1999
- --------------------------------------------------------------------------------
ANNUAL
- --------------------------------------------------------------------------------
REPORT
FREIT [GRAPHIC-PICTURE OF
FIRST REAL ESTATE CLOCK TOWER]
INVESTMENT TRUST
OF NEW JERSEY
<PAGE>
TRUST PROFILE
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First Real Estate Investment Trust of New Jersey, organized in 1961, is an
equity real estate investment trust. The focus of its activities has been to
acquire real property for long-term investment.
The Trust has elected and conducts its operations in a manner intended to comply
with the requirements for qualifying as a real estate investment trust pursuant
to the Federal Internal Revenue Code. As a result, the Trust receives favorable
tax treatment as provided under the tax code. The Trust has recorded a profit
and has paid dividends to its shareholders during each year since its founding.
Hekemian & Co., Inc., a real estate management and brokerage company, has
managed the Trust's real estate since its inception. The Trust offices are
located at "Corporate 505," 505 Main Street, Hackensack, New Jersey.
Cover Photo
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This two-story Clock Tower is the focal point of our 254,274 square foot
Westridge Square Shopping Center in Frederick, Maryland.
<PAGE>
Contents
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Message to Our Shareholders 1
Properties 3
Balance Sheets 4
Statements of Income and Undistributed Earnings 5
Statements of Cash Flows 6
Notes to Financial Statements 7
Report of Independent Public Accountants 13
Selected Financial Data 14
Management's Discussion and Analysis of Financial
Condition and Results of Operations 15
Shares of Beneficial Interest 18
Corporate Information 19
<PAGE>
Message to Our Shareholders
OPERATING RESULTS:
Net Income for the year ended October 31, 1999 increased slightly to $3,715,000
from $3,685,000 for the prior year. Revenue increased 9.0% to $15,727,000 from
$14,432,000 for the prior year. The revenue increase came principally from real
estate operations ($824,000), and interest income ($736,000). These increases
were offset by a negative swing of $265,000 in the Trust's share of earnings
from its 40% owned affiliate Westwood Hills LLC. This swing resulted from
one-time refinancing costs incurred by the affiliate.
Overall expenses increased $1,265,000 (11.8%) to $12,012,000 in fiscal 1999 from
$10,747,000 for the prior fiscal year. This increase was principally
attributable to a $218,000 increase in real estate operating expenses and
$858,000 in financing costs.
HIGHLIGHTS THIS PAST YEAR:
o Net Income increased to $2.38 per share.
o Dividends increased 6.1% to $2.25 per share.
o Funds From Operations (FFO) increased to $3.49 per share.
o The Trust completed its long-term financing goals and reduced reliance on
short-term, variable rate credit facility.
o Cash equivalents and short-term investments totaled $16.5 million at fiscal
year end.
o The Pathmark Super Center in Patchogue, NY and the continuing lease-up at the
Franklin Crossing Shopping Center contributed substantially to fiscal 1999
earnings.
[GRAPHIC-CHART SHOWING NET EARNINGS]
RESIDENTIAL PROPERTIES: The apartment communities continue to generate increased
contributions to net income. Net Earnings (before financing costs) from
residential properties - including the Trust's 40% owned affiliate - increased
4.9% to $4,309,000 from $4,108,000 for the prior year. This increase resulted
from higher occupancy levels, higher per unit apartment rental rates and lower
per unit apartment operating expenses. To maintain the long-term economic value
and competitive position of residential properties Capital Improvements are made
annually. During fiscal 1999 and 1998 Capital Improvements averaging $440 and
$475 per unit were invested for replacement of carpets, appliances and building
improvements. These Capital Replacement programs, as deemed necessary, are
ongoing.
RETAIL PROPERTIES: Revenues from retail properties increased 6.5% to $8,871,000
in fiscal 1999 from $8,330,000 in the prior year. Net Earnings (before financing
costs) increased 6.9% to $5,114,000 this year from $4,782,000 for the prior
year. Leasing activity at the Trust's Franklin Crossing Shopping Center in
Franklin Lakes, NJ raised occupancy to 71.5% at year-end and space leased to 85%
(the difference representing tenants who have not yet taken occupancy of their
premises).
<PAGE>
FINANCING ACTIVITIES: During fiscal 1997, the Trust recognized the declining
cost trend of fixed rate, long-term mortgage financing. A program was
implemented to replace the Trust's reliance on its short-term, variable rate
financing with long-term, fixed rate financing. This program was completed
during the first quarter of fiscal 1999 by placing long-term financing of $12.9
million on three properties at an average interest cost of 6.736%. Additionally,
during the first quarter, the Trust's 40% owned affiliate, Westwood Hills LLC,
secured a new mortgage which yielded approximately $4.9 million in excess funds
- - $2 million of which were distributed to the Trust in accordance with its
equity ownership position. At the end of fiscal 1999, the Trust's long-term
borrowings of $60 million had an average maturity of 11.2 years (5.2
<PAGE>
years to 14.1 years), with an average interest cost of 7.513%. This long-term
financing has strengthened the Trust's capital and liquidity position. At fiscal
year end the Trust's cash, cash equivalents and short-term investments totaled
$16.5 million. Approximately $14.5 million of these funds are invested in
short-to-intermediate fixed rate Government Agency Bonds yielding an average
weighted interest of 6.475%. In addition to these funds, the Trust has $8
million available under its Line of Credit.
FUNDS FROM OPERATIONS / DIVIDENDS
Funds From Operations ("FFO") is a standard measurement of a REIT's performance.
FFO is defined by the Trust as net income, excluding (i) deferred rents and
gains and losses from property sales; (ii) real estate related depreciation and
amortization and (iii) gains or losses from financing activities. During fiscal
1999 FFO increased to $5,442,000 ($3.49 per share) from $5,299,000 ($3.40 per
share) during fiscal 1998.
