FREVS First Real Estate Investment Trust of New Jersey Inc (PK)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

CURRENT REPORT

 

Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

December 11, 2015

FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY

(Exact name of registrant as specified in charter)

New Jersey	000-25043	22-1697095
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

 

505 Main Street, Hackensack, New Jersey	07601
(Address of principal executive offices)	(Zip Code)

 

Registrant’s telephone number, including area code: (201) 488-6400

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o

Pre-commencement communications pursuant to Rule 14d-2 (b) under the Exchange Act (17 CFR 240.14d-2(b))

o

Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4 (c))

 

Item 2.02 Results of Operations and Financial Condition

 

OPERATING RESULTS

 

The registrant has released its operating results for the year and quarter ended October 31, 2015. The Press Release is included as Exhibit 99.1 to this Form 8-K.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

99.1 Registrant’s press release dated December 11, 2015

 

 

 

The statements in this report that relate to future earnings or performance are forward-looking. Actual results might differ materially and be adversely affected by such factors as longer than anticipated lease-up periods or the inability of tenants to pay increased rents. Additional information about these factors is contained in the Trust’s filings with the SEC including the Trust’s most recently filed reports on Form 10-K and Form 10-Q.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
	(Registrant)
	By:	/s/ Robert S. Hekemian
		Robert S. Hekemian
		Chairman of the Board

Date: December 11, 2015

 

 

EXHIBIT INDEX

 

Exhibit
Number	Description
99.1	Press Release – Operating results for the year and quarter ended October 31, 2015.

 

 

 

 

 

 

HACKENSACK, NJ, December 11, 2015 – First Real Estate Investment Trust of New Jersey (“FREIT”) reported its operating results for the year and quarter ended October 31, 2015. The results of operations as presented in this earnings release are unaudited, and are not necessarily indicative of future operating results.

 

FINANCIAL HIGHLIGHTS & OPERATING STATISTICS   ($ in thousands, except per share amounts)				Year Ended October 31,		Quarter Ended October 31,
				2015	2014	2015	2014
*  Net Income Per Share-Basic & Diluted				$0.39	$1.69	$0.02	$0.10
*  Dividends Per Share				$1.20	$1.20	$0.30	$0.30
*  AFFO Per Share-Basic & Diluted				$1.53	$1.40	$0.42	$0.35
*  AFFO Payout				78.4%	85.7%	71.4%	85.7%
*  NOI				$23,941	$23,423	$5,995	$5,734
*  Average Residential Occupancy				94.8%	95.4%	95.4%	96.4%
*  Average Commercial Occupancy  (a)				84.3%	82.3%	85.9%	81.4%
(a) Includes occupancy for the Rotunda shopping center, which is undergoing a major redevelopment project. Also includes occupancy of Damascus shopping center, which completed a major redevelopment project and is 84.9% leased and 80.2% occupied as of October 31, 2015.

 

RESULTS OF OPERATIONS

 

Year-To-Date (“YTD”) Results (Per share represents basic and diluted share amounts)

·

Funds From Operations (“FFO”) was $9.5 million, or $1.41 per share, as compared to $9.2 million, or $1.33 per share, for the prior year’s comparable period.

·

Adjusted Funds From Operations (“AFFO”) modifies FFO for unique revenue and expense items, which the Company believes are germane to the measurement of the Company’s ongoing operating performance, such as: capital improvements, deferred rents, and acquisition expenses. AFFO was $10.4 million, or $1.53 per share, as compared to $9.7 million, or $1.40 per share, for the prior year’s comparable period.

·

Net income attributable to common equity (“net income”) was $2.6 million, or $0.39 per share, compared to $11.7 million, or $1.69 per share, for the prior year’s comparable period. Current YTD net income includes a $1.1M provision for loss related to the straight line rent receivable for Pathmark Stores, Inc. (“Pathmark”) located in Patchogue, NY resulting from the bankruptcy filing of the Great Atlantic and Pacific Tea Company and its affiliates, of which Pathmark is a subsidiary. Prior YTD net income includes an $8.7 million gain relating to the sale of FREIT’s South Brunswick, NJ property in December 2013.

 

Fourth Quarter Results (Per share represents basic and diluted share amounts)

·

FFO was $1.9 million, or $0.28 per share, as compared to $2.4 million, or $0.34 per share, for the prior year’s comparable period.

·

AFFO was $2.8 million, or $0.42 per share, as compared to $2.4 million, or $0.35 per share for the prior year’s comparable period.

·

Net income attributable to common equity was $0.1 million, or $0.02 per share, as compared to $0.6 million or $0.10 per share for the prior year’s comparable period. Current fourth quarter net income includes a $1.1M provision for loss related to the straight line rent receivable for Pathmark Stores, Inc. (“Pathmark”) located in Patchogue, NY resulting from the bankruptcy filing of the Great Atlantic and Pacific Tea Company and its affiliates, of which Pathmark is a subsidiary.

