Mortgages, notes payable and credit line (Tables)

12 Months Ended

Oct. 31, 2013

Debt Disclosure [Abstract]

Schedule of debt

	October 31,
	2013		2012
	(In Thousands of Dollars)
Frederick, MD (A)	$	22,000	$	22,000
Rockaway, NJ (B)		18,440		18,828
Westwood, NJ (C)		—		8,032
Westwood, NJ (D)		22,388		—
Patchogue, NY (E)		5,503		5,623
Wayne, NJ (F)		18,976		19,248
River Edge, NJ (G):
First mortgage		3,952		4,098
Second mortgage		1,494		1,557
Maywood, NJ (H):
First mortgage		2,868		2,974
Second mortgage		1,060		1,105
Westwood, NJ (I)		22,383		22,774
Wayne, NJ (J)		26,863		27,697
Hackensack, NJ (K)		31,797		32,364
Damascus, MD (L)		19,699		—
Total fixed rate mortgage loans		197,423		166,300
Baltimore, MD (M)		—		19,070
Damascus, MD - Construction Loan (N)		—		15,050
Line of credit - Provident Bank (O)		2,000		—
Total mortgages and notes payable	$	199,423	$	200,420

(A) Payable in monthly installments of interest only computed over the actual number of days in the elapsed monthly interest period at the rate of 5.55% through May 2017 at which time the outstanding balance is due. The mortgage is secured by a retail building in Frederick, MD having a net book value of approximately $17,967,000 as of October 31, 2013.

(B) Payable in monthly installments of $115,850 including interest at 5.37% through February 2022 at which time the outstanding balance is due. The mortgage is secured by a residential building in Rockaway, NJ having a net book value of approximately $17,462,000 as of October 31, 2013.

(C) Payable in monthly installments of $73,248 including interest at 7.38% through February 2013 at which time the outstanding balance is due. (See Note 5(D).)

(D) 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, which is payable in monthly installments of $129,702 including interest at 4.75% through January 2023 at which time the outstanding balance is due. The new mortgage is secured by a retail building in Westwood, NJ having a net book value of approximately $8,641,000 as of October 31, 2013.

(E) Payable in monthly installments of $36,457 including interest at 6.125%, through March 2018 at which time the outstanding balance is due. Under the terms of the mortgage loan agreement, FREIT can request, during the term of the loan, additional fundings that will bring the outstanding principal balance up to 75% of loan-to-value (percentage of mortgage loan to total appraised value of property securing the loan). FREIT has renegotiated the interest rate on this loan to a fixed rate of 4.5% from January 1, 2013 until maturity at March 1, 2018. The mortgage is secured by a retail building in Patchogue, NY having a net book value of approximately $7,376,000 as of October 31, 2013.

(F) Payable in monthly installments of $121,100 including interest at 6.09%, through September 1, 2019 at which time the outstanding balance is due. The mortgage is secured by an apartment building in Wayne, NJ having a net book value of approximately $1,702,000 as of October 31, 2013.

(G) The first mortgage is payable in monthly installments of $34,862 including interest at 6.75% through December 2013 at which time the outstanding balance is due. The second mortgage is payable in monthly installments of $12,318 including interest at 5.53% through December 2013 at which time the outstanding balance is due. On November 19, 2013, FREIT refinanced these mortgage loans, which were scheduled to mature on December 1, 2013. The amount of the new loan is $11,200,000 at a fixed interest rate of 4.5%, with a scheduled maturity of March 1, 2018. The mortgages are secured by an apartment building in River Edge, NJ having a net book value of approximately $1,011,000 as of October 31, 2013.

(H) The first mortgage is payable in monthly installments of $25,295 including interest at 6.75% through December 2013 at which time the outstanding balance is due. The second mortgage is payable in monthly installments of $8,739 including interest at 5.53% through December 2013 at which time the outstanding balance is due. On November 19, 2013, FREIT refinanced these mortgage loans, which were scheduled to mature on December 1, 2013. The amount of the new loan is $8,500,000 at a fixed interest rate of 4.5%, with a scheduled maturity of March 1, 2018. The mortgages are secured by an apartment building in Maywood, NJ having a net book value of approximately $684,000 as of October 31, 2013.

(I) Payable in monthly installments of $120,752 including interest of 4.62%, through November 1, 2020, at which time the outstanding balance is due. The mortgage is secured by an apartment building in Westwood, NJ having a net book value of approximately $10,667,000 as of October 31, 2013.

(J) Payable in monthly installments of $206,960 including interest of 6.04% until June 2016 at which time the unpaid balance is due. The mortgage is secured by a shopping center in Wayne, NJ having a net book value of approximately $27,616,000 as of October 31, 2013.

(K) Payable in monthly installments of $191,197 including interest of 5.38% until May 2019 at which time the unpaid balance is due. The mortgage is secured by an apartment building in Hackensack, NJ having a net book value of approximately $40,991,000 as of October 31, 2013.

