SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended April 30, 1997 Commission File No. 2-48728
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
(exact name of registrant as specified in its charter)
New Jersey 22-1697095
- ------------------------------- -------------------
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
505 Main Street, P.O. Box 667, Hackensack, New Jersey 07602
-----------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 201-488-6400
- --------------------------------------------------------------------------------
Former name,former address and former fiscal year, if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports); and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ X ] No [ ]
<PAGE>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
INDEX
Part I: Financial Information
Item 1: Financial Statements
a.) Balance Sheets for April 30, 1997 and
October 31, 1996;
b.) Statements of Income and Undistributed
Earnings for Six and Three Months Ended
April 30, 1997 and 1996;
c.) Statements of Cash Flows for Six Months
Ended April 30, 1997 and 1996;
Item 2: Management's Discussion and Analysis of
Results of Operations and Financial Condition
Part II: Other Information
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
<TABLE>
<CAPTION>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
BALANCE SHEETS
APRIL 30, 1997 AND OCTOBER 31, 1996
(Unaudited)
April October
ASSETS 30, 1997 31, 1996
-------- --------
(In Thousands
of Dollars)
<S> <C> <C>
Real estate, at cost, net of accumulated
depreciation ................................... $47,990 $46,836
Equipment, at cost, net of accumulated
depreciation of $629,000 and $608,000 .......... 188 186
Investment in affiliate ............................ 1,921 1,924
Cash ............................................... 293 189
Tenants' security accounts ......................... 763 754
Sundry receivables ................................. 268 537
Prepaid expenses and other assets .................. 844 1,090
Deferred charges, net .............................. 341 158
------- -------
Totals ................................... $52,608 $51,674
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgages payable .............................. $23,335 $23,609
Note payable - bank ............................ 6,337 5,662
Accounts payable and accrued expenses .......... 1,216 278
Dividends payable .............................. 546 1,029
Tenants' security deposits ..................... 870 853
Deferred revenue ............................... 29 259
------- -------
Total liabilities ........................ 32,333 31,690
------- -------
Commitments and contingencies
Shareholders' equity:
Shares of beneficial interest without par
value; 1,560,000 shares authorized;
1,559,788 shares issued and outstanding ...... 19,314 19,314
Undistributed earnings ......................... 961 670
------- -------
Total shareholders' equity ............... 20,275 19,984
------- -------
Totals .................................. $52,608 $51,674
======= =======
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
STATEMENTS OF INCOME AND UNDISTRIBUTED EARNINGS
SIX AND THREE MONTHS ENDED APRIL 30, 1997 AND 1996
(Unaudited)
Six Months Three Months
Ended April 30, Ended April 30,
-------------------- --------------------
INCOME 1997 1996 1997 1996
------ ------- ------- ------- -------
(In Thousands of Dollars,
Except Per Share Amounts)
<S> <C> <C> <C> <C>
Rental revenue:
Rental income .................... $ 4,911 $ 4,788 $ 2,425 $ 2,370
Real estate taxes reimbursed ..... 518 558 256 166
Common area maintenance reimbursed 167 304 101 119
Sundry income .................... 81 96 41 57
------- ------- ------- -------
Totals ....................... 5,677 5,746 2,823 2,712
------- ------- ------- -------
Rental expenses:
Operating expenses ............... 1,200 1,337 600 695
Management fees .................. 248 242 127 124
Real estate taxes ................ 839 871 409 292
Interest ......................... 1,084 1,105 542 551
Depreciation ..................... 646 637 329 328
------- ------- ------- -------
Totals ....................... 4,017 4,192 2,007 1,990
------- ------- ------- -------
Income from rental operations ........ 1,660 1,554 816 722
------- ------- ------- -------
Other income (expense):
Equity in income of affiliate .... 77 24 46 5
Interest income .................. 2 5 1 1
Interest expense ................. (229) (227) (111) (116)
General and administrative ....... (121) (123) (76) (68)
------- ------- ------- -------
