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FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY, INC. (FREVS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered steady operations: total real estate revenue grew 1.4% year over year to approximately $7.24M, while GAAP EPS was $0.12; AFFO/share rose to $0.23, reflecting stable residential fundamentals offset by softer commercial .
  • Year-over-year net income comparison is noisy; prior-year Q3 included a litigation settlement (~$15.7M gross; ~$14.1M FREIT share) that inflated Q3 2024 GAAP EPS to $1.98, versus $0.12 this quarter .
  • Residential segment continued to improve on rent and occupancy, while commercial occupancy and co-tenancy dynamics (e.g., TJ Maxx) weighed on commercial revenues; dividend increased to $0.10 (+$0.02 QoQ) .
  • Capital structure actions remain a near-term catalyst: Westwood Plaza loan paid down by ~$5.7M, yielding approximately $705K annual debt service savings; Preakness Shopping Center’s $25M mortgage is in active extension negotiations .

What Went Well and What Went Wrong

What Went Well

  • Residential revenue increased approximately $146K YoY in Q3, driven by base rent growth and slightly higher occupancy (96.9% vs. 96.8% YoY); residential NOI rose to ~$3.14M in Q3 .
  • AFFO/share improved to $0.23 in Q3 and FFO/share rose to $0.25, underscoring underlying cash flow resilience despite commercial headwinds .
  • Proactive balance sheet management: Westwood Plaza loan extended to May 1, 2026 at a fixed 8.5%, paid down ~$5.7M, and reduced escrow resulting in a ~$705K refund; expected ~$705K annual debt service savings .

Management quote-style statements:

  • “Total real estate revenue increased 1.4% to approximately $7,244,000... driven by an increase from the residential segment” .
  • “The pay down of this loan will result in annual debt service savings of approximately $705,000” .
  • “Management expects [Preakness] loan to be further extended” (subject to definitive agreement) .

What Went Wrong

  • Commercial occupancy weakened further (Q3 total average commercial occupancy 47.6% vs. 51.8% YoY), with Preakness and Westwood Plaza average occupancies declining in the nine-month period (43.8% and 29.8%, respectively) .
  • Commercial NOI decreased to ~$0.53M in Q3 (from ~$0.76M YoY), reflecting co-tenancy rent reductions (e.g., TJ Maxx after K-Mart termination) and broader vacancy pressure .
  • YoY comparisons distorted by prior-year litigation settlement; absent the one-time gain, GAAP comparisons are more muted, complicating headline growth narratives .

Financial Results

Quarterly Trend (QoQ)

MetricQ1 2025Q2 2025Q3 2025
Total Real Estate Revenues ($USD)$7,269,000 $7,258,000 $7,244,000
GAAP EPS ($)$0.08 $0.12 $0.12
Net Income Attributable to Common Equity ($USD)$614,000 $894,000 $879,000
EBITDA ($USD)*$2,689,000$3,002,000$3,018,000
EBITDA Margin %*37.0%41.4%41.7%
Net Income Margin %*8.45%12.32%12.13%

*Values retrieved from S&P Global.

Year-over-Year (YoY) – Q3 2025 vs. Q3 2024

MetricQ3 2024Q3 2025
Total Real Estate Revenues ($USD)$7,147,000 $7,244,000
GAAP EPS ($)$1.98 $0.12
Net Income Attributable to Common Equity ($USD)$14,791,000 $879,000

YoY note: Prior-year results included a litigation settlement of approximately $15.7M gross (~$14.1M FREIT share), materially inflating Q3 2024 earnings .

Segment Breakdown

MetricQ1 2025Q2 2025Q3 2025
Residential Revenues ($USD)$5,363,000 $5,440,000 $5,466,000
Commercial Revenues ($USD)$1,906,000 $1,818,000 $1,778,000
Residential NOI ($USD)$2,994,000 $3,258,000 $3,137,000
Commercial NOI ($USD)$567,000 $563,000 $532,000

KPIs

KPIQ1 2025Q2 2025Q3 2025
AFFO per Share ($)$0.16 $0.23 $0.23
FFO per Share ($)$0.17 $0.24 $0.25
Dividend per Share ($)$0.08 $0.08 $0.10
Total Avg Residential Occupancy (%)96.8% 97.1% 96.9%
Total Avg Commercial Occupancy (%)48.2% 48.2% 47.6%
Weighted Avg Shares (Basic)7,463 7,469 7,471

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per Share ($)Q3 2025$0.08 (Q2 2025 actual) $0.10 (Q3 declared) Raised
Capital Structure – Westwood Plaza LoanEffective 5/1/2025N/AExtended to 5/1/2026; fixed 8.5%; ~$5.7M paydown; ~$705K annual debt service savings Positive structural change
Preakness Shopping Center Mortgage ($25M)As of 8/1/2025N/A90-day extension to 11/1/2025; negotiating 5-year extension with ~$5M potential paydown; no assurance until definitive agreement In-progress; pending definitive agreement

No formal revenue, margin, OpEx, OI&E, or tax rate guidance was provided in Q3 materials .

