Segment information

12 Months Ended

Oct. 31, 2018

Segment Reporting [Abstract]

Segment information

Note 14 - 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, 2018, 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 residential segment is comprised of eight (8) properties during the fiscal year ended October 31, 2018, which is inclusive of the property acquired in Fiscal 2018 (Station Place). 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 accounting policies of the segments are the same as those described in Note 1. The chief operating and 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 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, 2018. Asset information is not reported since FREIT does not use this measure to assess performance.

	Years Ended October 31,
	2018			2017			2016
	(In Thousands of Dollars)
Real estate rental revenue:
Commercial	$	25,464		$	24,114		$	22,694
Residential		31,928			26,886			22,952
Total real estate rental revenue		57,392			51,000			45,646
Real estate operating expenses:
Commercial		11,861			11,791			10,661
Residential		13,022			14,442			11,136
Total real estate operating expenses		24,883			26,233			21,797
Net operating income:
Commercial		13,603			12,323			12,033
Residential		18,906			12,444			11,816
Total net operating income	$	32,509		$	24,767		$	23,849
Recurring capital improvements - residential	$	(738	)	$	(798	)	$	(898	)
Reconciliation to consolidated net income attributable to common equity:
Segment NOI	$	32,509		$	24,767		$	23,849
Gain on sale of property		—			15,395			314
Loan prepayment costs relating to property sale		—			(1,139	)		—
Deferred rents - straight lining		605			634			608
Lease termination fee		—			(620	)		—
Investment income		267			206			150
Unrealized gain on interest rate cap contract		72			—			—
General and administrative expenses		(2,305	)		(2,129	)		(2,034	)
Depreciation		(11,515	)		(10,669	)		(7,852	)
Financing costs		(18,667	)		(15,762	)		(11,936	)
Net income		966			10,683			3,099
Net (income) loss attributable to  noncontrolling interests		517			2,433			(94	)
Net income attributable to common equity	$	1,483		$	13,116		$	3,005