The fourth quarter 1999 dividend was increased to $1.05 per share, which raised
dividends to $2.25 per share for fiscal 1999. This compares to $2.12 per share
for fiscal 1998. 1999 dividends represent 94% of Net Income (105.3% of taxable
income) and 64% of FFO compared to 90% and 62% respectively last year.
[GRAPHIC-CHART SHOWING TWO YEAR COMPARISON]
FUTURE OUTLOOK
The Trust's financing program strengthened its balance sheet by providing
liquidity and long-term capital at fixed rates. This capital and the funds
generated will assist the Trust as it continues to pursue new investment
opportunities in the Northeast and Mid-Atlantic States area. We expect continued
steady growth from our core properties and from the completion of the lease-up
at Franklin Crossing.
<PAGE>
The Board of Trustees looks forward to seeing you at the Annual Meeting
scheduled for Wednesday, April 12, 2000, at 7:30 p.m. at the Trust's
headquarters located at 505 Main Street, Hackensack, NJ.
Sincerely,
/s/Robert S. Hekemian /s/Donald W. Barney
--------------------- -------------------
Robert S. Hekemian Donald W. Barney
Chairman President
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 report on Form 10-K under the section "Management's
Discussion and Analysis of Financial Condition and Results of Operations," also
included elsewhere in this report.
2
<PAGE>
Properties
Portfolio of Real Estate Investments
Apartment Buildings
BERDAN COURT APARTMENTS Wayne, New Jersey
GRANDVIEW APARTMENTS Hasbrouck Heights, New Jersey
HAMMEL GARDEN Maywood, New Jersey
HEIGHTS MANOR APARTMENTS Spring Lake Heights, New Jersey
LAKEWOOD APARTMENTS Lakewood, New Jersey
PALISADES MANOR Palisades Park, New Jersey
SHERIDAN APARTMENTS Camden, New Jersey
STEUBEN ARMS River Edge, New Jersey
WESTWOOD HILLS* Westwood, New Jersey
Shopping Centers/Commercial Buildings
FRANKLIN CROSSING SHOPPING CENTER Franklin Lakes, New Jersey
WESTRIDGE SQUARE SHOPPING CENTER Frederick, Maryland
WESTWOOD PLAZA SHOPPING CENTER Westwood, New Jersey
SINGLE TENANT STORE Glen Rock, New Jersey
PATHMARK CENTER Patchogue, New York
Vacant Land
33 ACRES, INDUSTRIAL ZONE South Brunswick, New Jersey
19.26 ACRES, MULTI-FAMILY ZONE Rockaway, New Jersey
4.27 ACRES, OFFICE/RESIDENTIAL ZONE Franklin Lakes, New Jersey
*The Trust holds a 40% interest in Westwood Hills LLC, a New Jersey Limited
Liability Company, which owns the 210-unit apartment community.
3
<PAGE>
<TABLE>
<CAPTION>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
BALANCE SHEETS
OCTOBER 31, 1999 AND 1998
ASSETS
1999 1998
-------- --------
(In Thousands
of Dollars)
<S> <C> <C>
Real estate and equipment, at cost, net of accumulated
depreciation $ 63,441 $ 64,622
Investment in affiliate --- 1,918
Investments in marketable securities 14,453 ---
Cash and cash equivalents 2,083 793
Tenants' security accounts 771 752
Note receivable - affiliate --- 100
Sundry receivables 1,326 728
Prepaid expenses and other assets 1,004 1,172
Deferred charges, net 1,350 1,190
-------- --------
Totals $ 84,428 $ 71,275
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgages payable $ 60,071 $ 47,853
Accounts payable and accrued expenses 503 401
Cash distributions in excess of investment in affiliate 294 ---
Dividends payable 1,638 1,435
Tenants' security deposits 1,000 969
Deferred revenue 402 255
-------- --------
Total liabilities 63,908 50,913
-------- --------
Commitments and contingencies
Shareholders' equity:
Shares of beneficial interest without par value; 1,790,000
shares authorized; 1,559,788 shares issued and outstanding 19,314 19,314
Undistributed earnings 1,253 1,048
Accumulated other comprehensive income (loss) (47) ---
-------- --------
Total shareholders' equity 20,520 20,362
-------- --------
Totals $ 84,428 $ 71,275
======== ========
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
<TABLE>
<CAPTION>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
STATEMENTS OF INCOME, COMPREHENSIVE INCOME AND UNDISTRIBUTED EARNINGS
YEARS ENDED OCTOBER 31, 1999, 1998 AND 1997
INCOME 1999 1998 1997
----------- ----------- -----------
(In Thousands of Dollars,
Except per Share Amounts)
<S> <C> <C> <C>
Revenue:
Rental income $ 13,083 $ 12,450 $ 9,982
Reimbursements 1,750 1,576 1,433
Equity in income (loss) of affiliate (52) 213 139
Interest income 742 6 6
Sundry income 204 187 138
----------- ----------- -----------
Totals 15,727 14,432 11,698
----------- ----------- -----------
Expenses:
Operating expenses 3,118 2,989 2,588
Management fees 623 576 495
Real estate taxes 1,922 1,758 1,692
Interest 4,620 3,762 2,629
Depreciation 1,716 1,650 1,319
----------- ----------- -----------
Totals 11,999 10,735 8,723
----------- ----------- -----------
Income before state income taxes 3,728 3,697 2,975
Provision for state income taxes 13 12 12
Net income $ 3,715 $ 3,685 $ 2,963
=========== =========== ===========
Basic earnings per share $ 2.38 $ 2.36 $ 1.90
=========== =========== ===========
Basic weighted average shares outstanding 1,559,788 1,559,788 1,559,788
=========== =========== ===========
COMPREHENSIVE INCOME
Net income $ 3,715 $ 3,685 $ 2,963
Other comprehensive income (loss) - unrealized
loss on marketable securities (47) --- ---
----------- ----------- -----------
Comprehensive income $ 3,668 $ 3,685 $ 2,963
=========== =========== ===========
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
UNDISTRIBUTED EARNINGS
Balance, beginning of year $ 1,048 $ 670 $ 670
Net income 3,715 3,685 2,963
Less dividends (3,510) (3,307) (2,963)
----------- ----------- -----------
Balance, end of year $ 1,253 $ 1,048 $ 670
=========== =========== ===========
Dividends per share $ 2.25 $ 2.12 $ 1.90
=========== =========== ===========
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
STATEMENTS OF CASH FLOWS
YEARS ENDED OCTOBER 31, 1999, 1998 AND 1997
1999 1998 1997
-------- -------- --------
(In Thousands of Dollars)
<S> <C> <C> <C>
Operating activities:
Net income $ 3,715 $ 3,685 $ 2,963
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 1,878 1,777 1,356
