FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-K)

Cautionary Statement Identifying Important Factors That Could Cause FREIT's Actual Results to Differ From Those Projected in Forward Looking Statements.

Readers of this discussion are advised that the discussion should be read in
conjunction with the consolidated financial statements of FREIT (including
related notes thereto) appearing elsewhere in this Form 10-K. Certain statements
in this discussion may constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements reflect FREIT's current expectations and are based on estimates,
projections, beliefs, data, methods and assumptions of management of FREIT at
the time of such statements regarding future results of operations, economic
performance, financial condition and achievements of FREIT, and do not relate
strictly to historical or current facts. These forward-looking statements are
identified through the use of words such as "believe," "expect," "anticipate,"
"intend," "plan," "estimate," or words of similar meaning. Forward-looking
statements involve risks and uncertainties in predicting future results and
conditions.

Although FREIT believes that the expectations reflected in such forward-looking
statements are based on reasonable assumptions, such statements are subject to
risks and uncertainties, which may cause the actual results to differ materially
from those projected. Such factors include, but are not limited to the
following: general economic and business conditions, including the purchase of
retail products over the Internet, which will, among other things, affect demand
for rental space, the availability of prospective tenants, lease rents, the
financial condition of tenants and the default rate on leases, operating and
administrative expenses and the availability of financing; adverse changes in
FREIT's real estate markets, including, among other things, competition with
other real estate owners, competition confronted by tenants at FREIT's
commercial properties, governmental actions and initiatives;
environmental/safety requirements; risks of real estate development and
acquisitions; and on-going negative effects of the COVID-19 pandemic on our
properties and tenants, and generally on our real estate assets and the real
estate markets in which we operate, and the global, U.S. and local economies
(see Special Note below). The risks with respect to the development of real
estate include: increased construction costs, inability to obtain construction
financing, or unfavorable terms of financing that may be available, unforeseen
construction delays and the failure to complete construction within budget.

Special Note Regarding the COVID-19 Pandemic:

On March 11, 2020, the World Health Organization declared the outbreak of the
novel coronavirus, known as COVID-19 ("COVID-19"), a pandemic. The full extent
of the effects of the COVID-19 pandemic, including the full extent of its
effects on the global, U.S., and local economies, and on FREIT and our business,
operating results, financial condition, properties, and tenants, cannot yet be
known. Any future developments in this regard will be highly uncertain and
cannot be predicted with any certainty, including the scope and duration of the
pandemic, actions taken by governmental authorities and other third parties in
response to the pandemic and the effects thereof, and the other factors
discussed above and throughout this report. The uncertain future development of
the COVID-19 pandemic could materially and adversely further affect FREIT and
our business, operating results, financial condition, liquidity, and our
properties and tenants.



OVERVIEW

FREIT is an equity real estate investment trust ("REIT") that is
self-administered and externally managed. FREIT owns a portfolio of residential
apartment and commercial properties. FREIT's revenues consist primarily of
rental income and other related revenues from its residential and commercial
properties and additional rent in the form of expense reimbursements derived
from operating commercial properties. FREIT's properties are primarily located
in northern New Jersey, Maryland and New York.

COVID-19 Pandemic: The international spread of COVID-19 was declared a global
pandemic by the World Health Organization on March 11, 2020. The extent to which
this pandemic could continue to affect our financial condition, liquidity, and
results of operations is difficult to predict and depends on evolving factors,
including: duration, scope, government actions, and other social responses. Many
states in the U.S., including New Jersey, New York and Maryland, where our
properties are located, implemented stay-at-home and shutdown orders for all
"non-essential" business and activity in an aggressive effort to mitigate the
spread of COVID-19. While some of these orders had been fully or partially
lifted from earlier this year, the U.S. is experiencing a second wave of this
pandemic. Many of our commercial tenants have not been able to open or resume
operations at full capacity due to continued restrictions imposed upon them. As
the impact of the pandemic has been evolving, it continues to cause uncertainty
and volatility in the financial markets. Many U.S. industries and businesses
have been negatively affected and millions of people have filed for unemployment
resulting in the U.S. unemployment rate rising to 14.7% in April 2020, which was
the highest recorded rate since the Great Depression. Since April 2020, the U.S
unemployment rate has declined to 6.9% as of October 2020, as many businesses
continue to reopen and rehire employees following many of the COVID-19 mandated
shutdown orders. However, the jobless rate remains well above the pre-pandemic
levels of about 3.5%. The COVID-19 pandemic and the actions taken by
individuals, businesses and government authorities to reduce its spread have
caused substantial lost business revenue, changes in consumer behavior and large
reductions in liquidity and fair value of many assets. These and other adverse
conditions that may unfold in the future are expected to continue until such
time as government shutdown orders are fully lifted, and business operations and

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commercial activity can fully resume. The lifting of all government shutdown
orders cannot be predicted with any certainty. Further, even after such orders
are fully lifted, the resumption of business operations and commercial activity
will depend on several factors, including prevailing sentiments among workers
and consumers regarding the safety of resuming public activity, and cannot be
predicted with any certainty.

Despite the COVID-19 pandemic and preventive measures taken to mitigate the
spread, our residential properties continue to generate cash flow. With the
exception of the Icon at the Rotunda property, the annual average occupancy
rates were approximately 93.9% or higher for the fiscal year ended October 31,
2020. The tenants at these properties, for the most part, continue to pay their
rent. The occupancy rate at the Icon has declined to an average occupancy rate
of 91.5% for the fiscal year ended October 31, 2020 as compared to 95.1% for the
fiscal year ended October 31, 2019. This decline in occupancy rate is primarily
attributed to tenants attending Johns Hopkins University, which is in close
proximity to the Icon. Approximately 30% of our tenants at this property attend
Johns Hopkins University. In response to the COVID-19 pandemic, Johns Hopkins
University only offered online classes for the fall semester which resulted in a
loss of these tenants at our property.

At our commercial properties, with the exception of grocery stores and other
"essential" businesses, many of our retail tenants have been and continue to be
adversely affected by the mandated shutdowns or continued imposed restrictions.
The overall average cash realization for the commercial properties, based on
monthly billings as compared to monthly cash collections from April through
October 2020, was approximately 74%. The Company is closely monitoring changes
in the collectability assessment of its tenant receivables as a result of
certain tenants suffering adverse financial consequences related to the COVID-19
pandemic. During the fiscal year ended October 31, 2020, rental revenue deemed
uncollectible of approximately $1.4 million (with a consolidated impact to FREIT
of approximately $0.9 million) was classified as a reduction in rental revenue
based on our assessment of the probability of collecting substantially all of
the remaining rents for certain tenants. Additionally, FREIT incurred an
increase in expense for the reserve of uncollectible rents of approximately $0.3
million (with a consolidated impact to FREIT of approximately $0.2 million) for
the year ended October 31, 2020. As of October 31, 2020, FREIT has applied
approximately $387,000 of security deposits from its commercial tenants to
outstanding receivables due. On a case by case basis, FREIT has offered some
commercial tenants deferrals of rent and rent abatements over a specified time
period totaling approximately $206,000 and $238,000, respectively, (with a
consolidated impact to FREIT of approximately $192,000 and $156,000,
respectively) through fiscal year ended October 31, 2020. FREIT currently
remains in active discussions and negotiations with these impacted retail
tenants. Additionally, Cobb Theatre, an anchor tenant movie theatre at the
Rotunda retail property filed for bankruptcy and rejected its lease at the
Rotunda property as of June 30, 2020. As a result of the rejection of this
lease, uncollected rents in the amount of approximately $0.3 million and a
straight-line rent receivable of approximately $0.4 million were reversed
against revenue, and unamortized leasing commissions in the amount of
approximately $0.2 million were written off and fully expensed in Fiscal 2020
resulting in a net impact of approximately $0.9 million (with a consolidated
impact to FREIT of approximately $0.5 million) to net income for the year ended
October 31, 2020. Tenant improvements related to the Cobb Theatre with a net
book value of approximately $7.3 million (with a consolidated impact to FREIT of
approximately $4.4 million) as of October 31, 2020 were deemed to be impaired,
written off and charged to operations in the consolidated statement of income
for the fiscal year ended October 31, 2020. Until this space is re-leased,
FREIT's operating results will be adversely impacted from loss of base rent and
additional rent of approximately $1.1 million (with a consolidated impact to
FREIT of approximately $0.7 million) on an annualized basis. (see Note 16 for
additional details).

As a result of the negative impact of the COVID-19 pandemic at our commercial
properties, we were granted debt payment relief from certain of our lenders on
the retail properties in the form of deferral of principal and/or interest
payments for a three-month period, resulting in total deferred payments of
approximately $1,013,000, which will become due at the maturity of the loans. As
of October 31, 2020, approximately $162,000 of this amount has been repaid,
there will be no further deferrals of principal and/or interest payments on
these loans and the balance due has been included in mortgages payable on the
consolidated balance sheet as of October 31, 2020. (See Note 5 for additional
details).

During Fiscal 2020, we have experienced a positive cash flow from operations,
excluding corporate expenses such as Special Committee third party advisory,
legal and other expenses paid of approximately $5.1 million and deferred
compensation in the amount of $5 million paid to two retired trustees. This
could change based on the duration of the pandemic, which is uncertain. We
believe that our cash balance as of October 31, 2020 of approximately $36.9
million coupled with a $13 million available line of credit (available through
October 31, 2023, see Note 5) will provide us with sufficient liquidity for at
least the next twelve months from the filing of this Form 10-K. In an effort to
further preserve cash flow, the Board of Trustees reduced all fees, salaries and
retainers payable to our executive officers and members of the Board of Trustees
by up to 30% from May 1, 2020 through the end of Fiscal 2020. Additionally, in
an effort to keep costs lower while the Company has experienced a loss of
revenues at the commercial properties and to adjust to the difficulty in hiring
contractors due to these imposed COVID-19 restrictions and mandates, the Company
has deferred non-essential maintenance projects across all properties during
Fiscal 2020. This has resulted in a cost savings of approximately $1.1 million
(with a consolidated impact to FREIT of approximately $0.8 million) across the
entire FREIT portfolio as compared to Fiscal 2019.

The extent of the effects of COVID-19 on our business, results of operations,
cash flows, value of our real estate assets and growth prospects is highly
uncertain and will ultimately depend on future developments, none of which can
be predicted with any certainty. (See "Item 1A. Risk Factors" for additional
details.) However, we believe the actions we have taken and

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continue to take will help minimize interruptions to our operations and will put
us in the best position to participate in the economic recovery as the recovery
occurs. FREIT will continue to actively monitor the effects of the pandemic,
including governmental directives in the jurisdictions in which we operate and
the recommendations of public health authorities, and will, as needed, take
further measures to adapt our business in the best interests of our shareholders
and personnel.

Residential Properties: While our residential properties continue to generate
positive cash flow, the impact COVID-19 may have on these properties over the
next year is uncertain and will depend on the duration of the pandemic and the
recovery of the economy.

Commercial Properties: There continues to be uncertainty in the retail
environment that could have an adverse impact on FREIT's retail tenants, which
could have an adverse impact on FREIT. As restrictions continue to evolve, the
impact COVID-19 may have on the operating and financial performance of our
commercial properties over the next year is currently uncertain and will depend
on certain developments, including, among others, the impact of COVID-19 on our
tenants and the magnitude and duration of the pandemic, including its impact on
store closing and social distancing rules which may impact a tenant's ability to
generate sales at sufficient levels to cover operating costs, including rent.

Burlington Coat Factory, which does business as a retail tenant at the Westridge
Square Shopping Center located in Frederick, Maryland, has not exercised its
option to renew its lease which is set to expire on November 30, 2021 (in Fiscal
2022). FREIT's operating results will be adversely impacted by the loss of base
rent and additional rent of approximately $1 million on an annualized basis from
this tenant. The Company is currently engaged in discussions with another tenant
for this space; however, there can be no assurances that a new lease will be
entered into with this prospective tenant.

Special Committee: On March 28, 2019, FREIT announced that its Board had
established a Special Committee to explore strategic alternatives focusing on
maximizing shareholder value. The Special Committee was comprised solely of
independent Trustees and was charged with exploring potential strategic
transactions involving FREIT, including, without limitation, a potential sale of
FREIT, a business combination involving FREIT or other alternatives for
maximizing shareholder value, and determining whether a potential strategic
transaction was in the best interests of FREIT and its shareholders. The members
of the Special Committee were Ronald J. Artinian, Richard J. Aslanian, David F.
McBride and Justin F. Meng, who served as the Chairman of the Special Committee.
The Special Committee approved a transaction to sell six (6) apartment
properties which was not completed. (See Note 14 of FREIT's consolidated
financial statements for further details). On May 7, 2020, the Board approved
the elimination of the Special Committee as a committee of the Board.

Termination of Purchase and Sale Agreement: On January 14, 2020, FREIT and
certain of its affiliates (collectively, the "Sellers"), entered into a Purchase
and Sale Agreement (as subsequently amended, the "Purchase and Sale Agreement")
with Sinatra Properties LLC (the "Purchaser"), which as subsequently amended,
provided for the sale by the Sellers to the Purchaser of 100% of the Sellers'
ownership interests in six real properties held by the Sellers in exchange for
the purchase price described therein, subject to the terms and conditions of the
Purchase and Sale Agreement. On April 30, 2020, the Sellers delivered written
notice to the Purchaser of the Sellers' termination of the Purchase and Sale
Agreement in accordance with its terms due to the occurrence of a "Purchaser
Default" thereunder, based on the Purchaser's failure to perform its obligations
under the Purchase and Sale Agreement and close the transactions contemplated
therein.

