Segment information

12 Months Ended

Oct. 31, 2019

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 year ended October 31, 2019, the commercial segment is comprised of eight (8) properties, excluding the land and building formerly occupied as a Pathmark supermarket in Patchogue, New York, which was sold on February 8, 2019 (see Note 2 to FREIT’s consolidated financial statements). During the fiscal years ended October 31, 2018 and 2017, the commercial segment is comprised of nine (9) properties. The residential segment is comprised of eight (8) properties during the fiscal years ended October 31, 2019 and 2018. 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 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, 2019. Asset information is not reported since FREIT does not use this measure to assess performance.

	Years Ended October 31,
	2019			2018			2017
	(In Thousands of Dollars)
Real estate rental revenue:
Commercial	$	26,692		$	25,464		$	24,114
Residential		33,175			31,928			26,886
Total real estate rental revenue		59,867			57,392			51,000
Real estate operating expenses:
Commercial		11,694			11,861			11,791
Residential		14,368			13,022			14,442
Total real estate operating expenses		26,062			24,883			26,233
Net operating income:
Commercial		14,998			13,603			12,323
Residential		18,807			18,906			12,444
Total net operating income	$	33,805		$	32,509		$	24,767
Recurring capital improvements - residential	$	(685	)	$	(738	)	$	(798	)
Reconciliation to consolidated net income attributable to common equity:
Segment NOI	$	33,805		$	32,509		$	24,767
Gain on sale of property		836			—			15,395
Loan prepayment costs relating to property sale		—			—			(1,139	)
Deferred rents - straight lining		410			605			634
Lease termination fee		—			—			(620	)
Investment income		360			267			206
Unrealized (loss) gain on interest rate cap contract		(160	)		72			—
General and administrative expenses		(4,049	)		(2,305	)		(2,129	)
Depreciation		(11,339	)		(11,515	)		(10,669	)
Financing costs		(18,070	)		(18,667	)		(15,762	)
Net income		1,793			966			10,683
Net (income) loss attributable to  noncontrolling interests		(6	)		517			2,433
Net income attributable to common equity	$	1,787		$	1,483		$	13,116