Equity in (income) loss of affiliate 52 (213) (139)
Deferred revenue 147 --- (4)
Changes in operating assets and liabilities:
Tenants' security accounts (19) (33) 35
Sundry receivables, prepaid expenses and other assets (429) (150) (712)
Accounts payable and accrued expenses 102 (8) 131
Tenants' security deposits 31 64 52
-------- -------- --------
Net cash provided by operating activities 5,477 5,122 3,682
-------- -------- --------
Investing activities:
Capital expenditures (536) (5,347) (7,723)
Distributions from affiliate 2,160 200 160
Purchase of marketable securities (14,500) --- ---
Repayment from (loan to) affiliate 100 (100) ---
-------- -------- --------
Net cash used in investing activities (12,776) (5,247) (7,563)
-------- -------- --------
Financing activities:
Dividends paid (3,307) (3,198) (2,667)
Proceeds (repayments) of note payable - bank --- (11,429) 5,767
Net proceeds from mortgage refinancing 3,671 5,443 1,314
Proceeds from mortgage borrowings 9,275 11,100 ---
Repayment of mortgages (728) (619) (494)
Deferred mortgage costs (322) (607) ---
-------- -------- --------
Net cash provided by financing activities 8,589 690 3,920
-------- -------- --------
Net increase in cash and cash equivalents 1,290 565 39
Cash and cash equivalents, beginning of year 793 228 189
-------- -------- --------
Cash and cash equivalents, end of year $ 2,083 $ 793 $ 228
======== ======== ========
Supplemental disclosure of cash flow data:
Interest paid, net of capitalized interest of $68,000 in 1998
and $158,000 in 1997 $ 4,530 $ 3,763 $ 2,589
======== ======== ========
Income taxes paid $ 13 $ 12 $ 12
======== ======== ========
</TABLE>
<PAGE>
Supplemental schedule of noncash investing and financing activities:
During 1998, the Trust completed its acquisition of a 64,000 square foot
commercial property in Patchogue, New York for approximately $11,000,000,
in part, with the proceeds of a $7,500,000 mortgage.
Dividends declared but not paid amounted to $1,638,000, $1,435,000 and
$1,326,000 in 1999, 1998 and 1997, respectively.
See Notes to Financial Statements.
6
<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, Maryland and New York.
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. For fiscal 1999, 1998 and 1997,
the Trust made such an election.
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.
Investments in marketable securities:
Investments in marketable debt securities classified as
"available for sale" are recorded at fair value and
unrealized gains and losses are reported as accumulated
other comprehensive income within shareholders' equity.
Cash and cash equivalents:
Financial instruments which potentially subject the Trust to
concentrations of credit risk consist primarily of cash and
cash equivalents. The Trust considers all highly liquid
investments purchased with a maturity of three months or
less to be cash equivalents. The Trust maintains its cash
and cash equivalents in bank and other accounts, the
balances of which, at times, may exceed Federally insured
limits. At October 31, 1999, such cash and cash equivalent
balances exceeded Federally insured limits by approximately
$1,983,000. Exposure to credit risk is reduced by placing
such deposits with high credit quality financial
institutions.
<PAGE>
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.
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. Amortization of such costs is
included in interest expense and approximated $90,000,
$67,000 and $40,000 in 1999, 1998 and 1997, respectively.
Deferred leasing commissions are amortized on the
straight-line method over the terms of the applicable
leases.
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.
7
<PAGE>
Advertising:
The Trust expenses the cost of advertising and promotions as
incurred. Advertising costs charged to operations amounted
to approximately $58,000, $73,000 and $33,000 in 1999, 1998
and 1997, respectively.
Earnings per share:
The Trust has presented "basic" earnings per share in the
accompanying statements of income in accordance with the
provisions of Statement of Financial Accounting Standards
No. 128, Earnings per Share ("SFAS 128"). SFAS 128 also
requires the presentation of "diluted" earnings per share if
the amount differs from basic earnings per share. Basic
earnings per share is calculated by dividing net income by
the weighted average number of common shares outstanding
during each period. The calculation of diluted earnings per
share is similar to that of basic earnings per share, except
that the denominator is increased to include the number of
additional common shares that would have been outstanding if
all potentially dilutive common shares, such as those
issuable upon the exercise of stock options and warrants,
were issued during the period. For the year ended October
31, 1999, diluted earnings per share have not been presented
because prices of all of the outstanding stock options
approximated the average fair market value and there were no
additional shares derived from the assumed exercise of stock
options and the application of the treasury stock method.
For the years ended October 31, 1998 and 1997, the Trust had
no potentially dilutive common shares.
Comprehensive income:
Effective November 1, 1998, the Trust adopted Statement of
Financial Accounting Standards No. 130, Reporting
Comprehensive Income ("SFAS 130"), which establishes new
rules for the reporting and display of comprehensive income
and its components; however, the adoption had no impact on
the Trust's net income. SFAS 130 requires unrealized gains
or losses on the Trust's available-for-sale securities, to
be included in other comprehensive income.
Other recent accounting pronouncements:
The Financial Accounting Standards Board has issued certain
other pronouncements as of October 31, 1999 that will
become effective in subsequent periods; however, management
does not believe that any of those pronouncements will
effect any financial accounting measurements or disclosures
the Trust will be required to make.