Upon the execution of the Purchase and Sale Agreement, the Purchaser delivered
into escrow a deposit in the amount of $15 million (the "Deposit"), in the form
of an unconditional, irrevocable letter of credit in such amount (the "Letter of
Credit"). The Purchase and Sale Agreement provides that the Sellers' exclusive
remedy, in the event of a "Purchaser Default" and the termination of the
Purchase and Sale Agreement, is the forfeiture of the Deposit to the Sellers as
liquidated damages. Accordingly, contemporaneously with the Sellers' delivery of
the termination notice to the Purchaser, the Sellers delivered written notice to
the escrow agent requesting that the escrow agent release the Letter of Credit
from escrow and deliver same to the Sellers.

On May 6, 2020, the Purchaser filed a complaint (the "Complaint") against the
Sellers in the Superior Court of New Jersey, in which, among other things, the
Purchaser alleges breach of contract and breach of the covenant of good faith
and fair dealing against the Sellers in connection with the Sellers' termination
of the Purchase and Sale Agreement. The Purchaser seeks (a) a judgment of
specific performance compelling the Sellers to convey the properties under the
Purchase and Sale Agreement to the Purchaser; (b) declaratory judgment from the
court that (i) the Purchase and Sale Agreement is not terminated, (ii) the
Purchaser is not in default under the Purchase and Sale Agreement, and (iii) the
Sellers are in default under the Purchase and Sale Agreement, subject to a right
to cure; (c) an order for injunctive relief compelling the Sellers to perform
the Purchase and Sale Agreement; (d) in the event that the court does not order
specific performance, a judgment directing that the Purchaser's $15 million
deposit under the Purchase and Sale Agreement be returned to the Purchaser, and
compensatory, consequential and incidental damages in an amount to be determined
at trial; and (e) attorneys' fees and costs.

On June 17, 2020, the Sellers filed their answer, separate defenses, and
counterclaims (the "Answer") in response to the Complaint, in which, among other
things, the Sellers (a) deny the Purchaser's claim that the Sellers' termination
of the Purchase and Sale Agreement was wrongful, and assert that there was no
contractual basis in the Purchase and Sale Agreement to relieve the Purchaser
from its obligation to perform thereunder, or to defer or postpone the
Purchaser's obligation to perform, (b) assert certain defenses to the
allegations set forth in the Complaint without admitting any liability,

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and (c) request relief from the Court in the form of (i) judgment in the Sellers' favor dismissing all of the Purchaser's claims against them with prejudice and denying all of the Purchaser's requests for relief, (ii) reasonable attorneys' fees and costs, and (iii) such other and further relief as the Court deems just.

In addition, the Answer asserts counterclaims by the Sellers against the
Purchaser for breach of contract due to the Purchaser's failure to close the
Purchase and Sale Agreement in accordance with its terms, and the Sellers seek a
declaratory judgment from the Court that the Sellers properly terminated the
Purchase and Sale Agreement in accordance with its terms due to the Purchaser's
default and an order from the Court that the Purchaser authorize the escrow
agent to release the $15 million deposit under the Purchase and Sale Agreement
to the Sellers.

In connection with these counterclaims, the Answer seeks the following relief
from the Court: (a) liquidated damages in the amount of $15 million, as provided
in the Purchase and Sale Agreement; (b) in the alternative to the liquidated
damages provided for in the Purchase and Sale Agreement, money damages in an
amount to be determined at trial; (c) interest, attorneys' fees and costs
associated with the defense of the Purchaser's claims and the prosecution of the
Sellers' counterclaims against the Purchaser, as provided for in the Purchase
and Sale Agreement; (d) judgment declaring that the Sellers properly terminated
the Purchase and Sale Agreement due to the Purchaser's default thereunder; (e)
judgment declaring that the Purchaser must authorize the escrow agent to release
the $15 million deposit to the Sellers; and (f) such other relief as the Court
deems just and equitable.

As of the year ended October 31, 2020, the $15 million deposit has not been included in income in the accompanying consolidated statement of income. (See Note 14 to FREIT's consolidated financial statements for further details.)

Termination of Plan of Liquidation: On January 14, 2020, the Trust's Board of
Trustees adopted a Plan of Voluntary Liquidation with respect to the Trust (the
"Plan of Liquidation"), which provided for the voluntary dissolution,
termination and liquidation of the Trust by the sale, conveyance, transfer or
delivery of all of the Trust's remaining assets in accordance with the terms and
conditions of the Plan of Liquidation and the Internal Revenue Code of 1986, as
amended, and the Treasury regulations thereunder. The Plan of Liquidation
provided that it would become effective upon (i) approval by a majority of the
votes cast by Trust's shareholders present in person or represented by proxy at
a duly called meeting of the Trust's shareholders at which a quorum is present
and (ii) the consummation of the transactions contemplated by the Purchase and
Sale Agreement.

While the Plan of Liquidation received shareholder approval, the Plan of
Liquidation did not become effective as the Trust terminated the Purchase and
Sale Agreement by written notice delivered to the Purchaser on April 30, 2020,
and the transactions contemplated thereby were not consummated. Accordingly the
Trust did not proceed with the sale, conveyance, transfer or delivery of all of
the Trust's remaining assets as contemplated by the Plan of Liquidation that was
adopted by the Board on January 14, 2020. (See Note 15 to FREIT's consolidated
financial statements for further details.)

Amendment to Management Agreement: On January 14, 2020, in connection with
entering into the Purchase and Sale Agreement, FREIT and Hekemian entered into a
First Amendment to Management Agreement (the "First Amendment"), which amends
the Management Agreement dated as of November 1, 2001 between FREIT and
Hekemian. The First Amendment would become effective if, and only if, the Plan
of Liquidation became effective. Since the Plan of Liquidation will not become
effective due to the termination of the Purchase and Sale Agreement, the First
Amendment will not become effective. (See Note 8 to FREIT's consolidated
financial statements for further details.)

Debt Financing Availability: Financing has been available to FREIT and its affiliates. The lis pendens filed in connection with the legal proceeding between FREIT and certain of its affiliates and Sinatra Properties, LLC may adversely affect FREIT's ability to refinance certain of its residential properties.

On February 7, 2018, Grande Rotunda, LLC ("Grande Rotunda") refinanced its
$115.3 million construction loan held by Wells Fargo with a new loan held by
Aareal Capital Corporation in the amount of approximately $118.5 million with
additional funding available through February 6, 2021 for retail tenant
improvements and leasing costs in the amount of $3,380,000. This refinancing
paid off the loan previously held by Wells Fargo, funded loan closing costs and
paid the amount due to Hekemian Development Resources for a development fee of
$900,000 plus accrued interest of approximately $45,000 (See Note 8 to FREIT's
consolidated financial statements for further details on this fee). This loan is
secured by the Rotunda property, bears a floating interest rate at 285 basis
points over the one-month LIBOR rate and has a maturity date of February 6, 2021
with two one-year renewal options to extend the maturity of this loan, subject
to certain requirements as provided for in the loan agreement. As part of this
transaction, Grande Rotunda purchased an interest rate cap on LIBOR for the full
amount that can be drawn on this loan of $121.9 million, capping the one-month
LIBOR rate at 3% for the first two years of this loan which matured on March 5,
2020. On February 28, 2020, Grande Rotunda purchased an interest rate cap on
LIBOR, with an effective date of March 5, 2020, for the full amount that can be
drawn on this loan of $121.9 million, capping the one-month LIBOR rate at 3% for
one year. As of October 31, 2020, approximately $118.5 million of this loan
facility was drawn down and the interest rate was approximately 2.99%. On
November 5, 2020, Grande Rotunda elected to exercise the first extension option
on this loan to extend the initial maturity date from February 6, 2021 until
February 6, 2022. In order to extend the maturity due date Grande Rotunda must
satisfy the following conditions: (a) pay to lender an extension fee of 0.2% of
the extended loan balance; (b) certify that no default or events of default
exist; (c) extend the interest rate cap to expire on

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February 6, 2022; and (d) allow lender to obtain an updated appraisal of the
property. The principal balance of the amount of the loan to be extended must
not exceed a loan-to-value of 62.5%. To the extent the loan-to-value exceeds the
62.5% limit, the loan must be brought in to balance via a loan reduction or by
other means satisfactory to the Lender. Management expects the loan to be
extended, however, until such time as a definitive agreement providing for a
modification and extension of the loan is entered into, there can be no
assurance the loan will be modified and extended. (See Notes 5 and 6 to FREIT's
consolidated financial statements for further details).

On September 30, 2020, Westwood Hills, LLC ("Westwood Hills"), a consolidated
subsidiary, refinanced its $19.2 million loan (which would have matured on
November 1, 2020) with a new loan held by ConnectOne Bank in the amount of
$25,000,000, with additional funding available in the amount of $250,000 for
legal fees potentially incurred by the lender related to the lis pendens on this
property. (See Note 14 to FREIT's consolidated financial statements for
additional details.) This loan, secured by an apartment building in Westwood,
New Jersey, is interest-only based on a floating rate at 400 basis points over
the one-month LIBOR rate with a floor of 4.15% and has a maturity date of
October 1, 2022 with the option of Westwood Hills to extend for two (2)
additional six (6)-month periods from the maturity date, subject to certain
provisions of the loan agreement. This refinancing resulted in: (i) a change in
the annual interest rate from a fixed rate of 4.62% to a variable rate with a
floor of 4.15% and (ii) net refinancing proceeds of approximately $5.6 million
that were distributed to the partners in Westwood Hills with FREIT receiving
approximately $2.2 million based on its 40% membership interest in Westwood
Hills. As of October 31, 2020, approximately $25,000,000 of this loan was drawn
and outstanding. (See Note 5 to FREIT's consolidated financial statements for
additional details.)

On August 26, 2019, Berdan Court, LLC ("Berdan Court"), (owned 100% by FREIT),
refinanced its $17 million loan (which matured on September 1, 2019) with the
lender in the amount of $28,815,000. This loan, secured by an apartment building
located in Wayne, New Jersey, has a term of ten years and bears a fixed interest
rate equal to 3.54%. Interest-only payments are required each month for the
first five years of the term and thereafter, principal payments plus accrued
interest will be required each month through maturity. This refinancing resulted
in: (i) a reduction in the annual interest rate from a fixed rate of 6.09% to a
fixed rate of 3.54% and (ii) net refinancing proceeds of approximately $11.6
million which can be used for capital expenditures and general corporate
purposes. (See Note 5 to FREIT's consolidated financial statements for
additional details.)

On April 3, 2019, WestFREIT, Corp. (owned 100% by FREIT) exercised its option to
extend its loan held by M&T Bank, with a then outstanding balance of
approximately $22.5 million, for twelve months. Effective beginning on June 1,
2019, the extension of this loan, secured by the Westridge Square shopping
center, required monthly principal payments of $47,250 plus interest based on a
floating interest rate equal to 240 basis points over the one-month LIBOR and
had a maturity date of May 1, 2020 which was extended to November 1, 2020. This
loan has been further extended with a new maturity date of January 31, 2021
under the same terms and conditions of the existing agreement while the lender
is in discussions with the Company regarding a further modification and
extension of this loan. Management expects the loan to be extended, however,
until such time as a definitive agreement providing for a modification and
extension of the loan is entered into, there can be no assurance the loan will
be modified and extended. (See Note 5 to FREIT's consolidated financial
statements for additional details.)

FREIT's revolving line of credit provided by the Provident Bank was renewed for
a three-year term ending on October 31, 2023. Draws against the credit line can
be used for working capital needs and standby letters of credit. Draws against
the credit line are secured by mortgages on FREIT's Franklin Crossing Shopping
Center in Franklin Lakes, New Jersey and retail space in Glen Rock, New Jersey.
The total line of credit is $13 million and the interest rate on the amount
outstanding is based on a floating interest rate of prime minus 25 basis points
with a floor of 3.75%. As of October 31, 2020, there was no amount outstanding
and $13 million was available under the line of credit. (See Note 5 to FREIT's
consolidated financial statements for additional details.)

In accordance with the loan agreement for each of the loans described above,
FREIT may be required to meet or maintain certain financial covenants throughout
the term of the loan.

Operating Cash Flow: FREIT expects that cash provided by operating activities
will be adequate to cover mandatory debt service payments (including payments of
interest, but excluding balloon payments), real estate taxes, recurring capital
improvements at its properties and other needs to maintain its status as a REIT
for at least a period of one year from the date of filing of this Form 10K
report.

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SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

Pursuant to the SEC disclosure guidance for "Critical Accounting Policies," the
SEC defines Critical Accounting Policies as those that require the application
of management's most difficult, subjective, or complex judgments, often
because of the need to make estimates about the effect of matters that are
inherently uncertain and may change in subsequent periods.

Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, the preparation of which
takes into account estimates based on judgments and assumptions that affect
certain amounts and disclosures. Accordingly, actual results could differ from
these estimates. The accounting policies and estimates used, which are outlined
in Note 1 to our Consolidated Financial Statements which is presented elsewhere
in this Form 10-K, have been applied consistently as of October 31, 2020 and
2019, and for the years ended October 31, 2020, 2019 and 2018. We believe that
the following accounting policies or estimates require the application of
management's most difficult, subjective, or complex judgments:

Revenue Recognition: Base rents, additional rents based on tenants' sales
volume and reimbursement of the tenants' share of certain operating
expenses are generally recognized when due from tenants. The straight-line basis
is used to recognize base rents under leases if they provide for varying rents
over the lease terms. Straight-line rents represent unbilled rents receivable to
the extent straight-line rents exceed current rents billed in accordance with
lease agreements. Before FREIT can recognize revenue, it is required to assess,
among other things, its collectability.

Valuation of Long-Lived Assets: FREIT assesses the carrying value of long-lived
assets periodically, or whenever events or changes in circumstances indicate
that the carrying amounts of certain assets may not be recoverable. When FREIT
determines that the carrying value of long-lived assets may be impaired, the
measurement of any impairment is based on a projected discounted cash flow
method determined by FREIT's management. While we believe that our
discounted cash flow methods are reasonable, different assumptions regarding
such cash flows may significantly affect the measurement of impairment.

Real Estate Development Costs: It is FREIT's policy to capitalize
pre-development costs, which generally include legal and professional fees and
other directly related third-party costs. Real estate taxes and interest costs
incurred during the development and construction phases are also capitalized.
FREIT ceases capitalization of these costs when the project or portion thereof
becomes operational, or when construction has been postponed. In the event of
postponement, capitalization of these costs will recommence once construction on
the project resumes.

See Note 1 to FREIT's consolidated financial statements for recently issued accounting standards.

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Results of Operations:

Fiscal Years Ended October 31, 2020 and 2019

Summary revenues and net income for the fiscal years ended October 31, 2020 ("Fiscal 2020") and October 31, 2019 ("Fiscal 2019") are as follows:

                                     Years Ended October 31,
                                2020             2019         Change
                            (in thousands, except per share amounts)
Real estate revenues:
Commercial properties      $       24,089      $  27,122     $  (3,033 )
Residential properties             28,638         33,155        (4,517 )
Total real estate
revenues                           52,727         60,277        (7,550 )

Operating expenses:
Real estate operating
expenses                           22,922         26,062        (3,140 )
Special Committee third
party advisory, legal
and other expenses                  4,606          1,416         3,190
General and
administrative                      3,821          2,633         1,188
Depreciation                       10,341         11,339          (998 )
Tenant improvement
write-off due to
COVID-19                            7,277              -         7,277
Total operating expenses           48,967         41,450         7,517

Operating income                    3,760         18,827       (15,067 )

Investment income                     204            360          (156 )
Unrealized (loss) gain
on interest rate cap
contract                                -           (160 )         160
Gain on sale of property                -            836          (836 )
Gain on deconsolidation
of subsidiary                      27,680              -        27,680
Loss on investment in
tenancy-in-common                    (202 )            -          (202 )
Financing costs                   (14,122 )      (18,070 )       3,948
Net income                         17,320          1,793        15,527

Net loss (income)
attributable to
noncontrolling
interests in
subsidiaries                        3,233             (6 )       3,239
Net income attributable
to common equity           $       20,553      $   1,787     $  18,766

Earnings per share -
basic and diluted:         $         2.94      $    0.26     $    2.68

Weighted average shares
outstanding:
Basic                               6,992          6,940
Diluted                             6,994          6,940


Real estate revenue for Fiscal 2020 decreased 12.5% to $52,727,000 compared to
$60,277,000 for Fiscal 2019. The decline in revenue was primarily attributable
to the following: (a) a decline in revenue of approximately $5 million resulting
from the deconsolidation of the operating results of the Pierre Towers property
from FREIT's operating results due to the conversion to a TIC as of February 28,
2020; (b) a reduction in total revenue in the amount of approximately $1.1
million, which includes the write-off of straight-line rent in the amount of
approximately $0.4 million, as compared to Fiscal 2019 due to the rejection of
the lease for the Cobb Theatre at the Rotunda retail property as of June 30,
2020 resulting from the Cobb Theatre bankruptcy filing; (c) a reduction in total
revenue in the amount of approximately $1.4 million as compared to Fiscal 2019
due to rental revenue being deemed uncollectible and classified as a reduction
in rental revenue primarily attributed to commercial tenants suffering adverse
financial consequences as a result of the COVID-19 pandemic; (d) a decline in
total revenue of approximately $0.4 million driven by a decline in the annual
average occupancy rate for the commercial properties from 81.5% in Fiscal 2019
to 79.7% in Fiscal 2020; (e) a decrease in revenue of approximately $0.2 million
attributed to commercial rent abatements resulting from the COVID-19 pandemic;
offset by (f) an increase in the residential segment of approximately $0.5
million driven by insurance reimbursements received in Fiscal 2020 related to a
fire at each of the Pierre Towers and Icon properties and an increase in base
rent at most of these properties.

Net income attributable to common equity ("net income-common equity") for Fiscal
2020 was $20,553,000 ($2.94 per share basic and diluted), compared to $1,787,000
($0.26 per share basic and diluted) for Fiscal 2019 primarily as a result of the
non-cash gain on the deconsolidation of a subsidiary (See Note 17 to FREIT's
consolidated financial statements for additional details).

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The schedule below provides a non-GAAP detailed analysis of the major changes
that impacted revenue and net income-common equity for Fiscal 2020 and Fiscal
2019:

NON-GAAP NET INCOME COMPONENTS

                                 Years Ended October 31,
                             2020          2019         Change
                                  (thousands of dollars)
Income from real estate operations:
Commercial properties      $  12,755     $  15,427     $ (2,672 )
Residential properties        17,050        18,788       (1,738 )
Total income from real
estate operations             29,805        34,215       (4,410 )

Financing costs:
Fixed rate mortgages          (7,401 )      (8,953 )      1,552
Floating rate mortgages       (5,303 )      (7,384 )      2,081
Other - Corporate
interest                        (329 )        (594 )        265
Mortgage cost
amortization                  (1,089 )      (1,139 )         50
Total financing costs        (14,122 )     (18,070 )      3,948

Investment income                204           360         (156 )
Unrealized loss on
interest rate cap
contract                           -          (160 )        160

General & administrative expenses:
Accounting fees                 (558 )        (654 )         96
Legal and professional
fees                          (1,074 )        (135 )       (939 )
Trustees and consultant
fees                          (1,205 )      (1,164 )        (41 )
Stock option expense             (46 )        (124 )         78
Corporate expenses              (938 )        (556 )       (382 )
Total general &
administrative expenses       (3,821 )      (2,633 )     (1,188 )

Special Committee third
party advisory, legal
and other expenses            (4,606 )      (1,416 )     (3,190 )
Depreciation                 (10,341 )     (11,339 )        998
Loss on investment in
tenancy-in-common               (202 )           -         (202 )
Adjusted net (loss)
income                        (3,083 )         957       (4,040 )

Tenant improvement
write-off due to
COVID-19                      (7,277 )           -       (7,277 )
Gain on sale of property           -           836         (836 )
Gain on deconsolidation
of subsidiary                 27,680             -       27,680
Net income                    17,320         1,793       15,527

Net loss (income)
attributable to
noncontrolling
interests in
subsidiaries                   3,233            (6 )      3,239
Net income attributable
to common equity           $  20,553     $   1,787     $ 18,766


Adjusted net loss for Fiscal 2020 was $3,083,000 (($0.44) per share basic and
diluted) compared to net income of $957,000 ($0.14 per share basic and diluted)
for Fiscal 2019. Adjusted net loss/income is a non-GAAP measure, which
management believes is a useful and meaningful gauge to investors of our
operating performance, since it excludes the impact of unusual and infrequent
items specifically: a gain on deconsolidation of the Pierre Towers property in
Fiscal 2020; a tenant improvement write-off due to COVID-19 in Fiscal 2020; and
a gain related to the sale of the property in Patchogue, New York in Fiscal
2019.

The adjusted net loss for Fiscal 2020 was primarily driven by the following: (a)
an increase in Special Committee third party advisory, legal and other expenses
incurred of approximately $3.2 million; (b) a reduction in total revenue,
excluding the impact of the conversion of the Pierre property to a TIC, in the
amount of approximately $2.8 million (with a consolidated impact to FREIT of
approximately $1.5 million) as explained above; (c) an increase in General &
Administrative ("G&A") expenses of approximately $1.2 million primarily driven
by an increase in legal costs of approximately $1 million attributed to the
legal proceedings between FREIT and certain of its affiliates and Sinatra
Properties, LLC and an increase of approximately $0.3 million in lender and
legal fees related to the conversion of the Pierre Towers partnership to a TIC
in Fiscal 2020; (d) an increase in expense for the reserve of uncollectible
rents of approximately $0.4 million (with a consolidated impact to FREIT of
approximately $0.3 million) primarily resulting from the COVID-19 pandemic
impact on certain commercial non-essential tenants due to mandated shutdowns and
imposed restrictions; (e) an increase in leasing costs due to the Cobb Theatres'
rejection of its lease in the amount of approximately $0.2 million; offset by
(f) a decrease in financing costs of approximately $2.7 million (with a
consolidated impact to FREIT of approximately $1.8 million), (excluding the
impact of the deconsolidation of the operating results of the Pierre Towers from
FREIT's operating results of approximately $1.3 million in interest expense),
primarily attributed to the decline in interest rates on variable mortgage
loans; and (g) a decline in repairs and maintenance expense of approximately
$1.1 million (with a consolidated impact to FREIT of approximately $0.8 million)
due to the deferral of non-essential maintenance projects across all properties
in Fiscal 2020 in an

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effort to keep such costs lower while the Company has experienced a loss of
revenues at the commercial properties and to adjust to the difficulty in hiring
contractors due to imposed COVID-19 restrictions and mandates. See Note 17 to
FREIT's consolidated financial statements for further details on the
deconsolidation of the Pierre Towers property to a TIC. (Refer to the segment
disclosure below for a more detailed discussion of the financial performance of
FREIT's commercial and residential segments.)

SEGMENT INFORMATION

The following table sets forth comparative net operating income ("NOI") data for
FREIT's real estate segments and reconciles the NOI to consolidated net
income-common equity for Fiscal 2020, as compared to Fiscal 2019 (See below for
definition of NOI):

                                            Commercial                                                     Residential                                                           Combined
                        Years Ended                                                         Years Ended                                                                        Years Ended
                        October 31,                     Increase (Decrease)                 October 31,               Increase (Decrease)                                      October 31,
                    2020          2019                    $                %            2020           2019              $              %          2020                                   2019
                                   (In Thousands)                                                  (In Thousands)                                                             (In Thousands)
Rental income    $ 18,769     $ 20,324            $       (1,555 )         -7.7 %   $ 27,812       $ 32,592       $     (4,780 )      -14.7 %   $  46,581     $  52,916
Reimbursements      5,690        6,295                      (605 )         -9.6 %        150            134                 16         11.9 %       5,840         6,429
Other                  27           73                       (46 )        -63.0 %        676            449                227         50.6 %         703           522
Total revenue      24,486       26,692                    (2,206 )        

-8.3 %     28,638         33,175             (4,537 )      -13.7 %      53,124        59,867

Operating
expenses           11,334       11,694                      (360 )         -3.1 %     11,588         14,368             (2,780 )      -19.3 %      22,922        26,062
Net operating
income           $ 13,152     $ 14,998            $       (1,846 )        -12.3 %   $ 17,050       $ 18,807       $     (1,757 )       -9.3 %      30,202        33,805
Gain on sale
of property      $      -     $    836            $         (836 )       -100.0 %   $      -       $      -       $          -          0.0 %           -           836

Average
Occupancy %          79.7 %      81.5% *                                  

-1.8 %       94.0 %**       95.6 %**                        -1.6 %

                                       Reconciliation to consolidated net income-common equity:
                                       Deferred rents - straight lining                                                                              (397 )         410
                                       Investment income                                                                                              204           360
                                       Unrealized loss on interest rate cap contract                                                                    -          (160 )
                                       Special Committee third party advisory, legal and other expenses                                            (4,606 )      (1,416 )
                                       Gain on deconsolidation of subsidiary                                                                       27,680             -
                                       Loss on investment in tenancy-in-common                                                                       (202 )           -
                                       General and administrative expenses                                                                         (3,821 )      (2,633 )
                                       Depreciation                                                                                               (10,341 )     (11,339 )
                                       Tenant improvement write-off due to COVID-19                                                                (7,277 )           -
                                       Financing costs                                                                                            (14,122 )     (18,070 )
                                         Net income                                                                                                17,320         1,793
                                       Net loss (income) attributable to noncontrolling interests in    subsidiaries                                3,233            (6 )
                                       Net income attributable to common equity                                                                 $  20,553     $   1,787

*Average occupancy rate excludes the Patchogue, New York property as the property was sold in February 2019.

**Average occupancy rate excludes the Pierre Towers property from all periods
presented as the property was deconsolidated and converted to a TIC effective
February 28, 2020.

