FREIT Announces Second Quarter 2024 Results
First Real Estate Investment Trust of New Jersey (FREIT) reported its unaudited operating results for the second quarter ending April 30, 2024. Total real estate revenue increased by 5.2% year-over-year to approximately $7.3 million, driven primarily by higher base rents in the residential segment. Net income rose to $533,000, or $0.07 per share, compared to $97,000, or $0.01 per share, in the same period of the previous year.
For the first six months of fiscal 2024, revenue increased by 2.7% to $14.3 million. However, net income for this period sharply declined to $21,000 from $516,000, mainly due to a significant rise of $1 million in general and administrative expenses. Residential occupancy averaged 95.9%, while commercial occupancy dropped to 50.4%. The Board declared a dividend of $0.05 per share.
- Total real estate revenue increased by 5.2% to $7.3 million in Q2 2024.
- Net income increased to $533,000 or $0.07 per share in Q2 2024.
- Revenue from residential properties increased by $341,000 in Q2 2024.
- Residential NOI increased to $2.9 million in Q2 2024.
- FREIT secured a loan extension for three years with a fixed interest rate of 6.75%.
- Commercial occupancy dropped significantly to 50.4% in Q2 2024 from 64.8%.
- Net income for the first six months of 2024 declined sharply to $21,000 from $516,000.
- General and administrative expenses increased by $1 million in the first six months of 2024.
- Revenue from commercial properties decreased by $256,000 in the first six months of 2024.
- AFFO per share decreased to $0.24 for the first six months of 2024 from $0.30.
FINANCIAL HIGHLIGHTS & OPERATING STATISTICS | |||||
For the Fiscal Quarter Ended | For the Six Months Ended | ||||
April 30, | April 30, | ||||
2024 | 2023 | 2024 | 2023 | ||
GAAP Earnings Per Share - Basic and Diluted | |||||
AFFO Per Share - Basic and Diluted | |||||
Dividends Per Share | |||||
Total Average Residential Occupancy | 96.5 % | 97.5 % | 95.9 % | 97.2 % | |
Total Average Commercial Occupancy | 50.7 % | 64.8 % | 50.4 % | 65.6 % |
Results for the Quarter
Total real estate revenue increased
Net income attributable to common equity ("Net Income") was approximately
(Refer to "Table of Revenue & Net Income Components")
Results for Six Months
Total real estate revenue increased
Net Income was approximately
(Refer to "Table of Revenue & Net Income Components")
Table of Revenue & Net Income Components | ||||||||||||
For the Fiscal Quarter Ended April 30, | For the Six Months Ended April 30, | |||||||||||
2024 | 2023 | Change | 2024 | 2023 | Change | |||||||
(In Thousands Except Per Share Amounts) | (In Thousands Except Per Share Amounts) | |||||||||||
Revenue: | ||||||||||||
Commercial properties | $ 18 | $ (256) | ||||||||||
Residential properties | 5,221 | 4,880 | 341 | 10,268 | 9,633 | 635 | ||||||
Total real estate revenues | 7,275 | 6,916 | 359 | 14,274 | 13,895 | 379 | ||||||
Operating expenses: | ||||||||||||
Real estate operating expenses | 3,539 | 3,438 | 101 | 7,048 | 6,825 | 223 | ||||||
General and administrative expenses | 1,015 | 975 | 40 | 2,823 | 1,802 | 1,021 | ||||||
Depreciation | 789 | 732 | 57 | 1,514 | 1,454 | 60 | ||||||
Total operating expenses | 5,343 | 5,145 | 198 | 11,385 | 10,081 | 1,304 | ||||||
Financing costs | (1,782) | (1,951) | 169 | (3,624) | (3,827) | 203 | ||||||
Investment income | 279 | 218 | 61 | 686 | 407 | 279 | ||||||
Gain (Loss) on investment in tenancy-in-common | 62 | (121) | 183 | (47) | (188) | 141 | ||||||
Net loss on sale of | (92) | (203) | 111 | (171) | (446) | 275 | ||||||
Net income (loss) | 399 | (286) | 685 | (267) | (240) | (27) | ||||||
Net loss attributable to noncontrolling interests in subsidiaries | 134 | 383 | (249) | 288 | 756 | (468) | ||||||
Net income attributable to common equity | $ 533 | $ 97 | $ 436 | $ 21 | $ 516 | $ (495) | ||||||
Earnings per share: | ||||||||||||
