Mortgage refinancing	9 Months Ended
Jul. 31, 2013
Mortgage Refinancing
Mortgage refinancing	Note 9 – Mortgage refinancings: On December 26, 2012, Damascus Centre, LLC refinanced its $15.0 million construction loan with long-term financing provided by People’s United Bank. The amount of the new loan is $25 million of which $20 million has been drawn as of July 31, 2013. The balance, up to an additional $5 million, will be available as a one-time draw over the 36 month period ending December 26, 2015, and the amount available will depend on future leasing at the shopping center. The new loan will mature on January 3, 2023. The loan bears a floating interest rate equal to 210 basis points over the BBA LIBOR. In order to minimize interest rate volatility during the term of the loan, Damascus Centre, LLC entered into an interest rate swap agreement that in effect, converted the floating interest rate to a fixed interest rate of 3.81% over the term of the loan. The interest rate swap is considered a derivative financial instrument that will be used only to reduce interest rate risk, and not held or used for trading purposes. On January 14, 2013, FREIT refinanced its Westwood Plaza mortgage loan in the amount of $8.0 million, with a new mortgage loan in the amount of $22,750,000. The new loan is at a fixed interest rate of 4.75%, and matures in January 2023. Excess funds from this refinancing will be used to fund tenant fit-up costs at our retail shopping centers, as well as other operational and financing cash flow needs. On May 28, 2013, the balance of the Grande Rotunda LLC acquisition loan amounting to $19 million was purchased from the bank by FREIT. The due date of the loan was May 1, 2013. While the bank agreed to an additional extension of ninety-days (90) from May 1, 2013, FREIT elected to purchase the Rotunda loan from the bank and have all the bank’s rights assigned to FREIT. It is FREIT’s intention to sell this loan to the lender providing the construction financing for the expansion of the Rotunda project. Grande Rotunda, LLC and FREIT have signed a term sheet with a major bank to secure a construction loan in an amount of up to $120 million, for the purpose of funding the major redevelopment and expansion project planned for the Rotunda. The construction loan will be for a term of four (4) years, with one 12-month extension, at a rate of 225 basis points over the monthly LIBOR. The loan is expected to close by the end of September 2013. FREIT is currently in the process of refinancing its Hammel Gardens and Steuben Arms mortgage loans, which are scheduled to mature on December 1, 2013. The Company has elected to refinance these loans prior to their due date in order to take advantage of the favorable interest rates. The refinancing of these loans, which have outstanding balances aggregating $9.5 million at July 31, 2013, is expected to close before October 31, 2013.

Mortgage refinancing

9 Months Ended

Jul. 31, 2013

Note 9 – Mortgage refinancings:

On December 26, 2012, Damascus Centre, LLC refinanced its $15.0 million construction loan with long-term financing provided by People’s United Bank. The amount of the new loan is $25 million of which $20 million has been drawn as of July 31, 2013. The balance, up to an additional $5 million, will be available as a one-time draw over the 36 month period ending December 26, 2015, and the amount available will depend on future leasing at the shopping center. The new loan will mature on January 3, 2023. The loan bears a floating interest rate equal to 210 basis points over the BBA LIBOR. In order to minimize interest rate volatility during the term of the loan, Damascus Centre, LLC entered into an interest rate swap agreement that in effect, converted the floating interest rate to a fixed interest rate of 3.81% over the term of the loan. The interest rate swap is considered a derivative financial instrument that will be used only to reduce interest rate risk, and not held or used for trading purposes.

On January 14, 2013, FREIT refinanced its Westwood Plaza mortgage loan in the amount of $8.0 million, with a new mortgage loan in the amount of $22,750,000. The new loan is at a fixed interest rate of 4.75%, and matures in January 2023. Excess funds from this refinancing will be used to fund tenant fit-up costs at our retail shopping centers, as well as other operational and financing cash flow needs.

On May 28, 2013, the balance of the Grande Rotunda LLC acquisition loan amounting to $19 million was purchased from the bank by FREIT. The due date of the loan was May 1, 2013. While the bank agreed to an additional extension of ninety-days (90) from May 1, 2013, FREIT elected to purchase the Rotunda loan from the bank and have all the bank’s rights assigned to FREIT. It is FREIT’s intention to sell this loan to the lender providing the construction financing for the expansion of the Rotunda project. Grande Rotunda, LLC and FREIT have signed a term sheet with a major bank to secure a construction loan in an amount of up to $120 million, for the purpose of funding the major redevelopment and expansion project planned for the Rotunda. The construction loan will be for a term of four (4) years, with one 12-month extension, at a rate of 225 basis points over the monthly LIBOR. The loan is expected to close by the end of September 2013.

FREIT is currently in the process of refinancing its Hammel Gardens and Steuben Arms mortgage loans, which are scheduled to mature on December 1, 2013. The Company has elected to refinance these loans prior to their due date in order to take advantage of the favorable interest rates. The refinancing of these loans, which have outstanding balances aggregating $9.5 million at July 31, 2013, is expected to close before October 31, 2013.