NOI is based on operating revenue and expenses directly associated with the operations of the real estate properties, but excludes deferred rents (straight lining), depreciation, financing costs and other items. FREIT assesses and measures segment operating results based on NOI.

Same Property NOI: FREIT considers same property net operating income ("Same
Property NOI") to be a useful supplemental non-GAAP measure of its operating
performance. FREIT defines same property within both the commercial and
residential segments to be those properties that FREIT has owned and operated
for both the current and prior periods presented, excluding those properties
that FREIT acquired or redeveloped during those periods. Any newly acquired
property that has been in operation for less than a year, any property that is
undergoing a major redevelopment but may still be in operation at less than full
capacity, and/or any property that has been sold or deconsolidated is not
considered same property.

NOI and Same Property NOI are non-GAAP financial measures and are not measures
of operating results or cash flow as measured by GAAP, and are not necessarily
indicative of cash available to fund cash needs and should not be considered an
alternative to cash flows as a measure of liquidity.

COMMERCIAL SEGMENT

The commercial segment contains eight (8) separate properties. Seven of these
properties are multi-tenanted retail or office centers, and one is single
tenanted on land located in Rockaway, New Jersey owned by FREIT from which it
receives monthly rental income from a tenant who has built and operates a bank
branch on the land. On February 8, 2019, FREIT sold a commercial building,
formerly occupied as a Pathmark supermarket in Patchogue, New York for a sales
price of $7.5 million. The sale of this property, which had a carrying value of
approximately $6.2 million, resulted in a gain of approximately $0.8 million net
of sales fees and commissions. Net cash proceeds of approximately $2 million
were realized after paying off the related mortgage on this property in the
amount of approximately $5.2 million. The sale of this property eliminates an
operating loss of approximately $0.8 million ($0.12 per share) incurred,
annually, since Pathmark vacated the building in December 2015 (see Note 2 to
FREIT's consolidated financial statements for further details).

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As indicated in the table above under the caption Segment Information, total
revenue and NOI from FREIT's commercial segment for Fiscal 2020 decreased by
8.3% and 12.3%, respectively, as compared to Fiscal 2019. The decline in revenue
for Fiscal 2020 was primarily attributable to the following: (a) a reduction in
revenue as compared to Fiscal 2019 resulting from Cobb Theatre's rejection of
its lease due to the Cobb Theatre bankruptcy filing as of June 30, 2020 at the
Rotunda retail property in the amount of approximately $0.7 million (excluding
the straight-line rent receivable write-off of approximately $0.4 million); (b)
a reduction in total revenue in the amount of approximately $1.2 million
(excluding the straight-line rent receivable write-off of approximately $0.2
million) as compared to Fiscal 2019 due to rental revenue being deemed
uncollectible and classified as a reduction in rental revenue primarily
attributed to commercial tenants suffering adverse financial consequences as a
result of the COVID-19 pandemic; (c) a decrease in revenue of approximately $0.2
million attributed to commercial rent abatements resulting from the COVID-19
pandemic; and (d) the remainder of the decline of approximately $0.1 million
attributed to the 1.8% decrease in the average annual occupancy rate in Fiscal
2020 as compared to Fiscal 2019. The decline in NOI for Fiscal 2020 was
primarily attributable to the following: (a) a decrease in revenue of
approximately $2.2 million as explained above; (b) an increase in expense for
the reserve of uncollectible rents of approximately $0.3 million primarily
resulting from the COVID-19 pandemic impact; (c) a write-off of unamortized
leasing costs related to Cobb Theatres' rejection of its lease in the amount of
approximately $0.2 million; offset by (d) a decline in repairs and maintenance
expense of approximately $0.7 million due to the deferral of non-essential
maintenance projects across all properties in Fiscal 2020 in an effort to keep
such costs lower while the Company has experienced a loss of revenues at the
commercial properties and to adjust to the difficulty in hiring contractors due
to imposed COVID-19 restrictions and mandates.

Same Property Operating Results: FREIT's commercial segment currently contains
eight (8) same properties. (See definition of same property under Segment
Information above.) The Patchogue property was excluded from same property
results for Fiscal 2020 and 2019 because this property was sold in February
2019. Same property revenue and NOI for Fiscal 2020 decreased by 8.3% and 12.9%,
respectively, as compared to Fiscal 2019. The changes resulted from the factors
discussed in the immediately preceding paragraph.

Leasing: The following tables reflect leasing activity at FREIT's commercial
properties for comparable leases (leases executed for spaces in which there was
a tenant at some point during the previous twelve-month period) and
non-comparable leases for Fiscal 2020.

                                                                                                             Tenant
                                                    Weighted            Weighted                           Improvement            Lease
                                                     Average          Average Prior                         Allowance          Commissions
                  Number of      Lease Area        Lease Rate          Lease Rate        % Increase       (per Sq. Ft.)       (per Sq. Ft.)
   RETAIL:         Leases         (Sq. Ft.)       (per Sq. Ft.)       (per Sq. Ft.)      (Decrease)            (a)                 (a)

Comparable
leases (b)                10          20,619     $         27.75     $         32.07           -13.5 %   $             -     $          0.36

Non-comparable
leases                     1           1,730     $         14.63                 N/A             N/A     $             -     $          0.80

Total leasing
activity                  11          22,349


                                                                                                              Tenant
                                                     Weighted            Weighted                           Improvement            Lease
                                                      Average          Average Prior                         Allowance          Commissions
                  Number of       Lease Area        Lease Rate          Lease Rate        % Increase       (per Sq. Ft.)       (per Sq. Ft.)
   OFFICE:          Leases         (Sq. Ft.)       (per Sq. Ft.)       (per Sq. Ft.)      (Decrease)            (a)                 (a)

Comparable
leases (b)                  1             444     $         35.87     $         32.08            11.8 %   $             -     $          0.68

Non-comparable
leases                      -               -     $             -                 N/A             N/A     $             -     $             -

Total leasing
activity                    1             444

(a) These leasing costs are presented as annualized costs per square foot and are allocated uniformly over the lease term.

(b) This includes new tenant leases and/or modifications/extensions/renewals of
existing tenant leases.



RESIDENTIAL SEGMENT

FREIT currently operates seven (7) multi-family apartment buildings or complexes
totaling 1,171 apartment units. On February 28, 2020, FREIT reorganized its
subsidiary S and A Commercial Associates Limited Partnership ("S&A") from a
partnership into a TIC. Prior to this reorganization, FREIT owned a 65%
membership interest in S&A, which owned 100% of the Pierre Towers property
located in Hackensack, New Jersey through its 100% interest in Pierre Towers,
LLC. Accordingly, FREIT consolidated the financial statements of S&A and its
subsidiary to include 100% of the subsidiary's assets, liabilities, operations
and cash flows with the interest not owned by FREIT reflected as "noncontrolling
interests in subsidiary" and all significant intercompany accounts and
transactions were eliminated in consolidation.

Pursuant to the TIC agreement, FREIT ultimately acquired a 65% undivided
interest in the Pierre Towers property which was formerly owned by S&A. Based on
the guidance of Accounting Standards Codification 810, "Consolidation", FREIT's
investment in the TIC is accounted for under the equity method of accounting.
While FREIT's effective ownership percentage interest in the Pierre Towers
property remains unchanged after the reorganization to a TIC, FREIT no longer
has a controlling interest as the TIC is now under joint control. Since FREIT
retained a noncontrolling financial interest in the TIC, and the

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deconsolidation (as of February 28, 2020) of the subsidiary is not the result of
a nonreciprocal transfer to owners, a gain on deconsolidation in the amount of
approximately $27.7 million was recognized in the accompanying consolidated
statement of income for the year ended October 31, 2020. This gain was measured
at the date of deconsolidation as the difference between the fair value of the
investment in the TIC at the date the entity was deconsolidated and the carrying
amount of the former subsidiary's assets and liabilities. (See Note 17 to
FREIT's consolidated financial statements for further details.)

As indicated in the table above under the caption Segment Information, total
revenue and NOI from FREIT's residential segment for Fiscal 2020 decreased by
13.7% and 9.3%, respectively, as compared to Fiscal 2019. The decline in revenue
for Fiscal 2020 was primarily attributable to the following: (a) a decline in
revenue of approximately $5 million resulting from the deconsolidation of the
operating results of the Pierre Towers property from FREIT's operating results
due to the conversion to a TIC as of February 28, 2020; offset by (b) insurance
reimbursements received in Fiscal 2020 of approximately $0.3 million; and (c) a
slight increase in base rents at most properties of approximately $0.2 million
as compared to Fiscal 2019. The decline in NOI for Fiscal 2020 is primarily
attributed the deconsolidation of the operating results of the Pierre Towers
property from FREIT's operating results resulting in a decrease of approximately
$2.2 million in NOI as compared to Fiscal 2019 offset by a decline in repairs
and maintenance expense of approximately $0.4 million due to the deferral of
non-essential maintenance projects across all properties in Fiscal 2020 in an
effort to keep such costs lower while the Company has experienced a loss of
revenues at the commercial properties and to adjust to the difficulty in hiring
contractors due to imposed COVID-19 restrictions and mandates. Average occupancy
for all residential properties for Fiscal 2020 decreased by approximately 1.6%
over Fiscal 2019. The decline in the average occupancy rate is primarily driven
by the decline in the average occupancy rate at the Icon to an average occupancy
rate of 91.5% for Fiscal 2020 as compared to 95.1% for Fiscal 2019. This decline
in occupancy rate is primarily attributed to tenants attending the Johns Hopkins
University, which is in close proximity to the Icon and represents approximately
30% of our tenants at this property. In response to the COVID-19 pandemic, Johns
Hopkins University only offered online classes for the fall semester which
resulted in a loss of these tenants at our property.

Same Property Operating Results: FREIT's residential segment currently contains
seven (7) same properties. (See definition of same property under Segment
Information above.) The Pierre Towers property was excluded from same property
results for both fiscal years since this property was deconsolidated and
converted to a TIC as of February 28, 2020. Same property revenue and NOI
increased by 0.9% and 1.7%, respectively, from Fiscal 2019. The changes resulted
from the factors discussed in the immediately preceding paragraph.

FREIT's residential revenue is principally composed of monthly apartment rental
income. Total rental income is a factor of occupancy and monthly apartment
rents. Monthly average residential rents at the end of Fiscal 2020 and Fiscal
2019 were $1,953 and $1,914, respectively. For comparability purposes, the
average residential rent for Fiscal 2019 has been restated to include the impact
of Station Place and excludes the impact of the Pierre Towers due to the
deconsolidation and conversion to a TIC in Fiscal 2020. A 1% decline in annual
average occupancy, or a 1% decline in average rents from current levels, results
in an annual revenue decline of approximately $274,000 and $258,000,
respectively.

Capital expenditures: Since all of FREIT's apartment communities, with the
exception of the Boulders, Regency, Icon and Station Place properties, were
constructed more than 25 years ago, FREIT tends to spend more in any given year
on maintenance and capital improvements than may be spent on newer properties.
As a result of the COVID-19 global pandemic, only capital improvements deemed
essential are being made at this time. Funds for these capital projects will be
available from cash flow from the property's operations and cash reserves.

FINANCING COSTS

                                     Years Ended October 31,
                                    2020                   2019
                                    (In Thousands of Dollars)
Fixed rate mortgages (a):
1st Mortgages
Existing                        $       7,401            $  8,763
New                                         -                 190
Variable rate mortgages:
1st Mortgages
Existing                                5,211               7,384
New                                        92                   -
Other                                     329                 594
Total financing costs, gross           13,033              16,931
Amortization of mortgage costs          1,089               1,139
Total financing costs, net      $      14,122            $ 18,070

(a) Includes the effect of interest rate swap contracts which effectively convert the floating interest rate to a fixed interest rate over the term of the loan.

Total net financing costs for Fiscal 2020 decreased by approximately $3,948,000
or 21.8%, compared to Fiscal 2019 which is attributable to the following: (a) a
decline in interest on variable mortgage loans of approximately $2,081,000
resulting from

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lower interest rates; (b) the deconsolidation of the Pierre Towers property from
FREIT's operating results due to the conversion to a TIC as of February 28, 2020
resulting in a decrease in net financing costs of approximately $1,289,000; (c)
a decline in other interest expense of approximately $265,000 primarily
resulting from the $5 million payment of deferred Trustee fees to two retired
Trustees earlier in Fiscal 2020 and a decline in the ten (10)-year Treasury Bond
interest rate as compared to Fiscal 2019; and (d) the remainder of the decrease
of approximately $313,000 resulted from the decline in interest on fixed
interest rate mortgages due to another year of loan amortization. (See Note 17
to FREIT's consolidated financial statements for further details on the
deconsolidation of the Pierre Towers property.)

INVESTMENT INCOME

Investment income for Fiscal 2020 was $204,000 as compared to $360,000 for
Fiscal 2019. Investment income is principally derived from interest earned from
cash on deposit in institutional money market funds and interest earned from
secured loans receivable (loans made to Hekemian employees, including Robert S.
Hekemian, Jr., the Chief Executive Officer, President and a Trustee of FREIT,
David B. Hekemian, a Trustee of FREIT, Allan Tubin, the Chief Financial Officer
and Treasurer of FREIT and certain other members of the immediate family of the
late Robert S. Hekemian, FREIT's former Chairman, Chief Executive Officer and
consultant of FREIT) for their equity investments (through Rotunda 100, LLC) in
Grande Rotunda, LLC, a limited liability company in which FREIT owns a 60%
equity interest. (See Note 8 to FREIT's consolidated financial statements for
additional details.)