Earnings Call Themes & Trends

(Company did not publish a Q3 2025 earnings call transcript; themes derived from press releases.)

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Residential fundamentalsRent increases and occupancy improved (96.8% in Q1; 97.1% in Q2) Continued strength; occupancy 96.9%, residential revenue +$146K YoY Improving/Stable
Commercial occupancy48.2% in Q1 and Q2; TJ Maxx co-tenancy reductions impacted rent 47.6% in Q3; nine-month average down at Preakness (43.8%) and Westwood Plaza (29.8%) Deteriorating
Tenant dynamics (co-tenancy)TJ Maxx invoked one-year co-tenancy clause (Mar 2024), lowering rent Ongoing pressure reflected in commercial revenues/NOI Ongoing headwind
Capital structure actionsWestwood Plaza loan extended 90 days (to 5/1/2025) in Q1 Extended to 5/1/2026; ~$5.7M paydown, ~$705K annual savings Positive
Preakness Shopping Center financingNot highlighted in Q1/Q2 docs90-day extension to 11/1/2025; negotiating 5-year extension, potential ~$5M paydown Positive if finalized
Litigation settlement effectAbsent in 2025 periods; prior-year comps benefited YoY comparisons distorted as Q3 2024 had ~$15.7M settlement Normalizing comps in 2025
Dividend policy$0.08 declared in Q1 and Q2 Increased to $0.10 in Q3 Improving shareholder return

Management Commentary

  • “Total real estate revenue increased 1.4%... primarily attributable to an increase from the residential segment... base rents across most properties... average occupancy increased slightly to 96.9%” .
  • “Net income attributable to common equity was approximately $879,000 or $0.12 per share... as compared to approximately $14,791,000 or $1.98 per share... [due to] litigation settlement... received in the prior year’s comparable period” .
  • “The pay down of this loan will result in annual debt service savings of approximately $705,000” (Westwood Plaza) .
  • “Management expects [Preakness] loan to be further extended... however... no assurance [until] a definitive agreement” .
  • AFFO emphasis: FREIT believes AFFO is a superior measure of operating performance; Q3 AFFO/share was $0.23 .

Q&A Highlights

  • No Q3 2025 earnings call transcript was found; Q&A themes and any clarifications are unavailable [ListDocuments earnings-call-transcript: none found].

Estimates Context

  • S&P Global consensus estimates for Q3 2025 EPS, revenue, target price, and recommendation were unavailable; coverage appears limited for this OTC-listed REIT. Therefore, no beat/miss versus consensus can be assessed for Q3 2025.
  • Actual revenue reported for Q3 2025 was approximately $7.24M (press release), consistent with the period’s disclosed totals .
  • Implications: In the absence of consensus, investors should anchor on sequential and underlying segment trends, AFFO/FFO progression, and capital structure developments.

Key Takeaways for Investors

  • Residential strength remains the backbone: steady occupancy (~97%) and base rent growth support AFFO/FFO trajectory despite commercial softness .
  • Commercial risk persists: declining occupancy and co-tenancy clauses (e.g., TJ Maxx) continue to pressure commercial revenues/NOI; watch leasing traction at Preakness and Westwood Plaza .
  • Balance sheet actions are a tangible positive: ~$5.7M loan paydown and ~8.5% fixed rate extension at Westwood Plaza deliver approximately $705K annual debt service savings—freeing cash flow for dividends or capex .
  • Financing milestone ahead: Preakness mortgage extension negotiations (with potential ~$5M paydown) are a near-term catalyst; a definitive agreement would reduce refinancing risk .
  • Dividend momentum: Board raised dividend to $0.10 (+$0.02 QoQ); sustainability hinges on residential NOI stability and executing commercial leasing/financing plans .
  • YoY comparability: Excluding last year’s litigation settlement windfall, 2025 operating trends show modest growth and normalization—focus on NOI and AFFO progress rather than GAAP YoY EPS .
  • Actionable: Monitor Preakness loan outcome, commercial leasing pipeline, and any further dividend action; consider trading around financing headlines and leasing updates given thin sell-side coverage and absence of consensus estimates.

Additional notes:

  • Non-GAAP: AFFO adjusts FFO for straight-line rents and recurring capital improvements; FFO and AFFO are not substitutes for GAAP cash flow; calculations may vary across REITs .
  • Documents read in full: Q3 2025 8-K 2.02 with press release ; Q2 2025 8-K ; Q1 2025 8-K . No Q3 earnings call transcript or other press releases beyond the 8-K press release were found.