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FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY (FREVS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue rose 1.5% year over year to $7.26M, driven by residential rent increases; GAAP EPS was $0.15 vs $0.09 in Q4 2023, with net income aided by lower G&A and higher investment income .
  • Residential fundamentals remained solid (95.9% average occupancy), while commercial occupancy remained weak at 51.0% and continued to drag revenue following the Kmart vacancy at Westwood Plaza .
  • AFFO/share fell to $0.05 from $0.18 in Q3 and $0.21 in Q2 as FFO declined and recurring capex rose; management paid a $0.70 Q4 dividend (including a $0.58 special) and $0.85 for FY2024 .
  • No earnings call transcript or formal guidance were provided; key near‑term catalysts are the special dividend and the resolution of long‑running litigation, while sustained commercial vacancy and refinancing terms remain the primary overhangs .

What Went Well and What Went Wrong

  • What Went Well

    • Residential segment continued to grow: Q4 residential revenue +$327k YoY on higher base rents with 95.9% occupancy; residential NOI increased to ~$3.07M in Q4 (from ~$2.84M) .
    • Cost/income tailwinds to GAAP: G&A fell by ~$215k YoY and investment income rose by ~$147k, supporting EPS expansion to $0.15 in Q4 .
    • Strategic/legal resolution: “FREIT witnessed a favorable settlement of its years‑long litigation… This settlement now allows FREIT to move forward toward its goals unimpeded,” said CEO Robert Hekemian, Jr. .

  • What Went Wrong

    • Commercial softness persisted: Q4 commercial revenue fell ~$223k YoY, largely due to the prior Kmart vacancy at Westwood Plaza; commercial NOI decreased to ~$0.84M from ~$0.88M .
    • AFFO pressure: Q4 AFFO/share declined to $0.05 vs $0.18 in Q3 and $0.21 in Q2 as FFO dropped and recurring residential capital improvements rose (Q4 capex adjustment –$671k vs –$218k in Q3) .
    • Commercial occupancy remains low at 51.0% in Q4 (61.3% in Q4 2023), signaling continued leasing risk and revenue headwinds until backfilling progresses .

Financial Results

Sequential and YoY overview (oldest → newest):

MetricQ2 2024Q3 2024Q4 2024
Total Real Estate Revenues ($M)$7.28 $7.15 $7.26
Net Income Attrib. to Common ($M)$0.53 $14.79 $1.04
GAAP EPS (Basic & Diluted)$0.07 $1.98 $0.15
FFO/Share$0.23 $0.20 $0.14
AFFO/Share$0.21 $0.18 $0.05
Net Income Margin % (calc.)7.3% (0.53/7.28) 206.9% (14.79/7.15) 14.3% (1.04/7.26)

Q4 YoY comparison:

MetricQ4 2023Q4 2024YoY Δ
Total Real Estate Revenues ($M)$7.15 $7.26 +1.5%
GAAP EPS$0.09 $0.15 +$0.06
AFFO/Share$0.17 $0.05 –$0.12
Residential Occupancy95.9% 95.9% Flat
Commercial Occupancy61.3% 51.0% –10.3 pp

Segment revenue and NOI:

SegmentQ2 2024 Revenue ($K)Q3 2024 Revenue ($K)Q4 2024 Revenue ($K)Q2 2024 NOI ($K)Q3 2024 NOI ($K)Q4 2024 NOI ($K)
Residential5,221 5,320 5,313 2,948 3,101 3,067
Commercial2,054 1,827 1,944 817 756 842
Total7,275 7,147 7,257 ———

Segment NOI margins (calc.):

SegmentQ2 2024Q3 2024Q4 2024
Residential NOI Margin %56.5% (2,948/5,221) 58.3% (3,101/5,320) 57.7% (3,067/5,313)
Commercial NOI Margin %39.8% (817/2,054) 41.4% (756/1,827) 43.3% (842/1,944)

KPIs:

KPIQ2 2024Q3 2024Q4 2024
Residential Occupancy96.5% 96.8% 95.9%
Commercial Occupancy50.7% 51.8% 51.0%
Dividends/Share$0.05 $0.05 $0.70 (incl. $0.58 special)

Guidance Changes

No formal financial guidance (revenue, margins, OpEx, tax, or segment) was issued for Q4 2024. Management stated the Board will continue to evaluate dividends quarterly; Q4 included a $0.12 regular dividend and a $0.58 special dividend paid December 13, 2024 .

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal Financial GuidanceFY/Q4 2024None None Maintained (no guidance)
Dividend (Common)Q4 2024Evaluated quarterly $0.70 (incl. $0.58 special); total FY24 dividends $0.85 Raised (special)

Earnings Call Themes & Trends

Note: No earnings call transcript was available for Q4 2024; themes reflect management disclosures in earnings releases.