GENERAL AND ADMINISTRATIVE EXPENSES ("G&A")

G&A expense for Fiscal 2020 was $3,821,000 as compared to $2,633,000 for Fiscal
2019. The primary components of G&A are accounting/auditing fees, legal and
professional fees, Trustees' and consultant fees and corporate expenses. The
increase in G&A costs for Fiscal 2020 was primarily driven by an increase in
legal costs of approximately $960,000 resulting from the legal proceedings
between FREIT and certain of its affiliates and Sinatra Properties, LLC and an
increase of approximately $300,000 in lender and legal fees related to the
conversion of the Pierre Towers partnership to a TIC in Fiscal 2020. (See Note
17 to FREIT's consolidated financial statements for additional details.)

SPECIAL COMMITTEE THIRD PARTY ADVISORY, LEGAL AND OTHER EXPENSES

Special Committee third party advisory, legal and other expenses for Fiscal 2020
was $4,606,000 as compared to $1,416,000 for Fiscal 2019. These expenses are
primarily composed of advisory and legal fees incurred. On May 7, 2020, the
Board approved the elimination of the Special Committee as a committee of the
Board. (See Note 14 to FREIT's consolidated financial statements for further
details.)

DEPRECIATION

Depreciation expense from operations for Fiscal 2020 was $10,341,000 as compared
to $11,339,000 for Fiscal 2019. The decline in depreciation expense for Fiscal
2020 was primarily attributable to the deconsolidation of the operating results
of the Pierre Towers property from FREIT's operating results as of February 28,
2020. (See Note 17 to FREIT's consolidated financial statements for further
details.)

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Fiscal Years Ended October 31, 2019 and 2018

Summary revenues and net income for Fiscal 2019 and the fiscal year ended October 31, 2018 ("Fiscal 2018") are as follows:

                               Years Ended October 31,
                          2019              2018         Change
                      (in thousands, except per share amounts)
Real estate
revenues:
Commercial
properties           $        27,122      $  26,149     $    973
Residential
properties                    33,155         31,848        1,307
Total real estate
revenues                      60,277         57,997        2,280

Operating
expenses:
Real estate
operating expenses            26,062         24,883        1,179
Special Committee
third party
advisory, legal
and other expenses             1,416              -        1,416
General and
administrative                 2,633          2,305          328
Depreciation                  11,339         11,515         (176 )
Total operating
expenses                      41,450         38,703        2,747

Operating income              18,827         19,294         (467 )

Investment income                360            267           93
Unrealized (loss)
gain on interest
rate cap contract               (160 )           72         (232 )
Gain on sale of
property                         836              -          836
Financing costs              (18,070 )      (18,667 )        597
Net income                     1,793            966          827

Net (income) loss
attributable to
noncontrolling
interests in
subsidiaries                      (6 )          517         (523 )
Net income
attributable to
common equity        $         1,787      $   1,483     $    304

Earnings per share
- basic and
diluted:             $          0.26      $    0.21     $   0.05

Weighted average
shares
outstanding:
Basic and diluted              6,940          6,883


Real estate revenue for Fiscal 2019 increased 3.9% to $60,277,000 compared to
$57,997,000 for Fiscal 2018. The increase in revenue was primarily attributable
to an increase in the average occupancy rate at the Rotunda property resulting
from the lease-up of the residential units and retail space at the property.

Net income attributable to common equity ("net income-common equity") for Fiscal
2019 was $1,787,000 ($0.26 per share basic and diluted), compared to $1,483,000
($0.21 per share basic and diluted) for Fiscal 2018.

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The schedule below provides a non-GAAP detailed analysis of the major changes
that impacted revenue and net income-common equity for Fiscal 2019 and Fiscal
2018:

NON-GAAP NET INCOME COMPONENTS

                           Years Ended October 31,
                       2019          2018         Change
                            (thousands of dollars)
Income from real
estate operations:
Commercial
properties           $  15,427     $  14,288     $  1,139

Residential

properties              18,788        18,826          (38 )
Total income from
real estate
operations              34,215        33,114        1,101

Financing costs:
Fixed rate
mortgages               (8,953 )     (10,248 )      1,295
Floating rate
mortgages               (7,384 )      (5,368 )     (2,016 )
Floating rate -
Rotunda
construction loan            -        (1,321 )      1,321
Credit line                  -           (28 )         28
Other - Corporate
interest                  (594 )        (652 )         58
Mortgage cost
amortization            (1,139 )      (1,050 )        (89 )
Total financing
costs                  (18,070 )     (18,667 )        597

Investment income          360           267           93
Unrealized (loss)
gain on interest
rate cap contract         (160 )          72         (232 )

General &
administrative
expenses:
Accounting fees           (654 )        (544 )       (110 )
Legal &
professional fees         (135 )        (121 )        (14 )
Trustees and
consultant fees         (1,164 )        (989 )       (175 )
Stock option
expense                   (124 )        (130 )          6
Corporate expenses        (556 )        (521 )        (35 )
Total general &
administrative
expenses                (2,633 )      (2,305 )       (328 )

Special Committee
third party
advisory, legal
and other expenses      (1,416 )           -       (1,416 )
Depreciation           (11,339 )     (11,515 )        176
Adjusted net
income                     957           966           (9 )

Gain on sale of
property                   836             -          836
Net income               1,793           966          827

Net (income) loss
attributable to
noncontrolling
     interests in
subsidiaries                (6 )         517         (523 )
Net income
attributable to
common equity        $   1,787     $   1,483     $    304


Adjusted net income for Fiscal 2019 was $957,000 ($0.14 per share basic and
diluted) compared to $966,000 ($0.14 per share basic and diluted) for Fiscal
2018. Adjusted net income is a non-GAAP measure, which management believes is a
useful and meaningful gauge to investors of our operating performance, since it
excludes the impact of unusual and infrequent items specifically: a gain related
to the sale of the property in Patchogue, New York in Fiscal 2019. The slight
decrease in adjusted net income for Fiscal 2019 was primarily driven by the
following: (a) real estate tax credits and refunds related to the Icon at the
Rotunda property in the amount of approximately $1.1 million received in Fiscal
2018 related to Fiscal 2017 (with a consolidated impact to FREIT of
approximately $0.7 million); (b) Special Committee third party advisory, legal
and other expenses incurred in Fiscal 2019 in the amount of approximately $1.4
million; (c) interest expense increase on the loan on the Rotunda property in
the amount of approximately $0.6 million resulting primarily from an increase in
interest rates as compared to the prior year; offset by (d) an increase in
revenue of approximately $2.3 million as explained above and Fiscal 2018 being
burdened by a $1.2 million loan prepayment cost (with a consolidated impact to
FREIT of approximately $0.8 million) related to the Pierre Towers, LLC loan
refinancing. (Refer to the segment disclosure below for a more detailed
discussion on the financial performance of FREIT's commercial and residential
segments.)

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SEGMENT INFORMATION

The following table sets forth comparative net operating income ("NOI") data for FREIT's real estate segments and reconciles the NOI to consolidated net income-common equity for Fiscal 2019, as compared to Fiscal 2018:

                                         Commercial                                                   Residential                                                         Combined
                        Years Ended                                                  Years Ended                                                                         Years Ended
                        October 31,                Increase (Decrease)               October 31,               Increase (Decrease)                                       October 31,
                    2019          2018             $                   %          2019         2018            $                   %          2019                                 2018
                               (In Thousands)                                               (In Thousands)                                                             (In Thousands)

Rental income    $ 20,324      $ 19,379      $       945               4.9 %   $ 32,592     $ 31,283     $     1,309               4.2 %   $  52,916     $  50,662
Reimbursements      6,295         5,989              306               5.1 %        134          104              30              28.8 %       6,429         6,093
Other                  73            96              (23 )           -24.0 %        449          541             (92 )           -17.0 %         522           637
Total revenue      26,692        25,464            1,228               4.8 %     33,175       31,928           1,247               3.9 %      59,867        57,392

Operating
expenses           11,694        11,861             (167 )            -1.4 %     14,368       13,022           1,346              10.3 %      26,062        24,883
Net operating
income           $ 14,998      $ 13,603      $     1,395              10.3 %   $ 18,807     $ 18,906     $       (99 )            -0.5 %      33,805        32,509
Gain on sale
of property      $    836      $      -      $       836             100.0 %   $      -     $      -     $         -               0.0 %         836             -

Average
Occupancy %          81.5 %*       80.6 %*                             0.9 %       95.2 %       94.4 %                             0.8 %

                                        Reconciliation to consolidated net income-common equity:
                                        Deferred rents - straight lining                                                                         410           605
                                        Investment income                                                                                        360           267
                                        Unrealized (loss) gain on interest rate cap contract                                                    (160 )          72
                                        Special Committee third party advisory, legal and other expenses                                      (1,416 )           -
                                        General and administrative expenses                                                                   (2,633 )      (2,305 )
                                        Depreciation                                                                                         (11,339 )     (11,515 )
                                        Financing costs                                                                                      (18,070 )     (18,667 )
                                          Net income                                                                                           1,793           966
                                        Net (income) loss attributable to noncontrolling interests                                                (6 )         517
                                        Net income attributable to common equity                                                           $   1,787     $   1,483

*Average occupancy rate excludes the Patchogue, New York property from all periods presented as the property was sold in February 2019.

NOI is based on operating revenue and expenses directly associated with the operations of the real estate properties, but excludes deferred rents (straight lining), depreciation, financing costs and other items. FREIT assesses and measures segment operating results based on NOI.

Same Property NOI: FREIT considers same property net operating income ("Same
Property NOI") to be a useful supplemental non-GAAP measure of its operating
performance. FREIT defines same property within both the commercial and
residential segments to be those properties that FREIT has owned and operated
for both the current and prior periods presented, excluding those properties
that FREIT acquired or redeveloped during those periods. Any newly acquired
property that has been in operation for less than a year, any property that is
undergoing a major redevelopment but may still be in operation at less than full
capacity, and/or any property that has been sold or deconsolidated is not
considered same property.

NOI and Same Property NOI are non-GAAP financial measures and are not measures
of operating results or cash flow as measured by GAAP, and are not necessarily
indicative of cash available to fund cash needs and should not be considered an
alternative to cash flows as a measure of liquidity.

COMMERCIAL SEGMENT

The commercial segment contains eight (8) separate properties. Seven of these
properties are multi-tenanted retail or office centers, and one is single
tenanted on land located in Rockaway, New Jersey owned by FREIT from which it
receives monthly rental income from a tenant who has built and operates a bank
branch on the land. On February 8, 2019, FREIT sold a commercial building,
formerly occupied as a Pathmark supermarket in Patchogue, New York for a sales
price of $7.5 million. The sale of this property, which had a carrying value of
approximately $6.2 million, resulted in a gain of approximately $0.8 million net
of sales fees and commissions. Net cash proceeds of approximately $2 million
were realized after paying off the related mortgage on this property in the
amount of approximately $5.2 million. In connection with and in anticipation of
the closing of the sale of the Patchogue property, FREIT declared a one-time
special dividend of $0.10 per share in the first quarter of Fiscal 2019. The
sale of this property eliminates an operating loss of approximately $0.8 million
($0.12 per share) incurred, annually, since Pathmark vacated the building in
December 2015. (See Note 2 to FREIT's consolidated financial statements.)

As indicated in the table above under the caption Segment Information, total
revenue and NOI from FREIT's commercial segment for Fiscal 2019 increased by
4.8% and 10.3%, respectively, as compared to Fiscal 2018. Average occupancy for
all commercial properties increased by 0.9% as compared to Fiscal 2018. The
increase in revenue and NOI was primarily attributable to an increase in
occupancy at the Rotunda property resulting from the lease-up of the new retail
space from an average annual occupancy of 73.8% in Fiscal 2018 to 82.3% in
Fiscal 2019.

Same Property Operating Results: FREIT's commercial segment currently contains
eight (8) same properties. (See definition of same property.) The Patchogue
property was excluded from same property results for Fiscal 2019 and 2018 since
this property was sold in February 2019. Same property revenue and NOI for
Fiscal 2019 increased by 4.8% and 8.2%,

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respectively, as compared to Fiscal 2018. The changes resulted from the factors discussed in the immediately preceding paragraph.

Leasing: The following tables reflect leasing activity at FREIT's commercial
properties for comparable leases (leases executed for spaces in which there was
a tenant at some point during the previous twelve-month period) and
non-comparable leases for Fiscal 2019.