Totals ....................... (271) (321) (140) (178)
------- ------- ------- -------
Income before state income taxes ..... 1,389 1,233 676 544
Provision for state income taxes ..... 6 3
------- ------- ------- -------
Net income ........................... $ 1,383 $ 1,233 $ 673 $ 544
======= ======= ======= =======
Earnings per share ................... $ .89 $ .79 $ .43 $ .35
======= ======= ======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
STATEMENTS OF INCOME AND UNDISTRIBUTED EARNINGS
SIX AND THREE MONTHS ENDED APRIL 30, 1997 AND 1996
(Unaudited)
Six Months Three Months
Ended April 30, Ended April 30,
-------------------- --------------------
INCOME 1997 1996 1997 1996
------- ------- ------- -------
(In Thousands of Dollars,
Except Per Share Amounts)
<S> <C> <C> <C> <C>
UNDISTRIBUTED EARNINGS
Balance, beginning of period ......... $ 670 $ 675 $ 670 $ 818
Net income ........................... 1,383 1,233 673 544
Less dividends ....................... (1,092) (1,092) (546) (546)
------- ------- ------- -------
Balance, end of period ............... $ 961 $ 816 $ 797 $ 816
======= ======= ======= =======
Dividends per share .................. $ .70 $ .70 $ .35 $ .35
======= ======= ======= =======
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED APRIL 30, 1997 AND 1996
(Unaudited)
1997 1996
------- -------
(In Thousands
of Dollars)
<S> <C> <C>
Operating activities:
Net income .......................................... $ 1,383 $ 1,233
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization ................... 665 673
Deferred revenue ................................ (230) (120)
Equity in income of affiliate ................... (77) (24)
Changes in operating assets and liabilities:
Tenants' security accounts ................... (9) (26)
Sundry receivables, prepaid expenses and other
assets ...................................... 515 (132)
Deferred charges ............................. (202) 67
Accounts payable and accrued expenses ........ 82 (113)
Tenants' security deposits ................... 17 25
------- -------
Net cash provided by operating activities 2,144 1,583
------- -------
Investing activities:
Capital expenditures ................................ (946) (494)
Distributions from affiliate ........................ 80 40
------- -------
Net cash used in investing activities .... (866) (454)
------- -------
Financing activities:
Dividends paid ...................................... (1,575) (1,700)
Proceeds from note payable - bank ................... 675 651
Repayment of mortgages .............................. (274) (245)
------- -------
Net cash used in financing activities .... (1,174) (1,294)
------- -------
Net increase (decrease) in cash ......................... 104 (165)
Cash, beginning of period ............................... 189 465
------- -------
Cash, end of period ..................................... $ 293 $ (300)
======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED APRIL 30, 1997 AND 1996
(Unaudited)
(continued)
1997 1996
------- -------
(In Thousands
of Dollars)
<S> <C> <C>
Supplemental disclosure of cash flow data:
Interest paid ....................................... $ 1,091 $ 1,332
======= =======
Supplemental schedule of noncash investing and financing activities:
Dividends declared but not paid amounted to $546,000 at April 30, 1997 and 1996.
Capital expenditures incurred but not paid aggregated $856,000 at April 30,
1997.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
Note 1 - Organization and significant accounting policies:
Organization:
First Real Estate Investment Trust of New Jersey (the
"Trust") was organized November 1, 1961 as a New Jersey
Business Trust. The Trust is engaged in owning
residential and commercial income producing properties
located primarily in New Jersey.
The Trust has elected to be taxed as a Real Estate
Investment Trust under the provisions of Sections 856-860
of the Internal Revenue Code, as amended. Accordingly,
the Trust does not pay Federal income tax on income
whenever income distributed to shareholders is equal to
at least 95% of real estate investment trust taxable
income. Further, the Trust pays no Federal income tax on
capital gains distributed to shareholders.
The Trust is subject to Federal income tax on
undistributed taxable income and capital gains. The Trust
may make an annual election under Section 858 of the
Internal Revenue Code to apply part of the regular
dividends paid in each respective subsequent year as a
distribution for the immediately preceding year.