TopicPrevious Mentions (Q2, Q3)Current Period (Q4)Trend
Litigation and one‑time settlementQ2: Higher G&A from litigation; Q3: Settlement recognized ($15.7M net, FREIT share ~$14.1M) lifting EPS/NI CEO: “favorable settlement… allows FREIT to move forward unimpeded” Resolved; supportive to balance sheet and flexibility
Residential fundamentalsQ2/Q3: Rent growth across most properties, high occupancy (96.5–96.8%) supporting NOI Continued rent growth with 95.9% occupancy; res NOI ~$3.07M Stable to strong
Commercial headwinds (Westwood Plaza/Kmart)Q2/Q3: Commercial revenue down; significant impact from Kmart vacancy Q4 commercial revenue –$223k YoY; commercial occupancy 51.0% Persistent headwind; gradual stabilization
Financing and ratesQ2: River Edge loan extended to 2027 at 6.75% (P&I ~$58,016/mo) Q4: Middletown loan extended to 2027 at 6.05% (P&I ~$84,521/mo) Laddered extensions; modest rate improvement
Capital allocation/dividendsQ2/Q3: $0.05 quarterly dividends Q4: $0.70 dividend including $0.58 special from cash reserves; FY total $0.85 One‑time capital return; ongoing quarterly evaluation

Management Commentary

  • “We are pleased that over this past fiscal year FREIT witnessed a favorable settlement of its years-long litigation… This settlement now allows FREIT to move forward toward its goals unimpeded.” — Robert Hekemian, Jr., CEO .
  • CEO added he is “very pleased about the continuing increasing cash flow being generated by our residential properties.” .

Q&A Highlights

No earnings call transcript or Q&A was filed or found for Q4 2024 .

Estimates Context

  • Wall Street consensus (S&P Global Capital IQ) for Q4 2024 EPS and revenue was not available for FREVS at the time of analysis; therefore, we cannot assess a beat/miss vs estimates. We attempted to retrieve S&P Global estimates but were unable to obtain data for this quarter (API limit encountered) [GetEstimates error].

Key Takeaways for Investors

  • Residential strength remains the core earnings driver; NOI and occupancy are resilient, supporting underlying cash flows even as commercial lags .
  • Commercial remains the swing factor: Backfilling the Westwood Plaza anchor and lifting 51% portfolio commercial occupancy are critical to restoring segment revenue growth and stabilizing AFFO .
  • AFFO dipped in Q4 on lower FFO and higher recurring capex; watch cadence of capex and any steps to moderate spend relative to rental growth to support dividend capacity ex‑specials .
  • Balance sheet/financing visibility improved: extensions at River Edge (6.75% to 2027) and Middletown (6.05% to 2027) reduce near‑term refinancing risk; monitor rates and amortization impact on cash flows .
  • Capital return: The $0.58 special dividend (total Q4 $0.70; FY $0.85) reflects cash reserves post‑settlement; future dividends remain at Board discretion with no assurance of recurrence .
  • With no formal guidance and no consensus estimates, near‑term stock reaction tends to hinge on leasing updates (commercial backfill), recurring AFFO trajectory, and additional capital allocation disclosures .
Sources: 
- Q4 2024 8‑K/Press Release (Jan 29, 2025): **[36840_0001174947-25-000072_ex99-1.htm:0]** **[36840_0001174947-25-000072_ex99-1.htm:1]** **[36840_0001174947-25-000072_ex99-1.htm:2]** **[36840_0001174947-25-000072_ex99-1.htm:3]** **[36840_0001174947-25-000072_ex99-1.htm:4]** **[36840_0001174947-25-000072_ex99-1.htm:5]** **[36840_0001174947-25-000072_form8k-33377_frevs.htm:0]** **[36840_0001174947-25-000072_form8k-33377_frevs.htm:1]** **[36840_0001174947-25-000072_form8k-33377_frevs.htm:2]** 
- Q3 2024 8‑K/Press Release (Sep 13, 2024): **[36840_0001174947-24-001061_ex99-1.htm:0]** **[36840_0001174947-24-001061_ex99-1.htm:1]** **[36840_0001174947-24-001061_ex99-1.htm:2]** **[36840_0001174947-24-001061_ex99-1.htm:3]** **[36840_0001174947-24-001061_ex99-1.htm:4]** **[36840_0001174947-24-001061_ex99-1.htm:5]** **[36840_0001174947-24-001061_form8k-32828_frevs.htm:0]** **[36840_0001174947-24-001061_form8k-32828_frevs.htm:1]** **[36840_0001174947-24-001061_form8k-32828_frevs.htm:2]** 
- Q2 2024 8‑K/Press Release (Jun 14, 2024): **[36840_0001174947-24-000840_ex99-1.htm:0]** **[36840_0001174947-24-000840_ex99-1.htm:1]** **[36840_0001174947-24-000840_ex99-1.htm:2]** **[36840_0001174947-24-000840_ex99-1.htm:3]** **[36840_0001174947-24-000840_ex99-1.htm:4]** **[36840_0001174947-24-000840_form8k-32425_frevs.htm:0]** **[36840_0001174947-24-000840_form8k-32425_frevs.htm:1]** **[36840_0001174947-24-000840_form8k-32425_frevs.htm:2]**