                                                                                                             Tenant
                                                    Weighted            Weighted                           Improvement            Lease
                                                     Average          Average Prior                         Allowance          Commissions
                  Number of      Lease Area        Lease Rate          Lease Rate        % Increase       (per Sq. Ft.)       (per Sq. Ft.)
   RETAIL:         Leases         (Sq. Ft.)       (per Sq. Ft.)       (per Sq. Ft.)      (Decrease)            (a)                 (a)

Comparable
leases (b)                23          83,812     $         16.99     $         16.26             4.5 %   $          0.20     $          0.50

Non-comparable
leases                     8          10,708     $         33.35                 N/A             N/A     $          2.32     $          1.62

Total leasing
activity                  31          94,520


                                                                                                             Tenant
                                                    Weighted            Weighted                           Improvement            Lease
                                                     Average          Average Prior                         Allowance          Commissions
                  Number of      Lease Area        Lease Rate          Lease Rate        % Increase       (per Sq. Ft.)       (per Sq. Ft.)
   OFFICE:         Leases         (Sq. Ft.)       (per Sq. Ft.)       (per Sq. Ft.)      (Decrease)            (a)                 (a)

Comparable
leases (b)                15          28,845     $         31.68     $         29.06             9.0 %   $          0.40     $          0.85

Non-comparable
leases                     4          14,590     $         25.76                 N/A             N/A     $          5.16     $          1.77

Total leasing
activity                  19          43,435

(a) These leasing costs are presented as annualized costs per square foot and are allocated uniformly over the lease term.

(b) This includes new tenant leases and/or modifications/extensions/renewals of
existing tenant leases.



RESIDENTIAL SEGMENT

FREIT currently operates eight (8) multi-family apartment buildings or complexes
totaling 1,437 apartment units. On December 7, 2017, FREIT completed the
acquisition of Station Place, a residential apartment complex consisting of one
building with 45 units, located in Red Bank, New Jersey through Station Place on
Monmouth, LLC (FREIT's 100% owned consolidated subsidiary). FREIT identified
Station Place as the replacement property for the Hammel Gardens property
located in Maywood, New Jersey that FREIT sold on June 12, 2017, which completed
the like-kind exchange pursuant to Section 1031 of the Internal Revenue Code
(see Note 3 to FREIT's consolidated financial statements for further details).

As indicated in the table above under the caption Segment Information, total
revenue and NOI from FREIT's residential segment for Fiscal 2019 increased by
3.9% and decreased by 0.5%, respectively, as compared to Fiscal 2018. Average
occupancy for all residential properties increased by 0.8% as compared to Fiscal
2018. The increase in revenue for Fiscal 2019 was primarily attributable to: (a)
an increase in the average occupancy at the Icon (the residential portion of the
Rotunda property in Baltimore, Maryland) to 95.1% in Fiscal 2019 from 91.9% in
Fiscal 2018; and (b) an increase in base rent across the residential properties.
The slight decrease in NOI for Fiscal 2019 was primarily attributed to the real
estate tax credits and refunds related to the Icon property at the Rotunda in
the amount of $1.1 million received in Fiscal 2018 related to Fiscal 2017 (with
a consolidated impact to FREIT of approximately $0.7 million) offset by a $1.2
million increase in revenue as explained above.

Same Property Operating Results: FREIT's residential segment currently contains
seven (7) same properties. (See definition of same property.) The Station Place
property is not included as same property, since it is a newly acquired property
that had been in operation for less than a year in Fiscal 2018. Same property
revenue and NOI increased by 3.8% and decreased by 0.3%, respectively, from
Fiscal 2018. Average occupancy for same properties increased by approximately
0.9% as compared to Fiscal 2018. The changes resulted from the factors discussed
in the immediately preceding paragraph.

FREIT's residential revenue is principally composed of monthly apartment rental
income. Total rental income is a factor of occupancy and monthly apartment
rents. Monthly average residential rents, (excluding from both periods presented
for comparability purposes, the Station Place property which was a newly
acquired property that had been in operation for less than a year in Fiscal
2018), at the end of Fiscal 2019 and Fiscal 2018 were $1,949 and $1,902,
respectively. For comparability purposes, the average residential rent for
Fiscal 2018 has been restated to include the impact of the Icon. A 1% decline in
annual average occupancy, or a 1% decline in average rents from current levels,
results in an annual revenue decline of approximately $326,000 and $304,000,
respectively.

Capital expenditures: Since all of FREIT's apartment communities, with the
exception of the Boulders, Regency, Icon and Station Place properties, were
constructed more than 25 years ago, FREIT tends to spend more in any given year
on maintenance and capital improvements than may be spent on newer properties.
Funds for these capital projects will be available from cash flow from the
property's operations and cash reserves. In April 2018, Pierre Towers, LLC
("Pierre"), a consolidated subsidiary, entered into an agreement with Public
Service Electric & Gas Company ("PSE&G"), whereby PSE&G funded a project to make
certain upgrades at the Pierre property located in Hackensack, New Jersey, which
included boiler replacement, replacement of interior and exterior lighting
fixtures and minor lighting controls in apartment lighting. PSE&G funded 100% of
this project at a total cost of approximately $926,000 and the project was
completed in December

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2018. Per the reimbursement agreement, Pierre Towers, LLC will reimburse PSE&G
for approximately $314,000 of this cost on a monthly basis over a five-year term
with no interest.

FINANCING COSTS

                                     Years Ended October 31,
                                    2019                   2018
                                    (In Thousands of Dollars)
Fixed rate mortgages (a):
1st Mortgages
Existing                        $       8,763            $  8,353
New                                       190               1,895
Variable rate mortgages:
1st Mortgages
Existing                                7,384               1,071
New                                         -               4,297
Construction loan-Rotunda                   -               1,321
Credit line                                 -                  28
Other                                     594                 652
Total financing costs, gross           16,931              17,617
Amortization of mortgage costs          1,139               1,050
Total financing costs, net      $      18,070            $ 18,667

(a) Includes the effect of interest rate swap contracts which effectively convert the floating interest rate to a fixed interest rate over the term of the loan.

Total net financing costs for Fiscal 2019 decreased 3.2% as compared to Fiscal
2018 which was primarily driven by Fiscal 2018 being burdened by a $1.2 million
loan prepayment cost (with a consolidated impact to FREIT of approximately $0.8
million) related to the Pierre Towers, LLC loan refinancing offset by an
increase in Fiscal 2019 of approximately $0.6 million in interest expense on the
Grande Rotunda, LLC loan resulting from an increase in the one-month LIBOR
interest rate. (See Note 5 to FREIT's consolidated financial statements for more
details.)

INVESTMENT INCOME

Investment income for Fiscal 2019 was $360,000 as compared to $267,000 for
Fiscal 2018. Investment income is principally derived from interest earned from
cash on deposit in institutional money market funds and interest earned from
secured loans receivable (loans made to Hekemian employees, including, Robert S.
Hekemian, Jr., the Chief Executive Officer, President and a Trustee of FREIT,
David B. Hekemian, a Trustee of FREIT, Allan Tubin, the Chief Financial Officer
and Treasurer of FREIT and certain other members of the immediate family of the
late Robert S. Hekemian, FREIT's former Chairman, Chief Executive Officer and
consultant of FREIT) for their equity investments (through Rotunda 100, LLC) in
Grande Rotunda, LLC, a limited liability company in which FREIT owns a 60%
equity interest, and for their equity investments (through Damascus 100, LLC) in
Damascus Centre, LLC, a limited liability company in which FREIT owns a 70%
equity interest). The secured loan receivable (including accrued interest) from
Damascus 100, LLC was repaid in the fourth quarter of Fiscal 2018.

GENERAL AND ADMINISTRATIVE EXPENSES

During Fiscal 2019, G&A was $2,633,000 as compared to $2,305,000 for Fiscal 2018. The primary components of G&A are accounting/auditing fees, legal and professional fees, Trustees' and consultant fees.

SPECIAL COMMITTEE THIRD PARTY ADVISORY, LEGAL AND OTHER EXPENSES

Special Committee third party advisory, legal and other expenses for Fiscal 2019
was $1,416,000 as compared to $0 for Fiscal 2018. These expenses are primarily
composed of advisory and legal fees incurred. The Special Committee was formed
on March 28, 2019 and on May 7, 2020, the Board approved the elimination of the
Special Committee as a committee of the Board. (See Note 14 to FREIT's
consolidated financial statements for further details.)

DEPRECIATION

Depreciation expense from operations for Fiscal 2019 was $11,339,000 as compared
to $11,515,000 for Fiscal 2018. The slight decrease in depreciation in Fiscal
2019 was primarily attributable to lower depreciation expense resulting from the
sale of the Patchogue property in February 2019. (See Note 2 to FREIT's
consolidated financial statements for further details.)

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LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $3.6 million for Fiscal 2020
compared to net cash provided by operating activities of $14.1 million for
Fiscal 2019. FREIT expects that cash provided by operating activities and cash
reserves will be adequate to cover mandatory debt service payments (including
payments of interest, but excluding balloon payments), real estate taxes,
recurring capital improvements at its properties and other needs to maintain its
status as a REIT for at least a period of one year from the date of filing of
this Form 10-K.

As at October 31, 2020, FREIT had cash, cash equivalents and restricted cash
totaling $39.5 million, compared to $42.5 million at October 31, 2019. The
decrease in cash in Fiscal 2020 is primarily attributable to $3.6 million in net
cash used in financing activities, $3 million in net cash used in investing
activities including capital expenditures offset by $3.6 million in net cash
provided by operating activities. The primary drivers of this decline were as
follows: (a) Special Committee third party advisory, legal and other expenses
paid in the amount of approximately $5.1 million; (b) deferred compensation paid
to two retired trustees in the amount of approximately $5 million; (c) the
deconsolidation of the operating results of the Pierre Towers property from
FREIT's operating results, reducing net cash by approximately $1.4 million;
offset by (d) a distribution received in the amount of approximately $2.2
million as a result of the refinancing of the loan on the Westwood Hills
property in September 2020.

On February 8, 2019, FREIT sold a commercial building, formerly occupied as a
Pathmark supermarket in Patchogue, New York for a sales price of $7.5 million.
The sale of this property, which had a carrying value of approximately $6.2
million, resulted in a gain of approximately $0.8 million net of sales fees and
commissions. Net cash proceeds of approximately $2 million were realized after
paying off the related mortgage on this property in the amount of approximately
$5.2 million. In connection with and in anticipation of the closing of the sale
of the Patchogue property, FREIT declared a one-time special dividend of $0.10
per share in the first quarter of Fiscal 2019. The sale of this property
eliminates an operating loss of approximately $0.8 million ($0.12 per share)
incurred, annually, since Pathmark vacated the building in December 2015. (See
Note 2 to FREIT's consolidated financial statements.)

On December 7, 2017, FREIT completed the acquisition of Station Place, a
residential apartment complex consisting of one building with 45 units, located
in Red Bank, New Jersey through Station Place on Monmouth, LLC (FREIT's 100%
owned consolidated subsidiary). FREIT identified Station Place as a replacement
property for the Hammel Gardens property that FREIT sold on June 12, 2017 to
complete the like-kind exchange transaction under Section 1031 of the Internal
Revenue Code. Station Place is part of FREIT's residential segment. The
acquisition cost was $19,550,000 (inclusive of approximately $550,000 of
transaction costs capitalized as part of the asset acquisition), which was
funded in part with $7 million in net proceeds from the sale of the Hammel
Gardens property, and the remaining balance of $12,350,000 (inclusive of the
transaction costs) was funded by Station Place on Monmouth, LLC through
long-term financing for this property from Provident Bank. (See Note 3 to
FREIT's consolidated financial statements.)

The Rotunda property in Baltimore, Maryland (owned by FREIT's 60% owned
consolidated affiliate Grande Rotunda, LLC) is an 11.5 acre site containing, at
the time that the property was acquired, a building with approximately 137,000
sq. ft. of office space and approximately 83,000 sq. ft. of retail space on the
lower level of the building. In September 2013, FREIT began construction to
redevelop and expand this property and, with the exception of retail tenant
improvements, the redevelopment was substantially completed in the third quarter
of Fiscal 2016. The redevelopment and expansion plans included a modernization
of the office building and smaller adjacent buildings, construction of 379
residential apartment rental units, an additional 75,000 square feet of new
retail space, and 864 above level parking spaces. By the end of the third
quarter of Fiscal 2018, the residential section reached a stabilized level of
occupancy of approximately 94%.

With regard to the funding of the Rotunda redevelopment project, Wells Fargo
Bank, a previous lender, required that Grande Rotunda, LLC contribute not less
than $14,460,000 toward the construction before any construction loan proceeds
could be disbursed. To secure these funds Grande Rotunda, LLC made a capital
call on its members, which are FREIT and Rotunda 100, LLC ("Rotunda 100").
FREIT's share (60%) amounted to approximately $8.7 million, and the Rotunda 100
members' share (40%) amounted to approximately $5.8 million. FREIT, pursuant to
previous agreements, made secured loans to the Rotunda 100 members of
approximately $2.1 million towards their share of the $5.8 million capital call.
The balance of Rotunda 100's capital call of approximately $3.7 million was
initially made by FREIT until it was repaid by Rotunda 100 in August 2014. These
loans bear an interest rate of 225 basis points over the 90 day LIBOR, and had a
maturity date of June 19, 2015. On June 4, 2015, FREIT's Board of Trustees
approved an extension of the maturity date to occur the earlier of (a) June 19,
2018 or (b) five days after the closing of a permanent mortgage loan secured by
the Rotunda property. On December 7, 2017, the Board approved a further
extension of the maturity dates of these loans to the date or dates upon which
distributions of cash are made by Grande Rotunda, LLC to its members as a result
of the refinancing or sale of Grande Rotunda, LLC or the Rotunda property.
Rotunda 100 is principally owned by employees of Hekemian & Co., including Allan
Tubin, FREIT's Chief Financial Officer and Treasurer, Robert S. Hekemian, Jr.,
Chief Executive Officer, President and a Trustee of FREIT, David B. Hekemian, a
Trustee of FREIT and certain other members of the immediate family of the late
Robert S. Hekemian, FREIT's former Chairman, Chief Executive Officer and
consultant of FREIT. As of October 31, 2020, FREIT and Rotunda 100 have made
their required capital contributions of $8.7 million and $5.8 million,
respectively. Both FREIT and the Rotunda 100 members are treating their required
capital contributions as additional investments in Grande Rotunda, LLC.