Basis of presentation:
The financial information included herein as at April 30,
1997 and for the six and three months ended April 30,
1997 and 1996 is unaudited and, in the opinion of the
Trust, reflects all adjustments (which include only
normal recurring accruals) necessary for a fair
presentation of the financial position as of that date
and the results of operations for those periods. The
information in the balance sheet as of October 31, 1996
was derived from the Trust's audited annual report for
1996.
Use of estimates:
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
Investment in Affiliate:
The Trust's 40% investment in Westwood Hills, LLC (the
"Affiliate") is accounted for using the equity method.
Cash:
The Trust maintains its cash in bank deposit accounts
which, at times, may exceed Federally insured limits. The
Trust considers all highly liquid debt instruments
purchased with a maturity of three months or less to be
cash equivalents. At April 30, 1997 and October 31, 1996,
the Trust had no cash equivalents.
<PAGE>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
Note 1 - Organization and significant accounting policies (continued):
Depreciation:
Real estate and equipment are depreciated on the
straight-line method by annual charges to operations
calculated to absorb costs of assets over their estimated
useful lives.
Revenue recognition:
Income from leases is recognized on a straight-line basis
regardless of when payment is due. Lease agreements
between the Trust and commercial tenants generally
provide for additional rentals based on such factors as
percentage of tenants' sales in excess of specified
volumes, increases in real estate taxes, Consumer Price
Indices and common area maintenance charges. These
additional rentals are generally included in income when
reported to the Trust, when billed to tenants or ratably
over the appropriate period.
Deferred charges:
Deferred charges consist of mortgage costs and leasing
commissions. Deferred mortgage costs are amortized on the
straight-line method by annual charges to operations over
the terms of the mortgages. Deferred leasing commissions
are amortized on the straight-line method over the terms
of the applicable leases.
Advertising:
The Trust expenses the cost of advertising and promotions
as incurred. Advertising costs charged to operations
amounted to approximately $16,000 and $30,000 for the six
months ended April 30, 1997 and 1996, respectively, and
approximately $11,000 and $18,000 for the three months
ended April 30, 1997 and 1996, respectively.
Earnings per share:
Earnings per share are computed based on the weighted
average number of shares outstanding. The weighted
average number of shares outstanding was 1,559,788 for
each of the six and three month periods ended April 30,
1997 and 1996.
Change in accounting policy:
The Trust has changed its method of accounting for its
investment in Affiliate. Previously, the accounts of the
Affiliate were combined with those of the Trust on the
basis of common control. However, in as much as the Trust
does not maintain unilateral control over the Affiliate,
the equity method of accounting for the investment is
deemed to be more appropriate. Accordingly, the
accompanying 1996 statements of income have been
restated. The effect of the restatement was to reduce
income from rental operations by $60,000 and $12,000 for
the six and three months ended April 30, 1996,
respectively. The restatement had no effect on
shareholders' equity, net income or earnings per share.
<PAGE>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
Note 2 - Investment in affiliate:
During May 1994, the Trust became a 40% member of the
Affiliate, a newly formed limited liability company that is
managed by Hekemian & Co., Inc. ("Hekemian"), a company
which manages all of the Trust's properties and in which one
of the trustees of the Trust is the chairman of the board.
Certain other members of the Affiliate are either trustees
of the Trust or their families or officers of Hekemian.
On June 2, 1994, the Affiliate consummated the purchase of
Westwood Properties, a residential apartment complex located
in Westwood, New Jersey.