Note 2 - Investment in affiliate:
The Trust is a 40% member of the Affiliate, a 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. The
Affiliate owns a residential apartment complex located in
Westwood, New Jersey.
Summarized financial information of the Affiliate as of October
31, 1999 and 1998 and for each of the three years in the period
ended October 31, 1999 is as follows:
8
<PAGE>
<TABLE>
<CAPTION>
1999 1998
-------- --------
(In Thousands
of Dollars)
<S> <C> <C>
Balance sheet data:
Assets:
Real estate and equipment, net $ 14,190 $ 14,416
Other 812 976
-------- --------
Total assets $ 15,002 $ 15,392
Liabilities and equity:
Liabilities:
Mortgage payable $ 15,362 $ 10,025
Other 378 576
-------- --------
Totals 15,740 10,601
-------- --------
Members' equity (deficiency):
Trust (294) 1,918
Others (444) 2,873
-------- --------
Totals (738) 4,791
-------- --------
Total liabilities and equity $ 15,002 $ 15,392
======== ========
<CAPTION>
1999 1998 1997
------ ------ ------
(In Thousands of Dollars)
<S> <C> <C> <C>
Income statement data:
Rental revenue $2,728 $2,617 $2,497
Rental expenses 2,415 2,086 2,149
------ ------ ------
Income from rental operations 313 531 348
Prepayment penalty on mortgage refinancing (442) --- ---
------ ------ ------
Net income (loss) $ (129) $ 531 $ 348
======= ======= =======
</TABLE>
At October 31, 1998, the Trust had a $100,000 note receivable
from the Affiliate that was repaid during the year ended October
31, 1999 with interest at 7%. Interest income was not material
for the years ended October 31, 1999 and 1998.
<PAGE>
Note 3 - Investments in marketable securities:
At October 31, 1999, the Trust's investment in marketable debt
securities, all of which were classified as available for sale,
consisted of government agency bonds. The maturities for all
securities held at October 31, 1999 are as follows:
<TABLE>
<CAPTION>
Amortized
Cost Fair Value
----------- -----------
<S> <C> <C>
One to five years $14,000,000 $13,986,000
Five to ten years 500,000 467,000
----------- -----------
Totals $14,500,000 $14,453,000
=========== ===========
</TABLE>
9
<PAGE>
Note 4 - Real estate and equipment:
Real estate and equipment consists of the following:
<TABLE>
<CAPTION>
Range of
Estimated
Useful Lives 1999 1998
------------ ------- -------
(In Thousands
of Dollars)
<S> <C> <C> <C>
Land --- $22,773 $22,773
Unimproved land --- 2,354 2,305
Apartment buildings 7-40 years 10,764 11,013
Commercial buildings and shopping
centers 15-50 years 40,723 39,931
Construction in progress --- 1,426 2,053
Equipment 3-15 years 522 893
------- -------
78,562 78,968
Less accumulated depreciation 15,121 14,346
------- -------
Totals $63,441 $64,622
======= =======
</TABLE>
Note 5 - Mortgages payable:
Mortgages payable consist of the following:
<TABLE>
<CAPTION>
1999 1998
------- -------
(In Thousands
of Dollars)
<S> <C> <C>
Northern Life Insurance Cos. - Frederick, MD (A) $18,609 $18,876
National Realty Funding L.C. - Westwood, NJ (B) 10,420 10,526
Larson Financial Resources, Inc. - Spring Lake, NJ (C) 3,664 ---
Summit Bank - Spring Lake, NJ (C) --- 29
Summit Bank - Patchogue, NY (D) 7,295 7,410
Larson Financial Resources, Inc. - Wayne, NJ (E) 10,898 11,012
Larson Financial Resources, Inc. - River Edge, NJ (F) 5,323 ---
Larson Financial Resources, Inc. - Maywood, NJ (G) 3,862 ---
------- -------
Totals $60,071 $47,853
======= =======
</TABLE>
(A) The mortgage is payable in monthly installments of
$152,153 including interest at 8.31% through June
2007 at which time the outstanding balance is due.
The mortgage is secured by a retail building in
Frederick, Maryland having a net book value of
approximately $23,886,000.
<PAGE>
(B) The mortgage is payable in monthly installments of
$73,248 including interest at 7.38% through February
2013 at which time the outstanding balance is due.
The mortgage is secured by a retail building in
Westwood, New Jersey having a net book value of
approximately $11,300,000.
(C) On November 19, 1998, the Trust repaid the
outstanding mortgage on the Spring Lake, New Jersey
apartment building utilizing proceeds from a new
mortgage in the amount of $3,700,000. The new
mortgage is payable in monthly installments of
$23,875 including interest at 6.70% through December
2013 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 $519,000.
(D) Payable in monthly installments of $54,816 including
interest at 7.375% through January 2005 at which time
the outstanding balance is due. The mortgage is
secured by a retail building in Patchogue, New York
having a net book value of approximately $10,486,000.
(E) Payable in monthly installments of $76,023 including
interest at 7.29% through July 2010 at which time the
outstanding balance is due. The mortgage is secured
by an apartment building in Wayne, New Jersey having
a net book value of approximately $1,631,000.
(F) Payable in monthly installments of $34,862 including
interest at 6.75% through December 2013 at which time
the outstanding balance is due. The mortgage is
secured by an apartment building in River Edge, New
Jersey having a net book value of approximately
$1,301,000.
(G) Payable in monthly installments of $25,295 including
interest at 6.75% through December 2013 at which time
the outstanding balance is due. The mortgage is
secured by an apartment building in Maywood, New
Jersey having a net book value of approximately
$933,000.
10
<PAGE>
Principal amounts (in thousands of dollars) due under the above
obligations in each of the five years subsequent to October 31,
1999 are as follows:
Year Ending
October 31, Amount
----------- ------
2000 $ 797
2001 860
2002 927
2003 1,000
2004 1,079
Based on borrowing rates currently available to the Trust, the
fair value of the mortgage debt approximates carrying value at
October 31, 1999.