 

Table of Revenue & Net Income Components

 

		Year Ended October 31,												Quarter Ended October 31,
		2015				2014				Change				2015				2014				Change
		(in thousands, except per share)												(in thousands, except per share)
Revenues:
Commercial properties		$	22,817			$	22,310			$	507			$	5,598			$	5,619			$	(21	)
Residential properties			21,966				20,419				1,547				5,510				5,473				37
Total real estate revenues			44,783				42,729				2,054				11,108				11,092				16
Operating Expenses:
Real estate operations			21,062				19,420				1,642				5,113				5,333				(220	)
Straight line rent adjustment - bankrupt tenant (a)			1,046				—				1,046				1,046				—				1,046
General and administrative			2,029				1,396				633				376				174				202
Depreciation			6,883				6,346				537				1,898				1,692				206
Investment income			(150	)			(184	)			34				(37	)			(51	)			14
Financing costs			11,001				11,309				(308	)			2,631				2,875				(244	)
Net (income) loss attributable to noncontrolling interests in subsidiaries			(281	)			(507	)			226				2				(54	)			56
Adjusted income from operations			2,631				3,935				(1,304	)			83				1,015				(932	)
Acquisition costs - Regency			—				(648	)			648				—				—				—
G-Mart lease termination expenses			—				(371	)			371				—				(371	)			371
Income from discontinued operations			—				7				(7	)			—				—				—
Gain on sale of discontinued operations			—				8,734				(8,734	)			—				—				—
Net income attributable to common equity		$	2,631			$	11,657			$	(9,026	)		$	83			$	644			$	(561	)
Earnings per share - basic and diluted:
Income from continuing operations		$	0.39			$	0.42			$	(0.03	)		$	0.02			$	0.10			$	(0.08	)
Discontinued operations			—				1.27				(1.27	)			—				—				—
Net income attributable to common equity		$	0.39			$	1.69			$	(1.30	)		$	0.02			$	0.10			$	(0.08	)
Weighted average shares outstanding:
Basic and diluted			6,778				6,908								6,756				6,858

 

(a)	Expense for provision for loss related to straight line rent receivable for Pathmark at Patchogue, NY shopping center as a result of the bankruptcy filing of the Great Atlantic & Pacific Tea Company, Inc. ("A&P").  Pathmark is a subsidiary of A&P.

 

Dividends

The 4th quarter dividend of $0.30 per share will be paid on December 15, 2015 to shareholders of record on December 1, 2015. This resulted in an annual dividend of $1.20 per share for fiscal 2015.

 

Adjusted Funds From Operations

FFO is a non-GAAP measure defined by the National Association of Real Estate Investment Trusts (“NAREIT”). 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 that are not considered by management to be the primary drivers of their decision making process. These adjustments to GAAP net income are amortization of acquired leases, below market lease amortization, straight-line rents, acquisition expenses, FFO from discontinued operations and recurring capital improvements on our residential apartments.

 

The modified FFO computation is referred to as AFFO. FREIT believes that AFFO is useful to investors as a supplemental gauge of our operating performance. We compute FFO and AFFO as follows:

 

		Year Ended October 31,								Quarter Ended October 31,
		2015				2014				2015				2014
		(in thousands, except per share amounts)								(in thousands, except per share amounts)
Funds From Operations ("FFO") (a)
Net income		$	2,912			$	12,164			$	81			$	698
Depreciation of consolidated properties			6,883				6,346				1,898				1,692
Amortization of deferred leasing costs			260				391				27				170
Gain on sale of discontinued operation			—				(8,734	)			—				—
Distributions to minority interests			(516	)			(975	)			(90	)			(210	)
FFO		$	9,539			$	9,192			$	1,916			$	2,350
Per Share - Basic and Diluted		$	1.41			$	1.33			$	0.28			$	0.34
(a) As prescribed by NAREIT.
Adjusted Funds From Operations ("AFFO")
FFO		$	9,539			$	9,192			$	1,916			$	2,350
Amortization of acquired leases			1				21				—				5
Deferred rents (Straight lining)			219				391				—				268
Straight line rent adjustment - bankrupt tenant			1,046				—				1,046				—
Acquisition expenses - Regency apartments			—				648				—				—
Less: FFO from discontinued operations			—				(7	)			—				—
Capital Improvements - Apartments			(424	)			(549	)			(149	)			(198	)
AFFO		$	10,381			$	9,696			$	2,813			$	2,425
Per Share - Basic and Diluted		$	1.53			$	1.40			$	0.42			$	0.35
Weighted Average Shares Outstanding:
Basic and Diluted			6,778				6,908				6,756				6,858

 

 

FFO and AFFO do not represent cash generated from operating activities in accordance with accounting principles generally accepted in the United States of America, and therefore should not be considered a substitute for net income as a measure of results of operations or for cash flow from operations as a measure of liquidity. Additionally, the application and calculation of FFO and AFFO by certain other REITs may vary materially from that of FREIT’s, and therefore FREIT’s FFO and AFFO may not be directly comparable to that of other REITs.

 

 

The statements in this report that relate to future earnings or performance are forward-looking. Actual results might differ materially and be adversely affected by such factors as longer than anticipated lease-up periods or the inability of tenants to pay increased rents. Additional information about these factors is contained in the Trust’s filings with the SEC including the Trust’s most recent filed report on Form 10-K and Form 10-Q.

 

First Real Estate Investment Trust of New Jersey is a publicly traded (over-the-counter – symbol FREVS.) REIT organized in 1961. It has approximately $352 million (historical cost basis) of assets. Its portfolio of residential and commercial properties extends from Eastern L.I. to Maryland, with the largest concentration in Northern New Jersey.

For additional information contact Shareholder Relations at (201) 488-6400

Visit us on the web: www.freitnj.com