Segment information

12 Months Ended

Oct. 31, 2017

Segment Reporting [Abstract]

Segment information

Note 13- Segment information:

ASC 280-10, "Disclosures about Segments of an Enterprise and Related Information", established standards for reporting financial information about operating segments in interim and annual financial reports and provides for a "management approach" in identifying the reportable segments.

FREIT has determined that it has two reportable segments: commercial properties and residential properties. These reportable segments offer different types of space, have different types of tenants, and are managed separately because each requires different operating strategies and management expertise.

During the fiscal years ended October 31, 2017 and 2016, the commercial segment is comprised of nine (9) properties after giving effect to the sale of a property on June 17, 2016 (See Note 2 to FREIT’s consolidated financial statements). The commercial segment is comprised of ten (10) properties during the fiscal year ended October 31, 2015. The residential segment is comprised of seven (7) properties after giving effect to the sale of a property on June 12, 2017 (See Note 2 to FREIT’s consolidated financial statements) during the fiscal year ended October 31, 2017. The residential segment is comprised of eight (8) properties during the fiscal year ended October 31, 2016, which includes the 379-unit apartment complex constructed as part of the redevelopment and expansion project at the Rotunda which was completed in the third quarter of Fiscal 2016. The residential segment is comprised of seven (7) properties during the fiscal year ended October 31, 2015.

The accounting policies of the segments are the same as those described in Note 1. The chief operating decision-making group of FREIT's commercial segment, residential segment and corporate/other is comprised of FREIT’s Board of Trustees.

FREIT assesses and measures segment operating results based on net operating income ("NOI"). NOI, a standard used by real estate professionals, is based on operating revenue and expenses directly associated with the operations of the real estate properties, but excludes: deferred rents (straight lining), depreciation, financing costs, amortization of acquired lease values and other items. NOI is not a measure of operating results or cash flows from operating activities as measured by accounting principles generally accepted in the United States of America, 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.

Real estate rental revenue, operating expenses, NOI and recurring capital improvements for the reportable segments are summarized below and reconciled to consolidated net income attributable to common equity for each of the years in the three-year period ended October 31, 2017. Asset information is not reported since FREIT does not use this measure to assess performance.

	Years Ended October 31,
	2017			2016			2015
	(In Thousands of Dollars)
Real estate rental revenue:
Commercial	$	24,114		$	22,694		$	23,037
Residential		26,886			22,952			21,966
Total real estate rental revenue		51,000			45,646			45,003
Real estate operating expenses:
Commercial		11,791			10,661			10,436
Residential		14,442			11,136			10,626
Total real estate operating expenses		26,233			21,797			21,062
Net operating income:
Commercial		12,323			12,033			12,601
Residential		12,444			11,816			11,340
Total net operating income	$	24,767		$	23,849		$	23,941
Recurring capital improvements - residential	$	(798	)	$	(898	)	$	(424	)
Reconciliation to consolidated net income attributable to common equity:
Segment NOI	$	24,767		$	23,849		$	23,941
Gain on sale of property		15,395			314			—
Loan prepayment costs relating to property sale		(1,139	)		—			—
Lease termination fee		(620	)		—			—
Deferred rents - straight lining		634			608			(219	)
Amortization of acquired leases		—			—			(1	)
Investment income		206			150			150
General and administrative expenses		(2,129	)		(2,034	)		(2,029	)
Straight line rent adjustment - bankrupt tenant		—			—			(1,046	)
Depreciation		(10,669	)		(7,852	)		(6,883	)
Financing costs		(15,762	)		(11,936	)		(11,001	)
Net income		10,683			3,099			2,912
Net (income) loss attributable to  noncontrolling interests		2,433			(94	)		(281	)
Net income attributable to common equity	$	13,116		$	3,005		$	2,631