On February 28, 2020, FREIT reorganized its subsidiary S and A Commercial Associates Limited Partnership (“S&A”) from a partnership into a tenancy-in-common form of ownership (“TIC”). Prior to this reorganization, FREIT owned a 65% membership interest in S&A, which owned 100% of the Pierre Towers property located in Hackensack, New Jersey through its 100% interest in Pierre Towers, LLC. Pursuant to the TIC agreement, FREIT ultimately acquired a 65% undivided interest in the Pierre Towers property which was formerly owned by S&A. Based on the guidance of Accounting Standards Codification 810, “Consolidation”, FREIT’s investment in the TIC is accounted for under the equity method of accounting. While FREIT’s effective ownership percentage interest in the Pierre Towers property remained unchanged after the reorganization to a TIC, FREIT no longer had a controlling interest as the TIC is now under joint control.

FREIT’s investment in the TIC was approximately $18.9 million and $19.4 million at April 30, 2022 and October 31, 2021, respectively. For the six and three months ended April 30, 2022, FREIT recognized a loss on investment in TIC of approximately $156,000 and $32,000, in the accompanying condensed consolidated statements of operations. For the six and three months ended April 30, 2021, FREIT recognized a loss on investment in TIC of approximately $145,000 and $118,000, respectively, in the accompanying condensed consolidated statements of operations.

Hekemian & Co., Inc. (“Hekemian & Co.”) manages the Pierre Towers property based on a management agreement between the owners of the TIC and Hekemian & Co. dated as of February 28, 2020 and will expire on February 28, 2023. The management agreement is for a term of one year and is automatically renewed for successive periods of one year unless either party gives not less than sixty (60) days prior notice of non-renewal. The management agreement requires the payment of management fees equal to 5% of rents collected. Management fees charged to operations were approximately $197,000 and $99,000 for the six and three months ended April 30, 2022, respectively, and $187,000 and $95,000 for the six and three months ended April 30, 2021, respectively. The Pierre Towers property also uses the resources of the Hekemian & Co. insurance department to secure various insurance coverages for its property. Hekemian & Co. is paid a commission for these services. Such commissions were charged to operations and amounted to approximately $0 for the six and three months ended April 30, 2022 and $10,000 and $0 for the six and three months ended April 30, 2021, respectively.

Page 11

The following table summarizes the balance sheets of the Pierre Towers property as of April 30, 2022 and October 31, 2021, accounted for by the equity method:

		April 30,		October 31,
		2022		2021
		(In Thousands of Dollars)

Real estate, net	$	77,020	$	78,023
Cash and cash equivalents		1,430		1,338
Tenants' security accounts		457		484
Receivables and other assets		527		510
Total assets	$	79,434	$	80,355

Mortgages payable, net of unamortized debt issuance costs	$	49,558	$	49,691
Accounts payable and accrued expenses		247		261
Tenants' security deposits		466		484
Deferred revenue		132		99
Equity		29,031		29,820
Total liabilities & equity	$	79,434	$	80,355

FREIT's investment in TIC (65% interest)	$	18,870	$	19,383

The following table summarizes the statements of operations of the Pierre Towers property for the six and three months ended April 30, 2022 and 2021, accounted for by the equity method:

		Six Months Ended April 30,					Three Months Ended April 30,
		2022			2021		2022			2021
		(In Thousands of Dollars)					(In Thousands of Dollars)

Revenue	$	3,923		$	3,774		$	1,969		$	1,883
Operating expenses		2,275			2,114			1,074			1,123
Depreciation		1,087			1,081			545			541
Operating income		561			579			350			219

Interest expense including amortization of deferred financing costs		801			802			400			401

Net loss	$	(240	)	$	(223	)	$	(50	)	$	(182	)

FREIT's loss on investment in TIC (65% interest)	$	(156	)	$	(145	)	$	(32	)	$	(118	)