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In Fiscal 2017, Grande Rotunda, LLC incurred substantial expenditures at the
Rotunda property related to retail tenant improvements, leasing costs and
operating expenditures which, in the aggregate, exceeded revenues as the
property was still in the rent up phase and the construction loan previously
held with Wells Fargo was at its maximum level resulting in no additional
funding available to draw. Accordingly, during Fiscal 2017 the equity owners in
Grande Rotunda, LLC (FREIT with a 60% ownership and Rotunda 100, LLC with a 40%
ownership) contributed their respective pro-rata share of any cash needs through
loans to Grande Rotunda, LLC. As of October 31, 2020 and October 31, 2019,
Rotunda 100, LLC has funded Grande Rotunda, LLC with approximately $5.9 million
and $5.7 million (including accrued interest), respectively, which is included
in "Due to affiliate" on the accompanying consolidated balance sheets.

On February 7, 2018, Grande Rotunda, LLC ("Grande Rotunda") refinanced its
$115.3 million construction loan held by Wells Fargo with a new loan held by
Aareal Capital Corporation in the amount of approximately $118.5 million with
additional funding available through February 6, 2021 for retail tenant
improvements and leasing costs in the amount of $3,380,000. This refinancing
paid off the loan previously held by Wells Fargo, funded loan closing costs and
paid the amount due to Hekemian Development Resources for a development fee of
$900,000 plus accrued interest of approximately $45,000 (See Note 8 to FREIT's
consolidated financial statements for further details on this fee). This loan is
secured by the Rotunda property, bears a floating interest rate at 285 basis
points over the one-month LIBOR rate and has a maturity date of February 6, 2021
with two one-year renewal options to extend the maturity of this loan, subject
to certain requirements as provided for in the loan agreement. As part of this
transaction, Grande Rotunda purchased an interest rate cap on LIBOR for the full
amount that can be drawn on this loan of $121.9 million, capping the one-month
LIBOR rate at 3% for the first two years of this loan which matured on March 5,
2020. On February 28, 2020, Grande Rotunda purchased an interest rate cap on
LIBOR, with an effective date of March 5, 2020, for the full amount that can be
drawn on this loan of $121.9 million, capping the one-month LIBOR rate at 3% for
one year. As of October 31, 2020, approximately $118.5 million of this loan
facility was drawn down and the interest rate was approximately 2.99%. On
November 5, 2020, Grande Rotunda elected to exercise the first extension option
on this loan to extend the initial maturity date from February 6, 2021 until
February 6, 2022. In order to extend the maturity due date Grande Rotunda must
satisfy the following conditions: (a) pay to lender an extension fee of 0.2% of
the extended loan balance; (b) certify that no default or events of default
exist; (c) extend the interest rate cap to expire on February 6, 2022; and (d)
allow lender to obtain an updated appraisal of the property. The principal
balance of the amount of the loan to be extended must not exceed a loan-to-value
of 62.5%. To the extent the loan-to-value exceeds the 62.5% limit, the loan must
be brought in to balance via a loan reduction or by other means satisfactory to
the Lender. Management expects the loan to be extended, however, until such time
as a definitive agreement providing for a modification and extension of the loan
is entered into, there can be no assurance the loan will be modified and
extended. (See Notes 5 and 6 to FREIT's consolidated financial statements for
further details).

On April 22, 2016, Damascus Centre, LLC was able to take-down a second tranche
of its loan held with People's United Bank in the amount of $2,320,000, of which
approximately $470,000 was readily available and the remaining $1,850,000 was
held in escrow. In July 2018, these funds totaling $1,850,000 were released from
escrow by the bank and became readily available to Damascus, Centre LLC.
Damascus Centre, LLC distributed amounts due to FREIT and Damascus 100 and
Damascus 100 in turn repaid FREIT the secured loans receivable plus accrued
interest in the amount of approximately $1.9 million.

Credit Line: FREIT's revolving line of credit provided by the Provident Bank was
renewed for a three-year term ending on October 31, 2023. Draws against the
credit line can be used for working capital needs and standby letters of credit.
Draws against the credit line are secured by mortgages on FREIT's Franklin
Crossing Shopping Center in Franklin Lakes, New Jersey and retail space in Glen
Rock, New Jersey. The total line of credit is $13 million and the interest rate
on the amount outstanding is based on a floating interest rate of prime minus 25
basis points with a floor of 3.75%. During Fiscal 2017, FREIT utilized $3
million of its credit line to fund tenant improvements for new retail tenants at
the Rotunda property and repaid this line of credit in full in Fiscal 2018. As
of October 31, 2020 and 2019, there was no amount outstanding and $13 million
was available under the line of credit. (See Note 5 to FREIT's consolidated
financial statements for additional details.)

Dividend: The Board of Trustees did not declare a dividend during Fiscal 2020. The Board will continue to evaluate the dividend on a quarterly basis.

As at October 31, 2020, FREIT's aggregate outstanding mortgage debt was $307.2
million, which bears a weighted average interest rate of 3.84% and an average
life of approximately 3.03 years. FREIT's fixed rate mortgages are subject to
amortization schedules that are longer than the terms of the mortgages. As such,
balloon payments (unpaid principal amounts at mortgage due date) for all
mortgage debt will be required as follows:

Fiscal Year                    2021    2022  2023  2024 2025  2026  2028  

2029

($ in millions) Mortgage "Balloon" Payments $140.2 (A) $14.4 $59.8 $9.0 $13.9 $18.6 $10.5 $26.0

(A) Includes the following: (1) loan (with two one-year renewal options) on the
Rotunda property located in Baltimore, Maryland with a balloon payment in the
amount of approximately $118.5 million which matures on February 6, 2021. On
November 5, 2020, Grande Rotunda elected to exercise the first extension option
on this loan to extend the initial maturity date from February 6, 2021 until
February 6, 2022; and (2) loan on the Westridge Square shopping center located
in Frederick, Maryland with a balloon payment in the amount of approximately
$21.7 million which matures on January 31, 2021. The lenders of these properties
are conducting due diligence on these loan modifications/extensions. Management
expects these loans to be modified/extended, however, until such time as a
definitive agreement providing for a modification/extension of these loans are
entered into, there can be no assurance these loans will be modified/extended.

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The following table shows the estimated fair value and carrying value of FREIT's long-term debt, net at October 31, 2020 and 2019:

($ in Millions) October 31, 2020 October 31, 2019

Fair Value                $311.4            $352.9

Carrying Value, Net       $305.4            $349.9


Fair values are estimated based on market interest rates at the end of each
fiscal year and on a discounted cash flow analysis. Changes in assumptions or
estimation methods may significantly affect these fair value estimates. The fair
value is based on observable inputs (level 2 in the fair value hierarchy as
provided by authoritative guidance).

FREIT expects to refinance the individual mortgages with new mortgages or
exercise extension options when their terms expire. To this extent FREIT has
exposure to interest rate risk. If interest rates, at the time any individual
mortgage note is due, are higher than the current fixed interest rate, higher
debt service may be required, and/or refinancing proceeds may be less than the
amount of mortgage debt being retired. For example, at October 31, 2020, a 1%
interest rate increase would reduce the fair value of FREIT's debt by $5.8
million, and a 1% decrease would increase the fair value by $6.1 million.

FREIT continually reviews its debt levels to determine if additional debt can
prudently be utilized for property acquisitions for its real estate portfolio
that will increase income and cash flow to shareholders.

On September 30, 2020, Westwood Hills, LLC ("Westwood Hills"), a consolidated
subsidiary, refinanced its $19.2 million loan (which would have matured on
November 1, 2020) with a new loan held by ConnectOne Bank in the amount of
$25,000,000, with additional funding available in the amount of $250,000 for
legal fees potentially incurred by the lender related to the lis pendens on this
property. (See Note 14 to FREIT's consolidated financial statements for
additional details.) This loan, secured by an apartment building in Westwood,
New Jersey, is interest-only based on a floating rate at 400 basis points over
the one-month LIBOR rate with a floor of 4.15% and has a maturity date of
October 1, 2022 with the option of Westwood Hills to extend for two (2)
additional six (6)-month periods from the maturity date, subject to certain
provisions of the loan agreement. This refinancing resulted in: (i) a change in
the annual interest rate from a fixed rate of 4.62% to a variable rate with a
floor of 4.15% and (ii) net refinancing proceeds of approximately $5.6 million
that were distributed to the partners in Westwood Hills with FREIT receiving
approximately $2.2 million based on its 40% membership interest in Westwood
Hills. As of October 31, 2020, approximately $25,000,000 of this loan was drawn
and outstanding. (See Note 5 to FREIT's consolidated financial statements for
additional details.)

On August 26, 2019, Berdan Court, LLC ("Berdan Court"), (owned 100% by FREIT),
refinanced its $17 million loan (which matured on September 1, 2019) with the
lender in the amount of $28,815,000. This loan, secured by an apartment building
located in Wayne, New Jersey, has a term of ten years and bears a fixed interest
rate equal to 3.54%. Interest-only payments are required each month for the
first five years of the term and thereafter, principal payments plus accrued
interest will be required each month through maturity. This refinancing resulted
in: (i) a reduction in the annual interest rate from a fixed rate of 6.09% to a
fixed rate of 3.54% and (ii) net refinancing proceeds of approximately $11.6
million which can be used for capital expenditures and general corporate
purposes. (See Note 5 to FREIT's consolidated financial statements for
additional details.)

On April 3, 2019, WestFREIT, Corp. (owned 100% by FREIT) exercised its option to
extend its loan held by M&T Bank, with a then outstanding balance of
approximately $22.5 million, for twelve months. Effective beginning on June 1,
2019, the extension of this loan, secured by the Westridge Square shopping
center, required monthly principal payments of $47,250 plus interest based on a
floating interest rate equal to 240 basis points over the one-month LIBOR and
had a maturity date of May 1, 2020 which was extended to November 1, 2020. This
loan has been further extended with a new maturity date of January 31, 2021
under the same terms and conditions of the existing agreement while the lender
is in discussions with the Company regarding a further modification and
extension of this loan. Management expects the loan to be extended, however,
until such time as a definitive agreement providing for a modification and
extension of the loan is entered into, there can be no assurance the loan will
be modified and extended. (See Note 5 to FREIT's consolidated financial
statements for additional details.)

On December 7, 2017, Station Place on Monmouth, LLC (owned 100% by FREIT) closed
on a mortgage loan in the amount of $12,350,000 held by Provident Bank to
purchase the Station Place property in Red Bank, New Jersey. Interest-only
payments are required each month for the first two years of the term and
thereafter, principal payments plus accrued interest will be required each month
through maturity. The loan bears a floating interest rate equal to 180 basis
points over the one-month BBA LIBOR with a maturity date of December 15, 2027.
In order to minimize interest rate volatility during the term of the loan,
Station Place on Monmouth, LLC entered into an interest rate swap agreement
that, in effect, converted the floating interest rate to a fixed interest rate
of 4.35% over the term of the loan. The interest rate swap is considered a
derivative financial instrument that will be used only to reduce interest rate
risk, and not held or used for trading purposes. On January 21, 2019, Station
Place on Monmouth, LLC entered into a modification agreement with Provident Bank
to modify the loan's Debt Service Coverage Ratio covenants. (See Note 5 to
FREIT's consolidated financial statements.)

Interest rate swap contracts: To reduce interest rate volatility, FREIT uses a
"pay fixed, receive floating" interest rate swap to convert floating interest
rates to fixed interest rates over the term of a certain loan. FREIT enters into
these swap contracts

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with a counterparty that is usually a high-quality commercial bank. In essence,
FREIT agrees to pay its counterparties a fixed rate of interest on a dollar
amount of notional principal (which corresponds to FREIT's mortgage debt) over a
term equal to the term of the mortgage notes. FREIT's counterparties, in return,
agree to pay FREIT a short-term rate of interest - generally LIBOR - on that
same notional amount over the same term as the mortgage notes.

FREIT has variable interest rate loans secured by its Damascus Centre, LLC
("Damascus Centre"), Wayne PSC, LLC ("Wayne PSC"), FREIT Regency, LLC
("Regency") and Station Place on Monmouth, LLC ("Station Place") properties. To
reduce interest rate fluctuations, FREIT entered into interest rate swap
contracts for each of these loans. These interest rate swap contracts
effectively converted variable interest rate payments to fixed interest rate
payments. The contracts were based on a notional amount of approximately
$22,320,000 ($18,869,000 at October 31, 2020) for the Damascus Centre swaps, a
notional amount of approximately $16,200,000 ($15,255,000 at October 31, 2020)
for the Regency swap, a notional amount of approximately $25,800,000
($23,078,000 at October 31, 2020) for the Wayne PSC swap and a notional amount
of approximately $12,350,000 ($12,181,000 at October 31, 2020) for the Station
Place swap.

