First Real Estate Investment Trust of New Jersey Reports 2.2% Revenue Growth, Decline in Net Income

First Real Estate Investment Trust of New Jersey, Inc. (FREIT) reported a modest increase in revenue for the fiscal year ending October 31, 2025, with total real estate revenues rising to $29.3 million, a 2.2% increase from $28.7 million in the previous year. The growth was primarily driven by the residential segment, which saw revenues increase by approximately $900,000 due to higher base rents and a slight uptick in occupancy rates, from 96.1% to 96.6%. However, the commercial segment experienced a decline in revenue of about $250,000, attributed to lower occupancy rates at key properties such as the Preakness and Westwood Plaza shopping centers.

FREIT's net income attributable to common equity for the fiscal year was $3.5 million, or $0.47 per share, a significant decrease from $15.9 million, or $2.13 per share, in the prior year. This decline was influenced by a reduction in net operating income from commercial properties, which fell by 17% due to increased vacancy rates and rising operational costs. The company also faced a decrease in investment income and a notable absence of one-time gains that had positively impacted the previous fiscal year.

Strategically, FREIT has been active in managing its debt obligations. The company successfully extended the maturity of its loan secured by the Westwood Plaza shopping center to February 1, 2025, and subsequently modified the terms to reduce the outstanding balance from approximately $16.5 million to $10 million, resulting in annual debt service savings of about $705,000. Additionally, FREIT entered into loan extension agreements for other properties, including a three-year extension for a loan on an apartment building in Middletown, New York.

Operationally, FREIT's portfolio consists of six multi-family apartment buildings totaling 792 units and five commercial properties with approximately 589,000 square feet of leasable space. The company reported an average occupancy rate of 96.6% for its residential properties, while commercial properties averaged a lower occupancy rate of 54.5%. The company continues to evaluate potential acquisitions and redevelopment opportunities to enhance its portfolio and increase revenue streams.

Looking ahead, FREIT anticipates that cash generated from operations and existing cash reserves will be sufficient to meet its financial obligations over the next year. However, the company remains cautious about the potential impacts of rising interest rates and economic conditions on its operations and tenant performance. The management team is focused on attracting quality tenants to its commercial properties and exploring redevelopment options to improve occupancy and revenue generation.