Segment information

12 Months Ended

Oct. 31, 2021

Segment Reporting [Abstract]

Segment information

Note 13 - Segment information:

ASC 280-10, "Disclosures about Segments of an Enterprise and Related Information", establishes 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 Maryland 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.

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), during the fiscal years ended October 31, 2021, 2020 and 2019. The residential segment is comprised of seven (7) properties, excluding the Pierre Towers property which was converted into a tenancy-in-common and deconsolidated from FREIT Maryland’s operating results as of February 28, 2020 (see Note 3), during the fiscal years ended October 31, 2021 and 2020. The residential segment was comprised of eight (8) properties during the fiscal year ended October 31, 2019.

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

FREIT Maryland through its chief operating and decision making group, 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 GAAP, 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, 2021. Asset information is not reported since FREIT Maryland does not use this measure to assess performance.

89

	Years Ended October 31,
	2021		2020		2019
	(In Thousands of Dollars)
Real estate rental revenue:
Commercial	$	23,547	$	24,486	$	26,692
Residential		26,974		28,638		33,175
Total real estate rental revenue		50,521		53,124		59,867
Real estate operating expenses:
Commercial		11,223		11,334		11,694
Residential		11,071		11,588		14,368
Total real estate operating expenses		22,294		22,922		26,062
Net operating income:
Commercial		12,324		13,152		14,998
Residential		15,903		17,050		18,807
Total net operating income	$	28,227	$	30,202	$	33,805

Recurring capital improvements - residential $ (625 ) $ (347 ) $ (685 )

Reconciliation to consolidated net income attributable to common equity:
Segment NOI	$	28,227		$	30,202		$	33,805
Deferred rents - straight lining		(230	)		(397	)		410
Investment income		116			204			360
Unrealized loss on interest rate cap contract		-			-			(160	)
Third party transaction costs		-			(4,606	)		(1,416	)
Gain on sale of property		-			-			836
Gain on deconsolidation of subsidiary		-			27,680			-
Loss on investment in tenancy-in-common		(295	)		(202	)		-
General and administrative expenses		(5,195	)		(3,821	)		(2,633	)
Depreciation		(9,300	)		(10,341	)		(11,339	)
Tenant improvement write-off due to COVID-19		-			(7,277	)		-
Financing costs		(12,276	)		(14,122	)		(18,070	)
Net income		1,047			17,320			1,793
Net (income) loss attributable to noncontrolling interests in subsidiaries		(120	)		3,233			(6	)
Net income attributable to common equity	$	927		$	20,553		$	1,787