Summarized financial information of the Affiliate as of
April 30, 1997 and October 31, 1996 and for the six and
three months ended April 30, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
April October
30, 1997 31, 1996
------- -------
(In Thousands
of Dollars)
<S> <C> <C>
Balance sheet data:
Assets:
Real estate and equipment, net ............ $14,801 $14,928
Other ..................................... 566 544
------- -------
Total assets ........................ $15,367 $15,472
======= =======
Liabilities and equity:
Liabilities:
Mortgage payable ........................ $10,270 $10,346
Other ................................... 294 314
------- -------
Totals .............................. 10,564 10,660
------- -------
Members' equity:
Trust ................................... 1,921 1,924
Others .................................. 2,882 2,888
------- -------
Totals .............................. 4,803 4,812
------- -------
Total liabilities and equity ........ $15,367 $15,472
======= =======
</TABLE>
<PAGE>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
Note 2 - Investment in affiliate (concluded):
<TABLE>
<CAPTION>
Six Months Three Months
Ended Ended
April 30, April 30,
------------------ ------------------
1997 1996 1997 1996
------ ------ ------ ------
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
Income statement data:
Rental revenue ............. $1,246 $1,156 $ 625 $ 580
Rental expenses ............ 1,055 1,096 514 568
------ ------ ------ ------
Net income ................. $ 191 $ 60 $ 111 $ 12
====== ====== ====== ======
</TABLE>
Note 3 - Real estate:
Real estate consists of the following:
<TABLE>
<CAPTION>
Range
of Estimated April October
Useful Lives 30, 1997 31, 1996
------------ -------- --------
(In Thousands
of Dollars)
<S> <C> <C> <C>
Land .............................. $17,782 $17,263
Unimproved land ................... 2,247 2,472
Apartment buildings ............... 7-40 years 10,533 10,170
Commercial buildings .............. 25-31.5 years 58 58
Shopping centers .................. 15-50 years 26,323 26,947
Construction in progress .......... 2,380 969
------- -------
59,323 57,879
Less accumulated de-
preciation ...................... 11,333 11,043
------- -------
Totals ........................ $47,990 $46,836
======= =======
</TABLE>
<PAGE>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
Note 4 - Mortgages payable:
Mortgages payable consist of the following:
<TABLE>
<CAPTION>
April October
30, 1997 31, 1996
(In Thousands
of Dollars)
<S> <C> <C>
State Mutual Life Insurance Co. (A) ............ $17,912 $18,068
Travelers Insurance (B) ........................ 5,252 5,319
Summit Bank (C) ................................ 171 222
------- -------
Totals ..................................... $23,335 $23,609
======= =======
</TABLE>
(A) Payable in monthly installments of $160,925
including interest at 9% through August 1997 at
which time the outstanding balance is due. The
mortgage is secured by a shopping center in
Frederick, Maryland having a net book value of
approximately $25,445,000.
(B) Payable in monthly installments of $55,287
including interest at 10% through September 2001
at which time the outstanding balance is due. The
mortgage is secured by a shopping center in
Westwood, New Jersey having a net book value of
approximately $11,774,000.
(C) Payable in monthly installments of $8,555
including interest at 7.625% through March 1999 at
which time the outstanding balance is due. The
mortgage is secured by an apartment building in
Spring Lake, New Jersey having a net book value of
approximately $581,000. One of the directors of
the bank is a trustee of the Trust.
Principal amounts (in thousands of dollars) due under the
above obligations in each of the five years subsequent to
April 30, 1997 are as follows:
Year Ending
April 30, Amount
--------- ------
1998 $18,150
1999 238
2000 177
2001 195
2002 69
Based on borrowing rates currently available to the Trust,
the carrying amount of mortgages payable approximates fair
value at April 30, 1997.
<PAGE>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
Note 5 - Note payable - bank:
Note payable - bank consists of borrowings under a
$20,000,000 revolving line of credit agreement with Summit
Bank which expires on June 30, 1997. The first $10,000,000
of borrowings under the line of credit bear interest at
either the prime rate or the LIBOR rate plus 200 basis
points. Any excess borrowings bear interest at either the
prime rate plus 1/2% or the LIBOR rate plus 250 basis
points. Outstanding borrowings are secured by all of the
Trust's properties except the shopping centers located in
Frederick, Maryland and Westwood, New Jersey and any vacant
land owned by the Trust.
