2010
    
Change
    
2011
    
2010
    
Change
  
   
(in thousands, except per share)
    
(in thousands, except per share)
  
Real estate revenues:
                                    
  Commercial properties
   $ 18,037     $ 18,757     $ (720 )   $ 6,000     $ 6,058     $ (58 )
  Residential properties
     14,725       14,299       426       4,935       4,789       146  
      Total real estate revenues
     32,762       33,056       (294 )     10,935       10,847       88  
                                                 
Operating expenses:
                                                
  Real estate operations
     13,479       14,238       (759 )     4,285       4,532       (247 )
  General and administrative
     1,189       1,233       (44 )     393       392       1  
  Depreciation
     4,560       4,556       4       1,538       1,492       46  
      Total operating expenses
     19,228       20,027       (799 )     6,216       6,416       (200 )
                                                 
      Operating income
     13,534       13,029       505       4,719       4,431       288  
                                                 
Investment income
     77       95       (18 )     25       29       (4 )
                                                 
  Financing costs
     (8,724 )     (8,703 )     (21 )     (2,910 )     (2,922 )     12  
      Net income
     4,887       4,421       466       1,834       1,538       296  
Net income attributable to noncontrolling interests (formerly referred to as minority interests)
     (1,043 )     (743 )     (300 )     (329 )     (162 )     (167 )
    Net income attributable to common equity
   $ 3,844     $ 3,678     $ 166     $ 1,505     $ 1,376     $ 129  
                                                 
Earnings per share-basic (attributable to common equity)
   $ 0.55     $ 0.53     $ 0.02     $ 0.22     $ 0.20     $ 0.02  
                                                 
Weighted average shares outstanding
     6,942       6,942               6,942       6,942          




 
1
 




SEGMENT INFORMATION
 
The following tables set forth comparative net operating income ("NOI") data for FREIT’s real estate segments and reconcile the NOI to consolidated net income-common equity 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,
              
July 31,
              
July 31,
  
   
2011
    
2010
    
Increase (Decrease)
    
2011
    
2010
    
Increase (Decrease)
    
2011
    
2010
  
   
($ in thousands)
          
%
  
($ in thousands)
          
%
  
($ in thousands)
  
Rental income
   $ 13,842     $ 14,041     $ (199 )     -1.4 %   $ 14,470     $ 14,125     $ 345       2.4 %   $ 28,312     $ 28,166  
Reimbursements
     3,911       4,458       (547 )     -12.3 %     -       -       -               3,911       4,458  
Other
     140       118       22       18.6 %     255       174       81       46.6 %     395       292  
Total revenue
     17,893       18,617       (724 )     -3.9 %     14,725       14,299       426       3.0 %     32,618       32,916  
                                                                                 
Operating expenses
     7,198       7,337       (139 )     -1.9 %     6,281       6,901       (620 )     -9.0 %     13,479       14,238  
Net operating income
   $ 10,695     $ 11,280     $ (585 )     -5.2 %   $ 8,444     $ 7,398     $ 1,046       14.1 %     19,139       18,678  
Average
                                                                                
Occupancy %
     89.7 %     89.9 %             -0.2 %     95.0 %     94.0 %             1.0 %                
                                                                                 
                           
Reconciliation to consolidated net income:
                          
                           
Deferred rents - straight lining
               162       162  
                           
Amortization of acquired leases
             (18 )     (22 )
                           
Investment income
             77       95  
                           
General and administrative expenses
           (1,189 )     (1,233 )
                           
Depreciation
           (4,560 )     (4,556 )
                           
Financing costs
           (8,724 )     (8,703 )
                           
Net income
         4,887       4,421  
                           
Net income attributable to noncontrolling interests
       (1,043 )     (743 )
                           
Net income attributable to common equity
   $ 3,844     $ 3,678  
 
   
Commercial
  
Residential
  
Combined
   
Three Months Ended
              
Three Months Ended
              
Three Months Ended
  
   
July 31,
              
July 31,
              
July 31,
   
2011
    
2010
    
Increase (Decrease)
    
2011
    
2010
    
Increase (Decrease)
    
2011
    
2010
  
   
($ in thousands)
          
%
  
($ in thousands)
          
%
  
($ in thousands)
  
Rental income
   $ 4,571     $ 4,408     $ 163       3.7 %   $ 4,866     $ 4,731     $ 135       2.9 %   $ 9,437     $ 9,139  
Reimbursements
     1,323       1,568       (245 )     -15.6 %     -       -       -               1,323       1,568  
Other
     40       36       4       11.1 %     69       58       11       19.0 %     109       94  
Total revenue
     5,934       6,012       (78 )     -1.3 %     4,935       4,789       146       3.0 %     10,869       10,801  
                                                                                 
Operating expenses
     2,246       2,333       (87 )     -3.7 %     2,039       2,199       (160 )     -7.3 %     4,285       4,532  
Net operating income
   $ 3,688     $ 3,679     $ 9       0.2 %   $ 2,896     $ 2,590     $ 306       11.8 %     6,584       6,269  
Average
                                                                                
Occupancy %
     89.6 %     89.3 %             0.3 %     96.2 %     94.4 %             1.8 %                
                                                                                 
                           
Reconciliation to consolidated net income:
                      
                           
Deferred rents - straight lining
           72       53  
                           
Amortization of acquired leases
           (6 )     (7 )
                           
Investment income
         25       29  
                           
General and administrative expenses
       (393 )     (392 )
                           
Depreciation
       (1,538 )     (1,492 )
                           
Financing costs
         (2,910 )     (2,922 )
                           
Net income
         1,834       1,538  
                           
Net income attributable to noncontrolling interests
       (329 )     (162 )
                           
Net income attributable to common equity
       $ 1,505     $ 1,376  
 
 
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 items. FREIT assesses and measures segment operating results based on NOI. NOI is not a measure of operating results or cash flow 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.

