Property acquisition

12 Months Ended

Oct. 31, 2015

Property acquisition [Abstract]

Property acquisition

Note 3 – Property acquisition:

On June 18, 2014, FREIT completed the acquisition of the Regency Club (“Regency”), a residential apartment complex located in Middletown, New York. The Regency complex consists of 132 units in 11 buildings and a clubhouse.The acquisition cost was $20,625,000 (exclusive of $648,000 of transaction costs charged to expense), which was funded in part with $9.8 million in net proceeds from the sale of the South Brunswick land, and the remaining balance of $11.5 million (inclusive of the $648,000 of transaction costs) was funded utilizing $10 million of FREIT's credit line with Provident Bank, and FREIT's available cash. On December 29, 2014, FREIT secured long-term financing for this property in the amount of $16.2 million from Provident Bank. 

The acquisition price of $20,625,000 has been allocated as follows: $18.5 million to the buildings and $2.1 million to the land.

FREIT identified the Regency as a replacement property for the vacant land located in South Brunswick, New Jersey that FREIT sold on December 20, 2013 (see Note 2). The Regency is part of FREIT's Residential segment.

The following unaudited pro forma information shows the results of operations for the fiscal years ended October 31, 2014 and 2013 for FREIT and its Subsidiaries as though the Regency had been acquired at the beginning of fiscal 2013:

	Years Ended October 31,
	2014			2013
	(In Thousands)
Revenues	$	44,016		$	43,672
Net expenses		40,033			39,935
Income from continuing operations		3,983			3,737
Income from discontinued operations		7			797
Gain on sale of discontinued operation		8,734			3,545
Net income		12,724			8,079
Net income attributable to noncontrolling interest in subsidiaries		(507	)		(493	)
Net income attributable to common equity	$	12,217		$	7,586
Earnings per share - basic and diluted:
Continuing operations	$	0.50		$	0.47
Discontinued operations		1.27			0.62
Net income attributable to common equity	$	1.77		$	1.09
Weighted average shares outstanding - basic and diluted		6,908			6,942

The pro forma results reflect the following adjustments: (a) additional depreciation expense based on the purchase price allocated to the buildings and a depreciable life of 40 years (b) additional interest expense based on the $10 million loan used towards the purchase of the property at acquisition date and (c) exclusion of the $648,000 of non-recurring acquisition expenses in 2014 related to the Regency purchase.

The pro forma results of operations set forth above are not necessarily indicative of the results that would have occurred had the acquisition been made at the beginning of fiscal 2013, or of future results of operations of FREIT's combined properties.