Note 6 - Commitments and contingencies:
Leases:
Commercial tenants:
The Trust leases commercial space having a net book
value of approximately $41,047,000 at April 30, 1997
to tenants for periods of up to twenty years. Most of
the leases contain clauses for reimbursement of real
estate taxes, maintenance, insurance and certain
other operating expenses of the properties. Minimum
rental income (in thousands of dollars) to be
received from noncancelable operating leases in years
subsequent to April 30, 1997 are as follows:
Year Ending
April 30, Amount
--------- ------
1998 $ 3,967
1999 3,730
2000 3,236
2001 2,933
2002 2,616
Thereafter 11,960
-------
Total $28,442
=======
The above amounts assume that all leases which expire
are not renewed and, accordingly, neither minimal
rentals nor rentals from replacement tenants are
included. In addition, the above amounts do not
include any future minimum rentals to be received for
the shopping center in Franklin Lakes, New Jersey
having a net book value of approximately $2,928,000
at April 30, 1997. Management closed the shopping
center on September 1, 1995 except for one tenant who
vacated the premises on November 1, 1996.
Commencement of a complete refurbishing of the
premises is currently in progress and it is expected
to be open for operations in the Fall of 1997. The
cost of refurbishing is currently anticipated to
approximate $10,000,000.
<PAGE>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
NOTES TO FINANCIAL STATEMENTS
Note 6 - Commitments and contingencies (concluded):
Leases: (concluded):
Commercial tenants: (concluded):
Minimum future rentals do not include contingent
rentals which may be received under certain leases on
the basis of percentage of reported tenants' sales
volume or increases in Consumer Price Indices.
Contingent rentals included in income for each of the
six and three months ended April 30, 1997 and 1996
were not material.
Residential tenants:
Lease terms for residential tenants are usually one
year or less.
Acquisition:
The Trust has entered into a contract to purchase a
64,000 square foot shopping center to be constructed
in Patchogue, New York for approximately $11,400,000
including commissions and estimated professional
fees. The contract to purchase the Patchogue center
is contingent upon the construction being completed
during the Summer of 1997.
Standby letters of credit:
At April 30, 1997, the Trust is obligated under
irrevocable standby letters of credit of
approximately $1,550,000 in connection with certain
required land improvements at the Franklin Lakes
shopping center.
Note 7 - Management agreement:
The properties owned by the Trust are currently managed by
Hekemian. The management agreement requires fees equal to a
percentage of rents collected. Such fees were approximately
$248,000 and $242,000 for the six months ended April 30,
1997 and 1996, respectively, and approximately $127,000 and
$124,000 for the three months ended April 30, 1997 and 1996,
respectively.
Note 8 - Earnings per share:
Earnings per share, based on the weighted average number of
shares outstanding during each period, are comprised of
ordinary income.
* * *
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
The following discussion should be read in conjunction with
the attached financial statements and notes thereto, and the Registrant's
audited financial statements and notes thereto for Fiscal Year ended October 31,
1996.
Results of Operations
The earnings per share from the Registrant's regular
operations were $0.43 for the Second Quarter of 1997 as compared to $0.35 per
share for the Second Quarter of 1996. The increase in the earnings is due to
both an increase in rental income and a decrease in operating expenses which
allowed Registrant to absorb an increase in real property taxes. The increase in
rental income was realized despite the closing of Franklin Lakes Shopping Center
for the purpose of razing all present structures and to erect an enlarged
shopping center at the site.
Registrant experienced an increase in the earnings per share
for the first six months of 1997. The earnings per share were $0.89 in 1997 as
compared to $0.79 for the first six months of 1996. The increase in rental
income was coupled with a decrease in operating expenses during the first six
months of 1997 resulting in the improved earnings despite the closing of the
Franklin Lakes Shopping Center.
As described in the 8-K attached hereto as Item 6, the
Registrant has changed its method of accounting for its investment in the
Westwood Hills, L.L.C. Prior to the fiscal year 1997, the Registrant prepared
its Financial Statements on a consolidated basis. Since the Registrant does not,
however, maintain unilateral control over the Westwood Hills, L.L.C. it has been
determined that the equity method of accounting would be more appropriate. The
equity method was adopted retroactively. As a result, the 1996 financial
statements have been restated to reflect the foregoing accounting change. A
10K/A has been filed by the Registrant which reflects this change in the
accounting for Westwood Hills, L.L.C.
In addition, the Registrant will use the equity method of
accounting with respect to Westwood Hills, L.L.C. as of fiscal year 1997.