Note 6 - Line of credit agreement:
The Trust has a revolving line of credit agreement with Summit
Bank which expires on December 1, 1999. Maximum allowable
borrowings under the agreement were $8,000,000 and $12,310,000
at October 31, 1999 and 1998, respectively. The line of credit
bears interest at the bank's floating base rate plus .25% or the
LIBOR rate plus 175 basis points. Outstanding borrowings are
secured by apartment buildings in Hasbrouck Heights, New Jersey,
Lakewood, New Jersey and Palisades Park, New Jersey as well as a
retail building in Franklin Lakes, New Jersey. There were no
outstanding borrowings under the agreement at October 31, 1999
and 1998. One of the directors of the bank is a trustee of the
Trust.
Note 7 - Commitments and contingencies:
Leases:
Retail tenants:
The Trust leases retail space having a net book value
of approximately $55,727,000 at October 31, 1999 to
tenants for periods of up to twenty-five 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
October 31, 1999 are as follows:
Year Ending
October 31, Amount
----------- ------
2000 $ 6,440
2001 6,299
2002 5,979
2003 5,631
2004 5,016
Thereafter 46,143
-------
Total $75,508
=======
<PAGE>
The above amounts assume that all leases which expire
are not renewed and, accordingly, neither minimal
rentals nor rentals from replacement tenants are
included.
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
three years in the period ended October 31, 1999 were
not material.
Residential tenants:
Lease terms for residential tenants are usually one
year or less.
Environmental concerns:
In accordance with applicable regulations, the Trust
reported to the New Jersey Department of Environmental
Protection ("NJDEP") that a historical discharge of
hazardous material was discovered in 1997 at the renovated
Franklin Lakes shopping center (the "Center").
11
<PAGE>
In November 1999, the Trust received a no further action
letter from the NJDEP concerning the historical discharge at
the Center. However, the Trust is required to continue
monitoring such discharge, the cost of which will not be
material.
Note 8 - Management agreement and related party transactions:
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
$623,000, $576,000 and $495,000 in 1999, 1998 and 1997,
respectively. In addition, Hekemian charged the Trust fees and
commissions in connection with the acquisition of the commercial
building in Patchogue, New York and various mortgage refinancing
and lease acquisition fees. Such fees and commissions amounted
to approximately $208,000 and $718,000 in 1999 and 1998,
respectively.
Note 9 - Basic earnings per share:
Basic earnings per share, based on the weighted average number
of shares outstanding during each period, are comprised of
ordinary income.
Note 10- Equity incentive plan:
On September 10, 1998, the Board of Trustees approved the
Trust's Equity Incentive Plan (the "Plan") which was ratified by
the Trust's shareholders on April 7, 1999, whereby up to 230,000
of the Trust's shares of beneficial interest may be granted to
key personnel in the form of stock options, restricted share
awards and other share-based awards. In connection therewith,
the Board of Trustees approved an increase of 230,000 shares in
the Trust's number of authorized shares of beneficial interest.
Key personnel eligible for these awards include trustees,
executive officers and other persons or entities including,
without limitation, employees, consultants and employees of
consultants, who are in a position to make significant
contributions to the success of the Trust. Under the Plan, the
exercise price of all options will be the fair market value of
the shares on the date of grant. The consideration to be paid
for restricted share and other share-based awards shall be
determined by the Board of Trustees, with the amount not to
exceed the fair market value of the shares on the date of grant.
The maximum term of any award granted may not exceed ten years.
The actual terms of each award will be determined by the Board
of Trustees.
Upon ratification of the Plan on April 7,1999, the Trust issued
188,500 stock options which it had previously granted to key
personnel on September 10, 1998. The fair value of the options
on the date of grant was $30 per share. The options, all of
which are outstanding at October 31, 1999, are exercisable
through September 2008.
<PAGE>
In accordance with the provisions of Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees ("APB
25"), the Trust will recognize compensation costs as a result of
the issuance of restricted share and other share-based awards
based on the excess, if any, of the fair value of the underlying
stock at the date of grant or award (or at an appropriate
subsequent measurement date) over the amount the recipient must
pay to acquire the stock. Therefore, the Trust will not be
required to recognize compensation expense as a result of any
grants of stock options, restricted share and other share-based
awards at an exercise price that is equivalent to or greater
than fair value. The Trust will also make pro forma disclosures,
as required by Statement of Financial Accounting Standards No.
123, Accounting for Stock-Based Compensation ("SFAS 123"), of
net income or loss as if a fair value based method of accounting
for stock options had been applied instead if such amounts
differ materially from the historical amounts.
In the opinion of management, if compensation cost for the stock
options granted in 1999 had been determined based on the fair
value of the options at the grant date under the provisions of
SFAS 123 using the Black-Scholes option pricing model and
assuming a risk-free interest rate of 5.25%, expected option
lives of ten years, expected volatility of 1% and expected
dividends of 7.13%, the Company's pro forma net income and pro
forma basic net income per share arising from such computation
would not have differed materially from the corresponding
historical amounts.
* * *
12
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
J.H Cohn LLP LAWRENCEVILLE, NJ
75 EISENHOWER PARKWAY NEW YORK, NY
ROSELAND, NJ 07068-1697 ROSELAND, NJ
(973) 228-3500 SAN DIEGO, CA
To the Trustees and Shareholders
First Real Estate Investment Trust of New Jersey
We have audited the accompanying balance sheets of FIRST REAL ESTATE
INVESTMENT TRUST OF NEW JERSEY as of October 31, 1999 and 1998, and the related
statements of income, comprehensive income, undistributed earnings and cash
flows for each of the three years in the period ended October 31, 1999. These
financial statements are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of First Real Estate Investment
Trust of New Jersey as of October 31, 1999 and 1998, and its results of
operations and cash flows for each of the three years in the period ended
October 31, 1999, in conformity with generally accepted accounting principles.