Interest rate cap contract: To limit exposure on interest rate volatility, FREIT
uses an interest rate cap contract to cap a floating interest rate at a set
pre-determined rate. FREIT enters into cap contracts with a counterparty that is
usually a high-quality commercial bank. In essence, so long as the floating
interest rate is below the cap rate, FREIT agrees to pay its counterparties a
variable rate of interest on a dollar amount of notional principal (which
corresponds to FREIT's mortgage debt). Once the floating interest rate rises
above the cap rate, FREIT's counterparties, in return, agree to pay FREIT a
short-term rate of interest above the cap on that same notional amount.

FREIT has a variable interest rate loan secured by its Rotunda property. As part
of the refinancing of Grande Rotunda, LLC's (Grande Rotunda) construction loan
held by Wells Fargo with a new loan from Aareal Capital Corporation, Grande
Rotunda, LLC purchased an interest rate cap on LIBOR for the full amount that
can be drawn on this loan of $121.9 million, capping the one-month LIBOR rate at
3% for the first two years of this loan which matured on March 5, 2020. On
February 28, 2020, Grande Rotunda purchased an interest rate cap on LIBOR, with
an effective date of March 5, 2020, for the full amount that can be drawn on
this loan of $121.9 million, capping the one-month LIBOR rate at 3% for one
year. The cap contract was based on a notional amount of approximately
$121,900,000 ($121,900,000 at October 31, 2020) and a term of one year with the
loan being hedged against having a balance of approximately $118,520,000 and a
remaining term of one year.

In accordance with ASU 2017-12, "Targeted Improvements to Accounting for Hedging
Activities to Accounting Standards Codification Topic 815, Derivatives and
Hedging ("ASC 815")" which was adopted by FREIT in the first quarter of Fiscal
2020 (see Note 1 to FREIT's consolidated financial statements for further
details), FREIT marks-to-market its interest rate swap and cap contracts. As the
floating interest rate varies from time-to-time over the term of the contract,
the value of the contract will change upward or downward. If the floating rate
is higher than the fixed rate, the value of the contract goes up and there is a
gain and an asset. If the floating rate is less than the fixed rate, there is a
loss and a liability. The interest rate swaps and cap are accounted for as cash
flow hedges with the corresponding gains or losses on these contracts not
affecting FREIT's consolidated statements of income; changes in the fair value
of these cash flow hedges will be reported in other comprehensive income and
appear in the equity section of the consolidated balance sheet. This gain or
loss represents the economic consequence of liquidating fixed rate swaps or the
cap contract and replacing them with like-duration funding at current market
rates, something we would likely never do. Periodic cash settlements of these
contracts will be accounted for as an adjustment to interest expense. In Fiscal
2019, prior to the adoption of ASU 2017-12, the Grande Rotunda interest rate cap
which matured on March 5, 2020 was, for accounting purposes, deemed to be an
ineffective cash flow hedge with a corresponding gain or loss being recorded in
FREIT's consolidated statements of income.

FREIT has the following derivative-related risks with its swap and cap contracts ("contract"): 1) early termination risk, and 2) counterparty credit risk.

Early Termination Risk: If FREIT wants to terminate its contract before
maturity, it would be bought out or terminated at market value; i.e., the
difference in the present value of the anticipated net cash flows from each of
the contract's parties. If current variable interest rates are significantly
below FREIT's fixed interest rate payments, this could be costly. Conversely, if
interest rates rise above FREIT's fixed interest payments and FREIT elected
early termination, FREIT would realize a gain on termination. At October 31,
2020, the swap contracts for Damascus Centre, Regency, Station Place and Wayne
PSC were in the counterparties' favor. If FREIT had terminated these contracts
at that date it would have realized losses of approximately $0 for the Grande
Rotunda cap, $610,000 for the Damascus Centre swaps, $1,385,000 for the Regency
swap, $1,669,000 for the Station Place swap and $1,260,000 for the Wayne PSC
swap, all of which have been included as a liability in FREIT's consolidated
balance sheet as at October 31, 2020. The change in the fair value for the
contract (gain or loss) during such period has been included in comprehensive
income and for the year ended October 31, 2020, FREIT recorded an unrealized
loss of approximately $2,798,000 in the consolidated statement of comprehensive
income.

In Fiscal 2019, FREIT was accounting for its interest rate swaps and cap
contract in accordance with ASC 815, "Accounting for Derivative Instruments and
Hedging Activities". (See Notes 1 and 6 to FREIT's consolidated financial
statements for additional details). For the year ended October 31 2019, FREIT
recorded an unrealized loss of $6,400,000 in the consolidated statement of
comprehensive loss representing the change in fair value of the swaps

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during such period. For the year ended October 31, 2019, FREIT recorded an
unrealized loss in the consolidated statement of income of approximately
$160,000 for Grande Rotunda's interest rate cap (which matured on March 5, 2020)
representing the change in the fair value of this ineffective cash flow hedge
during such period. As of October 31, 2019, the fair value of the Grande Rotunda
interest rate cap contract was $0.

Counterparty Credit Risk: Each party to a cap or swap contract bears the risk
that its counterparty will default on its obligation to make a periodic payment.
FREIT reduces this risk by entering into swap or cap contracts only with major
financial institutions that are experienced market makers in the derivatives
market.

FREIT's total contractual obligations under its line of credit and mortgage loans in place as of October 31, 2020 are as follows:

CONTRACTUAL OBLIGATIONS-PRINCIPAL
(in thousands of dollars)
                                     Within      2 - 3      4 - 5     After 5
                         Total      One Year     Years      Years      Years
Long-Term Debt
Annual Amortization    $  14,945   $   3,188   $  4,944   $  3,174   $  3,639
Balloon Payments         292,295     140,200     74,149     22,915     55,031
Total Long-Term Debt*  $ 307,240   $ 143,388   $ 79,093   $ 26,089   $ 58,670

*Includes deferred interest in the amount of approximately $360,000. See Note 5 to FREIT's consolidated financials for additional details.

FREIT's annual estimated cash requirements related to interest on its line of credit and mortgage loans in place as of October 31, 2020 are as follows:

INTEREST OBLIGATIONS
(in thousands of dollars)
                                                     Within      2 - 3     4 - 5     After 5
                                          Total     One Year     Years     Years      Years

Interest on Fixed Rate Debt             $ 24,685   $   5,308   $  8,906   $ 4,949   $  5,522
Interest on Variable Rate Debt (1) (2)     7,203       4,724      2,479         -          -
Total Interest Obligations              $ 31,888   $  10,032   $ 11,385   $ 4,949   $  5,522

(1) Interest based on rates as of October 31, 2020

(2) Since management expects the loan on the Rotunda property to be extended
through February 6, 2022 and the loan on the Westridge Square shopping center to
be extended for at least one year through January 31, 2022, an estimate of
interest expense was included (See Note 5 to FREIT's consolidated financial
statements for additional details.)

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ADJUSTED FUNDS FROM OPERATIONS

Funds From Operations ("FFO") is a non-GAAP measure defined by the National
Association of Real Estate Investment Trusts ("NAREIT"). FREIT does not include
sources or distributions from equity/debt sources in its computation of FFO.
Although many consider FFO as the standard measurement of a REIT's performance,
FREIT modified the NAREIT computation of FFO to include other adjustments to
GAAP net income that are not considered by management to be the primary drivers
of its decision making process. These adjustments to GAAP net income are
straight-line rents and recurring capital improvements on FREIT's residential
apartments. The modified FFO computation is referred to as Adjusted Funds From
Operations ("AFFO"). FREIT believes that AFFO is a superior measure of its
operating performance. FREIT computes FFO and AFFO as follows:

                                Years Ended October 31,
                         2020                   2019         2018
                            (In Thousands, Except Per Share)
Funds From
Operations ("FFO")
(a)
Net income           $     17,320             $  1,793     $    966
Depreciation of
consolidated
properties                 10,341               11,339       11,515
Tenant improvement
write-off due to
COVID-19                    7,277                    -            -
Amortization of
deferred leasing
costs                         730                  611          739
Distributions to
minority interests           (583 )(b)            (686 )       (626 )(c)
Adjustment to loss
in investment in
tenancy-in-common
for depreciation              933                    -            -
Gain on sale of
property                        -                 (836 )          -
Gain on
deconsolidation of
subsidiary                (27,680 )                  -            -
               FFO   $      8,338             $ 12,221     $ 12,594

 Per Share - Basic
       and Diluted   $       1.19             $   1.76     $   1.83

(a) As prescribed by NAREIT.

(b) FFO excludes the distribution of proceeds to minority interest in the amount
of approximately $3.3 million related to the refinancing of the loan for the
Westwood Hills property. See Note 5 to the consolidated financial statements for
further details.

(c) FFO excludes the distribution of proceeds to minority interest in the amount
of approximately $6 million related to the refinancing of the loan for the
Pierre Towers property (previously owned by S And A Commercial Associates
Limited Partnership) which in Fiscal 2018 was a consolidated subsidiary and the
distribution of funds to minority interest in the amount of approximately $1.6
million received from Damascus Centre, LLC for funds which were previously held
in escrow. See Note 5 to the consolidated financial statements for further
details.

Adjusted Funds From Operations ("AFFO")
FFO                                      $ 8,338    $ 12,221    $ 12,594
Deferred rents (Straight lining)             397        (410 )      (605 )
Capital Improvements - Apartments           (347 )      (685 )      (738 )
                                   AFFO  $ 8,388    $ 11,126    $ 11,251

          Per Share - Basic and Diluted  $  1.20    $   1.60    $   1.63

   Weighted Average Shares Outstanding:
                                  Basic    6,992       6,940       6,883
                                Diluted    6,994       6,940       6,883


FFO and AFFO do not represent cash generated from operating activities in
accordance with 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 and AFFO by certain other REITs may vary materially from that
of FREIT, and therefore FREIT's FFO and AFFO may not be directly comparable to
those of other REITs.

STOCK OPTION PLAN

On March 4, 2019, the Board approved the grant of an aggregate of 5,000
non-qualified share options under the Plan to the Chairman of the Board. The
options have an exercise price of $15.00 per share, will vest in equal annual
installments over a 5-year period and will expire 10 years from the date of
grant, which will be March 3, 2029. (See Note 10 to FREIT's consolidated
financial statements for further details.)

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DISTRIBUTIONS TO SHAREHOLDERS

Since its inception in 1961, FREIT has elected to be treated as a REIT for
federal income tax purposes. In order to qualify as a REIT, FREIT must satisfy a
number of highly technical and complex operational requirements, including a
requirement that FREIT must distribute to its shareholders at least 90% of its
REIT taxable income. Although cash used to make distributions reduces amounts
available for capital investment, FREIT generally intends to distribute not less
than the minimum of REIT taxable income necessary to satisfy the applicable REIT
requirement as set forth in the Internal Revenue Code. With respect to the Jobs
and Growth Tax Relief Reconciliation Act of 2003, the reduction of the tax rate
on dividends does not apply to FREIT dividends other than capital gains
dividends, which are subject to capital gains rates. FREIT's policy is to pass
on at least 90% of its ordinary taxable income to shareholders. FREIT's taxable
income is untaxed at the trust level to the extent distributed to shareholders.
FREIT's dividends of ordinary taxable income will be taxed as ordinary income to
its shareholders and FREIT's capital gains dividends will be taxed as capital
gains to its shareholders. FREIT's Board of Trustees evaluates the dividend to
be declared/paid (if any) on a quarterly basis.

The following tables list the quarterly dividends declared for the three most
recent fiscal years and the dividends as a percentage of taxable income for
those periods.

                      Fiscal Years Ended October 31,
                 2020                       2019      2018
First Quarter   $     -                    $ 0.150   $    -
Second Quarter  $     -                    $ 0.125   $ 0.05
Third Quarter   $     -                    $ 0.125   $ 0.05
Fourth Quarter   $    -                    $ 0.200   $ 0.05
Total For Year   $    -                    $ 0.600   $ 0.15



                                                (in thousands of dollars)                                                   Dividends
   Fiscal       Per          Total              Ordinary            Capital Gain        Taxable                             as a % of
    Year       Share       Dividends        Income-Tax Basis      Income-Tax Basis       Income                          Taxable Income
     2020      $    -     $          -     $                - *   $               -     $      - *              0.0 %
     2019      $ 0.60     $      4,173     $            4,073     $             100     $  3,877              107.6 %
     2018      $ 0.15     $      1,035     $            1,035     $               -     $    630              164.3 %
  *Estimated


INFLATION

Inflation can impact the financial performance of FREIT in various ways. FREIT's
commercial tenant leases normally provide that the tenants bear all or a portion
of most operating expenses, which can reduce the impact of inflationary
increases on FREIT. Apartment leases are normally for a one-year term, which may
allow FREIT to seek increased rents as leases renew or when new tenants are
obtained, subject to prevailing market conditions.

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