Property held for sale

6 Months Ended

Apr. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

Property held for sale

Note 5 – Property held for sale:

On January 11, 2016, FREIT was notified by Lakeland Bank (as successor by merger to Pascack Community Bank) of its election and exercise of the option to purchase the property leased by FREIT to Lakeland Bank located in Rochelle Park, New Jersey having a carrying amount of approximately $2.7 million (including a straight-line rent receivable in the amount of approximately $0.5 million) both at April 30, 2016 and October 31, 2015. Pursuant to the Lease Agreement, Lakeland Bank has the right to exercise this option at a price equal to the greater of $3 million or the fair market value of the property as determined by mutual agreement between tenant and landlord. FREIT and Lakeland Bank have agreed to set the purchase price at $3.1 million. FREIT’s gain from the sale of this property net of closing costs is expected to be approximately $260,000. FREIT anticipates closing on the sale of this property in the third quarter 2016. The sale will result in FREIT’s loss of annual rents of approximately $241,000, which increases periodically through September 2023. As the disposal of this property will not represent a strategic shift that will have a major impact on FREIT’s operations or financial results, the property’s operations are not reflected as discontinued operations in the accompanying financial statements.