/s/J.H. Cohn LLP
----------------
J.H. Cohn LLP
Roseland, New Jersey
November 22, 1999
13
<PAGE>
<TABLE>
<CAPTION>
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
Selected Financial Data (1)
(in thousands except per share amounts)
Years ended October 31, 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
Revenues from Real Estate Operations $15,037 $14,213 $11,553 $11,377 $ 11,113
Interest Income 742 6 6 10 5
Equity in Earnings (Loss) of Affiliate (1) (52) 213 139 92 81
------- ------- ------- ------- --------
15,727 14,432 11,698 11,479 11,199
------- ------- ------- ------- --------
Expenses:
Real Estate Operations 5,244 5,026 4,499 4,571 4,110
Financing Costs 4,620 3,762 2,629 2,749 2,818
General Expenses 432 309 288 202 251
Depreciation 1,716 1,650 1,319 1,295 1,234
------- ------- ------- ------- --------
12,012 10,747 8,735 8,817 8,413
------- ------- ------- ------- --------
Net Income $ 3,715 $ 3,685 $ 2,963 $ 2,662 $ 2,786
------- ------- ------- ------- --------
Earnings Per Share:
Basic 2.38 2.36 1.90 1.71 1.79
------- ------- ------- ------- --------
Diluted 2.38 2.36 1.90 1.71 1.79
------- ------- ------- ------- --------
Cash Dividends Declared Per
Common Share 2.25 2.12 1.90 1.71 2.53
------- ------- ------- ------- --------
Total Assets: $84,428 $71,275 $59,233 $51,674 $51,838
------- ------- ------- ------- --------
Long-Term Obligations $60,071 $47,853 $24,429 $23,609 $24,110
------- ------- ------- ------- --------
Secured Note Payable $ -- $ -- $11,429 $ 5,662 $ 5,169
------- ------- ------- ------- --------
Shareholders' Equity $20,520 $20,362 $19,984 $19,984 $19,989
------- ------- ------- ------- --------
Weighted Average Number
of Shares Outstanding 1,559 1,559 1,559 1,559 1,559
------- ------- ------- ------- --------
</TABLE>
(1) Westwood Hills LLC is accounted for using the equity method of accounting.
Fiscal years ended 1996 and 1995 have been restated to reflect this accounting
method.
14
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Overview
The Trust is an equity REIT which owns a portfolio of residential apartment and
retail properties. The Trust's revenues consist primarily of fixed rental income
and additional rent in the form of expense reimbursements derived from its
income producing retail properties. The Trust also receives income from its 40%
owned affiliate, Westwood Hills, which owns a residential apartment property.
The Trust's policy has been to acquire real property for long-term investment.
The following discussion should be read in conjunction with the Trust's
financial statements and related notes included elsewhere in this Annual Report.
Certain statements in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations" may constitute forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act. Although the Trust believes that the expectations reflected in
such forward-looking statements are based on reasonable assumptions, such
statements are subject to risks and uncertainties, including those discussed
elsewhere in this Annual Report, that could cause actual results to differ
materially from those projected.
Results of Operations:
Fiscal Years ended October 31, 1999 and 1998
Revenues
For the fiscal year ended October 31, 1999, total revenues increased $1,295,000
(8.9%) to $15,727,000 from $14,432,000 for fiscal 1998. $824,000 of the increase
comes from the Trust's real estate operations, and $736,000 from increased
interest income. These increases were offset by a negative swing of $265,000 in
the Trust's share of earnings from its 40% owned affiliate from a profit of
$213,000 for fiscal 1998 to a loss of $52,000 for fiscal 1999.
Real Estate Operations: The increase in revenues from real estate operations
(5.8%) results primarily from higher revenues from the Trust's residential and
retail properties. Higher per unit rental collections were experienced at the
Trust's residential properties. Increased revenues at the Trust's retail
properties came primarily from the Patchogue, NY, property (in for the full
fiscal 1999 year compared to 10 1/2 months for fiscal 1998), and increased
occupancy during fiscal 1999 at the Franklin Crossing Shopping Center.
Interest Income: The mortgage financings that took place during the first
quarter of fiscal 1999 generated funds of approximately $14.8 million. These
funds were invested in institutional money market pools that generated the bulk
of the increased interest income. During the fourth quarter of 1999, in order to
increase yields, the Trust redeployed $14 million from the money market pools
into short-to-intermediate term Government Agency Bonds.
Earnings From 40% Owned Affiliate: The Trust's 40% owned affiliate, Westwood
Hills L.L.C. refinanced a $10+ million, 7.8% mortgage for a $15.5 million,
6.693% mortgage. One-time refinancing costs of $440,000 were incurred. The
Trust's share of these refinancing costs was $176,000. This one-time financing
cost coupled with reduced earnings due to higher debt service resulted in the
negative swing of $264,000 in the Trust's share of its affiliate's earnings.
<PAGE>
Expenses:
For the fiscal year ended October 31, 1999 overall expenses increased $1,265,000
(11.8%) to $12,012,000 from $10,747,000 for fiscal 1998. The increases and
percentage increases came in the following areas: Real estate operations:
$218,000 (4.3%); financing costs: $858,000 (22.8%); General expenses: $123,000
(39.8%); and, Depreciation expense: $66,000 (4.0%).
Real Estate Operations: Direct operating expenses increased $55,000 (1.7%),
while real estate taxes increased $164,000 (9.4%). The majority of these
increases came from the new properties at Patchogue and Franklin Crossing.
Financing Costs: The increase in Financing Costs of $858,000 results from the
increased debt levels from the refinancings during fiscal 1999 and 1998. These
increased costs are offset by the increased interest income earned of $736,000
(see above).
General Administrative Expense: The increase in this category results primarily
from higher Trustee fees, a function of a greater number of meetings, and legal
fees incurred in connection with the Trust becoming a 34 Act reporting company.
Much of this cost increase is considered non-recurring.
Depreciation Expense: Higher depreciation results primarily from depreciation at
the newer properties at Patchogue and Franklin Crossing.