Basic and diluted | $ 0.07 | $ 0.01 | $ 0.06 | $ 0.00 | $ 0.07 | |||||||
Weighted average shares outstanding: | ||||||||||||
Basic | 7,453 | 7,441 | 7,451 | 7,433 | ||||||||
Diluted | 7,457 | 7,446 | 7,455 | 7,440 |
Segment Property Net Operating Income ("NOI")
NOI for the residential properties increased modestly to approximately
Financing Update
On December 1, 2023, the mortgage secured by an apartment building located in
Dividend
The Board of Directors of FREIT declared a second quarter dividend of
Adjusted Funds From Operations
Funds From Operations ("FFO") is a non-GAAP measure defined by the National Association of Real Estate Investment Trusts ("NAREIT"). FREIT does not include distributions from equity/debt/capital gain sources in its computation of FFO. Although many consider FFO as the standard measurement of a REIT's performance, FREIT modified the NAREIT computation of FFO to include other adjustments to GAAP net income, which are not considered by management to be the primary drivers of its decision making process. These adjustments to GAAP net income are straight-line rents and recurring capital improvements on FREIT's residential apartments.
The modified FFO computation is referred to as Adjusted Funds From Operations ("AFFO"). FREIT believes that AFFO is a superior measure of its operating performance. FREIT computes FFO and AFFO as follows:
For the Fiscal Quarter Ended April 30, | For the Six Months Ended April 30, | ||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||
(In Thousands Except Per Share Amounts) | (In Thousands Except Per Share Amounts) | ||||||||||
Funds From Operations ("FFO") (a) | |||||||||||
Net income (loss) | $ 399 | $ (286) | $ (267) | $ (240) | |||||||
Depreciation of consolidated properties | 789 | 732 | 1,514 | 1,454 | |||||||
Amortization of deferred leasing costs | 38 | 21 | 64 | 40 | |||||||
Distributions to non-controlling interests | - | (b) | - | (c) | (180) | (b) | - | (c) | |||
Net loss on sale of | 92 | 203 | 171 | 446 | |||||||
Adjustment to loss on investment in tenancy-in-common for depreciation | 363 | 358 | 725 | 716 | |||||||
FFO | |||||||||||
Per Share - Basic | |||||||||||
Per Share - Diluted | |||||||||||
(a) As prescribed by NAREIT. | |||||||||||
(b) FFO excludes the additional distribution of proceeds to non-controlling interests in the amount of approximately | |||||||||||
(c) FFO excludes the additional distribution of proceeds to non-controlling interests in the amount of approximately | |||||||||||
Adjusted Funds From Operations ("AFFO") | |||||||||||
FFO | |||||||||||
Deferred rents (Straight lining) | 29 | 48 | 58 | 76 | |||||||
Capital Improvements - Apartments | (169) | (145) | (265) | (290) | |||||||
AFFO | $ 931 | ||||||||||
Per Share - Basic and Diluted | |||||||||||
Weighted Average Shares Outstanding: | |||||||||||
Basic | 7,453 | 7,441 | 7,451 | 7,433 | |||||||
Diluted | 7,457 | 7,446 | 7,455 | 7,440 |
FFO and AFFO do not represent cash generated from operating activities in accordance with accounting principles generally accepted in
The statements in this report, which relate to future earnings or performance, are forward-looking. Actual results may differ materially and be adversely affected by such factors as market and economic conditions, longer than anticipated lease-up periods or the inability of certain tenants to pay rents. Additional information about these factors is contained in the Company's filings with the SEC including the Company's most recent filed reports on Form 10-K and Form 10-Q.
First Real Estate Investment Trust of New Jersey, Inc. is a publicly traded (over-the-counter – symbol FREVS) REIT organized in 1961. Its portfolio of residential and commercial properties are located in
Visit us on the web: www.freitnj.com
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SOURCE First Real Estate Investment Trust of New Jersey
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