Financial Condition
The Registrant continues to generate cash sufficient to meet
all of its operational needs. Registrant does anticipate, however, that it will
borrow against its Line of Credit or secure one or more mortgages to generate
the funds required to construct the Center in Franklin Lakes and to purchase the
center in Patchogue, New York as hereinafter described in Item 5 hereof.
<PAGE>
PART II. Item 5. OTHER INFORMATION
A) Franklin Lakes Shopping Center, Franklin Lakes, New
Jersey
The Franklin Lakes Shopping Center is presently under
construction. Based upon the construction progress to
date, the Registrant anticipates that the 42,000
square foot food shopping center store will be turned
over to its tenant for fit up work on or about August
1, 1997. Under the terms of the Lease Agreement, the
rent for the food shopping center is due sixty (60)
days after the space is turned over to the tenant.
As a result, the Registrant expects to receive rent
for the food shopping center for approximately one
month during fiscal year 1997.
The balance of the shopping center, consisting of
approximately 46,000 square feet, will be completed
on or about January, 1998. The Registrant is in the
process of seeking tenants for this space.
B) Patchogue, New York
The Patchogue, New York shopping center was completed
during May, 1997. Under the purchase agreement with
the Registrant, the builder is responsible to
complete certain site work before Registrant is
required to close title. The builder has been
requested and is in the process of completing the
site work.
The food shopping market tenant has opened the store
for operations.
The Registrant anticipates that it will close title
to the Patchogue Shopping Center on or about July 15,
1997.
C) Line of Credit with Summit Bank
The Line of Credit with Summit Bank has been extended
through October 31, 1997. The Registrant and Summit
Bank are in the process of negotiating the formal
extension of the line of credit for a minimum period
of one (1) year.
D) Mortgage on the Westridge Square Shopping Center,
Frederick Maryland ("Westridge Shopping Center")
The Westridge Shopping Center is encumbered with a
mortgage with a current principal balance, as of June
1, 1997, of approximately $17,800,000. The mortgage
which was due June 1, 1997, has been extended to
August 1, 1997.
<PAGE>
The current mortgage holder has removed itself from
the market area and will not extend the mortgage
beyond August 1, 1997.
The Registrant has, therefore, secured a commitment
for a new mortgage from a third party lender. The new
mortgage will be in the amount of $19.2 million. The
term of the new mortgage is ten (10) years with a
twenty (20) year payout. The interest rate for the
new mortgage will be 8.31%. The current mortgage
bears an interest rate of 9% with a twenty-five (25)
year payout.
Because of the decrease in the payout period from
twenty-five (25) years to twenty (20) years, the
Registrant's payments of principal and interest will
increase from $160,924.00 under the present mortgage
to $164,320,00 under the new mortgage despite the
decrease in the interest rate.
Registrant expects to close the new mortgage on or
about July 15, 1997.
ITEM 6. Exhibits and Reports on Form 8-K
The Registrant filed the 8-K attached dated June 20,
1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
First Real Estate Investment
Trust of New Jersey
----------------------------
(Registrant)
DATED: July 3, 1997
/s/William R. DeLorenzo, Jr.
----------------------------
(Signature)*
William R. DeLorenzo, Jr.
Executive Secretary and Treasurer
- --------------------------------------------------------------------------------
*Print name and title of the signing officer under his signature
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> APR-30-1997
<CASH> 293,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 60,140,000
<DEPRECIATION> (11,962,000)
<TOTAL-ASSETS> 52,608,000
<CURRENT-LIABILITIES> 0
<BONDS> 23,335,000
0
0
<COMMON> 19,314,000
<OTHER-SE> 961,000
<TOTAL-LIABILITY-AND-EQUITY> 52,608,000
<SALES> 0
<TOTAL-REVENUES> 5,756,000
<CGS> 0
<TOTAL-COSTS> (4,017,000)
<OTHER-EXPENSES> (350,000)
<LOSS-PROVISION> 0
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<INCOME-TAX> (6,000)
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<EPS-PRIMARY> .89
<EPS-DILUTED> .89
</TABLE>