Net Income
For the fiscal year ended October 31, 1999 Net Income was $3,715,000 ($2.38 per
share) compared to Net Income of $3,685,000 ($2.36 per share) for the fiscal
year ended October 31, 1998.
15
<PAGE>
Earnings at operating real estate properties increased 7.2% to $8,077,000 from
$7,538,000 last fiscal year. This earnings increase at the real estate operating
properties is a combination of a 5.8% increase in revenues outpacing a 4.27%
increase in operating expenses. The principal reasons for this increase were
higher per unit rents at the Trust's residential properties and increased
earnings from Trust's retail properties in Patchogue, NY, and at Franklin
Crossing Shopping Center in Franklin Lakes, NJ.
The real estate operating gains were offset by (1) the negative swing in the
Trust's share of the loss at it's 40% owned affiliate, (2) higher financing
costs not completely offset by higher interest earnings, and (3) higher General
Administrative Expenses.
The Trust believes that in fiscal 2000 the continued economic strength in the
employment markets in which its properties are located should allow the Trust to
realize its current occupancy rates for its apartment properties with a sound
support base for its retail properties.
Funds From Operations ("FFO")
FFO is considered by many as a standard measurement of a REIT's performance. The
Trust computes FFO as follows:
<TABLE>
<CAPTION>
Year Ended October 31,
1999 1998
------- -------
<S> <C> <C>
Net Income $3,715 $ 3,685
Depreciation 1,716 1,650
Amortization of Deferred
Mortgage Costs 90 67
Deferred Rents (399) (378)
Debt Retirement Cost --- 130
Other 320 145
------- -------
Funds From Operations $ 5,442 $ 5,299
======= =======
</TABLE>
FFO does not represent cash generated from operating activities in accordance
with generally accepted accounting principles ("GAAP"), 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 by certain other REITs may
vary materially from that of the Trust, and therefore the Trust's FFO and the
FFO of other REITs may not be directly comparable.
<PAGE>
Fiscal Years ended October 31, 1998 and October 31, 1997
Revenues
For the fiscal year ended October 31, 1998, total revenue increased
$2,734,000(23.4%) from $11,698,000 in fiscal 1997 to $14,432,000. $2,313,000 of
the increase in revenues is due, primarily, to the December 1997 acquisition of
the property in Patchogue, New York and the reopening of the new and expanded
Franklin Crossing Shopping Center in the fourth quarter of fiscal 1997. Grand
Union, which leases approximately 47% of the available leasable space and
operates a supermarket at Franklin Crossing, commenced paying rent in October
1997. At October 31, 1998, Franklin Crossing was 60% occupied and 65% leased.
The balance of the revenue increase is attributable to increased revenues at the
Trust's other properties and its 40% equity in the earnings of Westwood Hills.
Expenses
For the year ended October 31, 1998, total expenses increased $2,012,000 (23.0%)
from $8,735,000 in fiscal 1997 to $10,747,000 in fiscal 1998. $1,133,000 of this
increase is attributable to an increase in financing costs (including a one-time
debt retirement charge of $130,000) resulting from the Trust's increased debt
level. Real estate operating expenses increased $528,000 (11.7%) from $4,498,000
in fiscal 1997 to $5,026,000 in fiscal 1998, primarily due to $470,000
attributable to the operations at Patchogue and Franklin Crossing. Depreciation
increased $331,000 (25.1%) from $1,319,000 in fiscal 1997 to $1,650,000 in
fiscal 1998 primarily due to additional depreciation taken on the Patchogue and
Franklin Crossing properties. In fiscal 1999, the Trust expects its rental
revenues to continue to grow at a faster rate than its expenses. Under the terms
of their leases, retail tenants reimburse the Trust for the majority of the
operating expenses and real estate taxes incurred at the retail properties.
Varying occupancy rates affect the amount of reimbursements received by the
Trust. For the past three fiscal years, average occupancy at the retail
properties has been 98.5%.
16
<PAGE>
Net Income and Funds From Operations
For the fiscal year ended October 31, 1998, the Trust's net income increased
$722,000 (24.4%) from $2,963,000 in fiscal 1997 to $3,685,000. Earnings per
share increased from $1.90 per share in fiscal 1997 to $2.36 per share in fiscal
1998. Earnings at operating properties increased $1,801,000 (31.5%) to
$7,538,000 from $5,733,000 for the prior year. Earnings at same properties
increased 5.9% as a result of high, stable occupancy levels, and revenue
increases (3.7%) outpacing expense increases (1.4%). Earnings from the Trust's
new retail property in Patchogue, New York and the reopened Franklin Crossing
Shopping Center accounted for the majority of the earnings increases. Funds From
Operations ("FFO") increased $900,000 (20.5%) from $4,399,000 ($2.82 per share)
in fiscal 1997 to $5,299,000 ($3.40 per share) in fiscal 1998.
Liquidity and Capital Resources
At October 31, 1999, the Trust's cash, cash equivalents and marketable
securities totaled $16,536,000 as compared to $793,000 at October 31, 1998. The
majority of this increase ($14.8 million) resulted from the mortgage financings
that took place during the first quarter of fiscal 1999. These funds, and the
funds available from the Trust's revolving credit line are available for
property acquisitions.
At October 31, 1999, the Trust's aggregate outstanding mortgage debt was
approximately $60 million, with a fixed weighted average interest cost of
7.513%, and an average life of 11.22 years. At October 31, 1998, the Trust's
mortgage debt was approximately $47.8 million, with a fixed weighted interest
cost of 7.826%, and an average life of 8.12 years. The Trust anticipates that
the cash flow from operations will be more than sufficient to meet the Trust's
operational needs and the increased mortgage obligations. As a result of the
long-term fixed rate financing, the Trust believes that its exposure to market
risk relating to interest rate risk is not material. However, to the extent the
proceeds from the various financings cannot be redeployed to earn more than the
stated interest costs, there will be a negative impact on earnings and cash flow
available to pay dividends. To offset the Trust's increased debt-carrying costs,
the funds generated from the financings have been invested first in short term
institutional money market pools, and, during October 1999, $14 million was
redeployed into short-to-intermediate, fixed-rate Government Agency Bonds. These
bonds yield a weighted average interest of 6.475% and have a weighted maturity
of 27.9 months. Since the market value of these bonds are interest rate
sensitive, a sale of all or a portion of these bonds prior to maturity in a high
interest rate environment, may result in a loss to the Trust. Since the bonds
are relatively short-term in nature, the Trust believes that the interest rate
risk is not material.