 
2
 





COMMERCIAL SEGMENT
 
Total revenue and NOI from FREIT’s commercial segment for the Current Nine Months decreased by 3.9% and 5.2%, respectively, as compared to the Prior Nine Months. For the Current Quarter, total revenue decreased by 1.3%, as compared to the Prior Year’s Quarter. However, NOI for the Current Quarter increased by 0.2% over the Prior Year’s Quarter. The primary reasons for the decrease in both revenue and NOI for the Current Nine Months were a $250,000 lease termination fee recorded in the Prior Nine Months, with no comparable activity in the current year, and lower expense reimbursements stemming from prior year common area maintenance adjustments.
 
Although the U.S. economy has recovered from the recession, the rate of recovery has been much slower than anticipated. In addition, forecasts for economic growth and job gains over the next year have been downsized, due in large part to the recent turbulence in the US and global markets. Retail sales over the past nine months have posted slight gains, although among retailers, results have been mixed. The biggest problem in our areas of operations continues to be unemployment, renewing consumers’ concerns about their jobs, resulting in a reluctance to increase spending. To date, our tenant fall-out has been minor, as average occupancy rates (exclusive of the Damascus Center, which is undergoing a major redevelopment project) for the Current Nine Months was at 94.3%, a slight decrease of 0.1% from last year’s comparable period. For the Current Quarter, average occupancy was at 94.1%, equal with the Prior Year’s Quarter.
 
At Westridge, FREIT is actively pursuing the leasing of the space to be vacated by Giant supermarket as of October 31, 2011. It is FREIT’s intention to re-lease the space to a new tenant or tenants that will enhance the shopping experience at Westridge.  However, the space will be vacant and no rent will be received from the space beginning on November 1, 2011 unless or until FREIT is able to re-lease the space, and it is occupied by a new tenant(s). Additionally, FREIT expects to incur leasing costs and tenant improvement costs associated with re-leasing the space. The vacancy may adversely affect FREIT’s operating results in fiscal 2012 depending upon the outcome and timing of FREIT’s re-leasing efforts for this space. FREIT is reevaluating its decision to market Westridge for sale in light of the Giant lease expiration.
 
Construction has commenced for the completion of the expansion and renovation of the Damascus Center. It is expected that construction will be completed on or about November 1, 2011.
 

RESIDENTIAL SEGMENT
 
Total revenue and NOI from FREIT’s residential segment for the Current Nine Months increased by 3.0% and 14.1%, respectively, as compared to the Prior Nine Months. For the Current Quarter, total revenue and NOI increased by 3.0% and 11.8%, respectively, as compared to the Prior Year’s Quarter. The increase in total revenue and NOI for the Current Nine Months and Current Quarter are primarily attributable to higher occupancy levels and higher base rental income at many of our residential properties, in addition to overall lower operating costs. Current Nine Month results also include a $235,000 insurance recovery relating to storm damages incurred and expensed last year at the Pierre Towers apartment complex. The recovery has been recorded as an offset within operating expenses. The positive operating results for the Current Nine Months and Current Quarter reflect the upward movement of occupancy levels, as evidenced by average occupancy increasing 1.0% and 1.8%, respectively, over last year’s comparable periods.
 
FREIT continues to actively pursue the sale of the Palisades Manor Apartments, in Palisades Park, NJ, the Grandview Apartments in Hasbrouck Heights, NJ, and the Heights Manor Apartments in Spring Lake Heights, NJ. The decision to sell these properties was based on the Board’s desire to re-deploy the net proceeds arising from the sale to real estate assets in other areas of FREIT’s operations. It is not possible for management to estimate when a sale of any of these properties will occur.







 
3
 


 
FUNDS FROM OPERATIONS (“FFO”):
 
Many consider FFO, which is a non-GAAP financial measure, as the standard measurement of a REIT’s performance. We compute FFO as follows:
 
   
Nine Months Ended
    
Three Months Ended
  
   
July 31,
    
July 31,
  
   
2011
    
2010
    
2011
    
2010
  
   
(in thousands, except per share)
    
(in thousands, except per share)
  
                         
Net income
   $ 4,887     $ 4,421     $ 1,834     $ 1,538  
Depreciation
     4,560       4,556       1,538       1,492  
Amortization of deferred leasing costs
     215       208       72       72  
Deferred rents (Straight lining)
     (162 )     (162 )     (73 )     (53 )
Amortization of acquired leases
     18       22       6       7  
Capital Improvements - Apartments
     (367 )     (254 )     (228 )     (134 )
Distributions to noncontrolling interests
     (1,144 )     (1,022 )     (380 )     (330 )
FFO
   $ 8,007     $ 7,769     $ 2,769     $ 2,592  
                                 
 FFO Per Share-Basic
   $ 1.15     $ 1.12     $ 0.40     $ 0.37  
                                 
 Weighted Average Shares Outstanding
     6,942       6,942       6,942       6,942  

Note: The FFO calculation for 2010 has been restated to conform to the current year’s presentation.

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 FFO of other REITs may not be comparable.

DIVIDENDS
The 3rd quarter dividend of $0.30 per share will be paid on September 15, 2011 to shareholders of record on September 1, 2011.
 

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 to be filed covering this period.
 
First Real Estate Investment Trust is a publicly traded (over-the-counter – symbol FREVS.OB) REIT organized in 1961. It has approximately $241 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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