(L) On December 26, 2012, Damascus Centre, LLC refinanced its $15 million construction loan (see Note 5(N)) 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 October 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 bears a floating interest rate equal to 210 basis points over the BBA LIBOR and the loan will mature on January 3, 2023. 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. (See Note 6 for additional information relating to the interest rate swap.) The shopping center securing the loan has a net book value of approximately $30,347,000 as of October 31, 2013.

(M) On February 1, 2010, a principal payment of $3 million was made reducing the original loan amount of $22.5 million to $19.5 million and the due date was extended until February 1, 2013. As part of the terms of the loan extension agreement, the loan was further collateralized by a first mortgage lien and the assignment of the ground lease on FREIT’s Rochelle Park, NJ land parcel. Under the restructured terms, the interest rate is now 350 basis points above the BBA LIBOR with a floor of 4%, and monthly principal payments of $10,000 are required. An additional principal payment of $110,000 was required on February 1, 2012 in order to reduce the loan to achieve the stipulated debt service coverage ratio. Under the agreement with the equity owners of Grande Rotunda, LLC, FREIT would be responsible for 60% of any cash required by Grande Rotunda, LLC, and 40% would be the responsibility of the minority interest. The due date of the loan was further extended to May 1, 2013 from February 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. The purchase of this loan by FREIT was completed on May 28, 2013. FREIT sold this loan to the lender providing the construction financing for the expansion of the Rotunda project. On December 9, 2013, Grande Rotunda, LLC closed with Wells Fargo Bank on a construction loan of up to $120 million to be used 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 will be secured by a mixed-use property in Baltimore, MD (FREIT’s Rotunda property), which has a net book value of approximately $41,545,000 as of October 31, 2013.

(N) On February 12, 2008, Damascus Second, LLC closed on a $27.3 million construction loan, secured by the Damascus Center owned by Damascus Centre, LLC located in Damascus, MD. This loan has a term of forty-eight (48) months, with one twelve (12) month extension option, which was exercised. Draws against this loan bear interest at a floating rate equal to 135 basis points over the BBA LIBOR daily floating rate. As a result of a revaluation of future funding needs of the redevelopment project, on May 6, 2010, Damascus Centre, LLC entered into a modification of its construction loan agreement, which reduced the amount of the construction loan facility from $27.3 million to $21.3 million. In addition, the construction completion due date was extended until November 1, 2011. All other terms of the construction loan remain unchanged. As of October 31, 2012, $15.0 million of this loan, which includes accrued interest, was drawn down to cover construction costs, and all construction was completed as of this date. Additional tenant fit-up costs are expected, once the new space is leased and occupied. FREIT guarantees 30% of the outstanding principal amount of the loan plus other costs, if borrower defaults, however, Damascus 100, LLC (a 30% joint venture partner in Damascus Centre, LLC) has indemnified FREIT for up to 30% of any losses under its guaranty. On December 26, 2012, Damascus Centre, LLC refinanced its construction loan with long-term financing provided by People’s United Bank. (See Note 5(L) above.)

(O) Credit Line: FREIT has a line of credit provided by the Provident Bank in the amount of $13 million. The line of credit is for a two year term ending on July 29, 2014, but can be cancelled by the bank, at its will, within 60 days before or after each anniversary date. The credit line will automatically be extended at the termination date of the current term and each subsequent term for an additional period of 24 months, provided there is no default and the credit line has not been cancelled. Draws against the credit line can be used for general corporate purposes, for property acquisitions, construction activities, and letters of credit. Draws against the credit line are secured by mortgages on FREIT’s Franklin Crossing Shopping Center, Franklin Lakes, NJ, and retail space in Glen Rock, NJ. Interest rates on draws will be set at the time of each draw for 30, 60, or 90-day periods, based on our choice of the prime rate or at 175 basis points over the 30, 60, or 90-day LIBOR rates at the time of the draws. The interest rate on the line of credit has a floor of 3.5%. The Palisades Manor property was sold in April 2013, and the Grandview Apartments was sold in August 2013. These properties were collateral for the credit line. Provident Bank has released these properties as collateral for the credit line, and as a result, the credit line has been reduced from $18 million to approximately $13 million as of July 2013. As of October 31, 2013, approximately $11 million was available under the line of credit, and $2 million was outstanding.

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 October 31, 2013 and 2012:

	October 31,		October 31,
($ in Millions)	2013		2012
Fair Value	$	201.9	$	213.2
Carrying Value	$	199.4	$	200.4

Schedule of principal amounts of long-term debt

Principal amounts (in thousands of dollars) due under the above obligations in each of the five years subsequent to October 31, 2013 are as follows: 

Year Ending October 31,	Amount
2014	$	12,989	(a)
2015	$	3,777
2016	$	28,096
2017	$	25,138
2018	$	8,117

(a) Includes $9.4 million related to the River Edge and Maywood mortgages, which were refinanced in December 2013 (see Note 5(G) & (H)).