The Trust makes capital improvements to, primarily, its apartment properties
when it deems such improvements to be necessary or appropriate. The short term
impact of such capital outlays will be to depress the Trust's current cash flow.
The Trust is now experiencing the benefits of these expenditures by preserving
the physical integrity of its properties and securing increased rentals. Other
than the apartment rehabilitation program described above, the Trust has made no
commitments and has no understandings for any material capital expenditures
during fiscal 2000 other than in the ordinary course of business.
<PAGE>
REIT Distributions to Shareholders
Since its inception in 1961, the Trust has elected to be treated as a REIT for
Federal Income Tax purposes. In order to qualify as a REIT, the Trust must
satisfy a number of highly technical and complex operational requirements
including that it must distribute to its shareholders at least 95% of its REIT
taxable income. The Trust anticipates making distributions to shareholders from
operating cash flows, which are expected to increase from future growth in
rental revenues. Although cash used to make distributions reduces amounts
available for capital investment, the Trust generally intends to distribute not
less than 95% of the Trust's REIT taxable income in order to satisfy the
applicable REIT requirement as set forth in the Code.
17
<PAGE>
Cash dividends are paid to shareholders on a quarterly basis. The following
table lists the dividends paid or declared for the three most recent fiscal
years:
($000) Dividends as a %
Per Share Total Dividends Taxable Income of Taxable Income
--------- --------------- -------------- -----------------
1999 $2.25 $3,509 $3,332 105.3%
1998 $2.12 $3,307 $3,170 104.3%
1997 $1.90 $2,964 $2,813 105.4%
Inflation
The Trust anticipates that the U.S. Mid-Atlantic States will continue to
experience moderate growth with limited inflation. Any sustained inflation may,
however, negatively impact the Trust in at least two areas: (i) the interest
costs of any new mortgage financing or the use of the Summit Bank line of credit
may be higher than rates currently in effect; and (ii) higher real estate
operating costs, especially in those areas where such costs are not chargeable
to commercial tenants.
Year 2000 Issue
The Trust has not experienced any disruptions to its business operations
resulting from the Y2K issue.
Quantitative and Qualitative Disclosures About Market Risk
See "Liquidity and Capital Resources" above.
Shares of Beneficial Interest
The Shares are traded in the over-the-counter market through use of the OTC
Bulletin Board(R) Service (the "OTC Bulletin Board") provided by NASD, Inc. The
Trust's symbol is FREVS. The Trust does not believe that an active public
trading market exists for the Shares, since historically only small volumes of
the Shares are traded on a sporadic basis. The following table sets forth, for
the periods indicated, the high and low bid quotations for the Shares on the OTC
Bulletin Board as provided by Janney Montgomery Scott, Inc., members of the New
York Stock Exchange and other national securities exchanges. As of December 6,
1999 there were 404 holders of record of the Shares.
<PAGE>
Dividends
High Low Per Share
---- --- ---------
Fiscal Year Ended October 31, 1999
First Quarter $ 30 $ 29 $ 0.40
Second Quarter $ 30 $ 29 $ 0.40
Third Quarter $ 29 $ 27 $ 0.40
Fourth Quarter $ 27 1/2 $ 27 $ 1.05
Fiscal Year Ended October 31, 1998
First Quarter $ 25 1/2 $ 25 $ 0.40
Second Quarter $ 26 $ 25 1/2 $ 0.40
Third Quarter $ 28 $ 26 $ 0.40
Fourth Quarter $ 30 $ 27 $ 0.92
The bid quotations set forth above for the Shares reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.
18
<PAGE>
Corporate Information
Trustees
ROBERT S. HEKEMIAN
Chairman and Chief Executive Officer,
Hekemian & Co., Inc.
DONALD W. BARNEY
Consultant and Investor
JOHN B. VOSKIAN, M.D.
Physician
HERBERT C. KLEIN, Esq.
Partner,
Nowell, Amoroso, Klein, Bierman, P.A.
NICHOLAS A. LAGANELLA
President,
P.T. & L. Construction Co.
CHARLES J. DODGE
Chief Executive Officer and President,
David Cronheim Mortgage Corp.
RONALD J. ARTINIAN
Private Investor
ALAN L. AUFZIEN
Chairman, Norall Organisation
Officers
Robert S. Hekemian
Chairman of the Board
Donald W. Barney
President
John B. Voskian, M.D.
Secretary
William R. DeLorenzo, Jr.
Executive Secretary and Treasurer
<PAGE>
General Information
Corporate Headquarters
505 Main Street, P.O. Box 667
Hackensack, New Jersey 07602
(201) 488-6400
Market Maker
Janney Montgomery Scott, LLC
Hackensack, New Jersey
Managing Agent
Hekemian & Co., Inc.
Hackensack, New Jersey
Auditors
J. H. Cohn LLP
Roseland, New Jersey
Transfer Agent
Registrar and Transfer Company
Cranford, New Jersey
Annual Meeting
The Annual Meeting of Shareholders is
scheduled for Wednesday, April 12, 2000,
at 7:30 p.m. to be held at the offices of
First Real Estate Investment Trust of
New Jersey, 505 Main Street,
Hackensack, New Jersey.
Form 10-K
A copy of Form 10-K filed with the
Securities and Exchange Commission is
available to shareholders upon
written request.
19
<PAGE>
FIRST REAL ESTATE [GRAPHIC-PICTURE OF
INVESTMENT TRUST CLOCK TOWER]
OF NEW JERSEY
