First Real Estate Investment Trust of New Jersey Inc: Q2 2025 Financial Results
On June 10, 2025, First Real Estate Investment Trust of New Jersey Inc (FREVS) released its 8-K filing, detailing the financial results for the fiscal quarter ended April 30, 2025. Operating within the U.S. real estate sector, FREVS focuses on investing in properties to provide regular income and capital appreciation to its shareholders. The company operates in two segments: commercial and residential properties, with the majority of its revenue derived from the residential segment.
Performance Overview and Challenges
For the fiscal quarter ending April 30, 2025, FREVS reported a slight decrease in total real estate revenue, which fell by 0.2% to approximately $7.258 million, down from $7.275 million in the prior year. This decline was primarily attributed to a $237,000 decrease in the commercial segment, largely due to TJ Maxx invoking a co-tenancy clause and a drop in average occupancy from 50.7% to 48.2%.
In contrast, the residential segment experienced a $220,000 increase in revenue, driven by higher base rents and improved occupancy rates, which rose from 96.5% to 97.1%. This mixed performance highlights the ongoing challenges in the commercial real estate market while showcasing the resilience of the residential sector.
Financial Achievements
FREVS achieved a notable increase in net income attributable to common equity, reaching approximately $894,000, or $0.12 per share, up from $533,000, or $0.07 per share in the previous year. This improvement was largely due to a $224,000 reduction in general and administrative expenses and the absence of a $92,000 loss on the sale of Maryland properties recorded in the prior year.
This financial turnaround underscores the effectiveness of the company’s cost management strategies and operational efficiencies.
Key Financial Metrics
For the six months ended April 30, 2025, total real estate revenue increased by 1.8% to approximately $14.527 million, compared to $14.274 million in the prior year. The residential segment contributed a $535,000 increase, while the commercial segment saw a $282,000 decrease.
Net income for the six months was approximately $1.508 million, or $0.20 per share, a significant rise from $21,000, or $0.00 per share in the previous year. This remarkable growth was driven by a $1.187 million reduction in general and administrative expenses.
Metric
Q2 2025
Q2 2024
Change
GAAP EPS
$0.12
$0.07
$0.05
AFFO Per Share
$0.23
$0.21
$0.02
Dividends Per Share
$0.08
$0.05
$0.03
Total Average Residential Occupancy
97.1%
96.5%
0.6%
Total Average Commercial Occupancy
48.2%
50.7%
-2.5%
Analysis of Financial Statements
The income statement reveals a modest increase in residential property net operating income (NOI) to approximately $3.258 million for the quarter, while commercial property NOI decreased to $563,000. The balance sheet highlights a strategic loan modification with Valley National Bank, reducing the loan balance to $10 million and extending the maturity date to May 1, 2026. This modification results in annual debt service savings of approximately $705,000, further enhancing the company’s financial stability.
Dividend and Funds From Operations
The Board of Directors declared a second-quarter dividend of $0.08 per share, reflecting a commitment to shareholder returns. The company’s Adjusted Funds From Operations (AFFO) per share increased to $0.23 from $0.21 in the prior year, underscoring improved operational performance. FREIT believes that AFFO is a superior measure of its operating performance, providing a clearer picture of the company’s financial health.
Conclusion
Overall, First Real Estate Investment Trust of New Jersey Inc (FREVS) demonstrated resilience in its residential segment, effectively offsetting challenges in the commercial sector. The company’s strategic financial management and focus on operational efficiency are pivotal in navigating the current market landscape.
For further details, explore the complete 8-K earnings release here.