Segment information

12 Months Ended

Oct. 31, 2022

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 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 five (5) properties, excluding the Rotunda Property, the Westridge Square Property and the Damascus Property sold in Fiscal 2022 (see Note 2), during the fiscal year ended October 31, 2022. The commercial segment is comprised of eight (8) properties during the fiscal years ended October 31, 2021 and 2020. The residential segment is comprised of six (6) properties, excluding the Icon at the Rotunda Property sold in Fiscal 2022 (see Note 2), during the fiscal year ended October 31, 2022. The residential segment is comprised of seven (7) properties, excluding the Pierre Towers property which was converted into a TIC and deconsolidated from FREIT’s operating results as of February 28, 2020 (see Note 3), during the fiscal years ended October 31, 2021 and 2020.

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's commercial segment, residential segment and corporate/other is comprised of FREIT’s Board.

FREIT, 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, 2022. Asset information is not reported since FREIT does not use this measure to assess performance.

	Years Ended October 31,
	2022			2021			2020
	(In Thousands of Dollars)
Real estate rental revenue:
Commercial	$	10,626		$	23,547		$	24,486
Residential		20,627			26,974			28,638
Total real estate rental revenue		31,253			50,521			53,124
Real estate operating expenses:
Commercial		6,427			11,223			11,334
Residential		8,854			11,071			11,588
Total real estate operating expenses		15,281			22,294			22,922
Net operating income:
Commercial		4,199			12,324			13,152
Residential		11,773			15,903			17,050
Total net operating income	$	15,972		$	28,227		$	30,202
Recurring capital improvements - residential	$	(1,034	)	$	(625	)	$	(347	)
Reconciliation to consolidated net income attributable to common equity:
Segment NOI	$	15,972		$	28,227		$	30,202
Deferred rents - straight lining		18			(230	)		(397	)
Investment income		358			116			204
Third party transaction costs		—			—			(4,606	)
Net gain on sale of Maryland properties		68,771			—			—
Net realized gain on Wayne PSC interest rate swap termination		1,415			—			—
Gain on deconsolidation of subsidiary		—			—			27,680
Loss on investment in tenancy-in-common		(228	)		(295	)		(202	)
General and administrative expenses		(5,003	)		(5,195	)		(3,821	)
Depreciation		(3,995	)		(9,300	)		(10,341	)
Tenant improvement write-off due to COVID-19		—			—			(7,277	)
Financing costs		(8,064	)		(12,276	)		(14,122	)
Net income		69,244			1,047			17,320
Net (income) loss attributable to  noncontrolling interests in subsidiaries		(23,252	)		(120	)		3,233
Net income attributable to common equity	$	45,992		$	927		$	20,553