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; and risks of real estate development and
acquisitions. 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.




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 rents derived from operating commercial properties.
FREIT's properties are primarily located in northern New Jersey and New York.

Maryland Property Dispositions:

On November 22, 2021, certain affiliates (the "Maryland Sellers") of FREIT
entered into a Purchase and Sale Agreement (the "Maryland Purchase and Sale
Agreement") with MCB Acquisition Company, LLC (the "Maryland Purchaser"), a
third party, pursuant to which the Maryland Sellers agreed to sell three
properties to the Maryland Purchaser. The properties consisted of retail and
office space and a residential apartment community owned by Grande Rotunda, LLC
(the "Rotunda Property"), a shopping center owned by Damascus Centre, LLC (the
"Damascus Property"), and a shopping center owned by WestFREIT Corp. (the
"Westridge Square Property"). FREIT owns 100% of its subsidiary, WestFREIT Corp.
("WestFREIT"), a 60% interest in Grande Rotunda, LLC ("Grande Rotunda"), the
joint venture that owned the Rotunda Property, and a 70% interest in Damascus
Centre, LLC ("Damascus Centre"), the joint venture that owned the Damascus
Property.

The original purchase price for the Rotunda Property, the Damascus Property and
the Westridge Square Property (collectively the "Maryland Properties") under the
Maryland Purchase and Sale Agreement was reduced by $2,723,000 from $267,000,000
to $248,750,269, after giving effect to the $15,526,731 escrow deposit described
below. This reduction in the sales price of $2,723,000 was to account for
improvements and repairs to the Maryland Properties and miscellaneous items
identified by the Maryland Purchaser in the course of its due diligence
inspection. Additionally, the Maryland Purchaser was obligated under the
Maryland Purchase and Sale Agreement to deposit a total of $15,526,731 in escrow
with respect to certain leases at the Maryland Properties, which have not been
executed or where the rent commencement date has not occurred or economic
obligations of the Maryland Sellers under certain leases remain unpaid. Although
there can be no assurance, a portion of the $15,526,731 escrow deposit (the
"Maryland Purchaser Escrow Payment") may be paid to the Maryland Sellers
depending upon the outcome of construction and leasing activities at the
Maryland Properties. The Maryland Purchaser Escrow Payment Agreement provides
for among other things, monthly disbursements from escrow to the Maryland
Purchaser related to the aforementioned tenant lease agreements until the
earlier of (i) the rent commencement date of the respective tenant lease
agreements or (ii) 5-years from the date of the agreement. The release and
amounts of escrowed funds to FREIT, generally, is contingent on the success and
timing of future leasing activities at the Maryland Properties.

The sale of the Maryland Properties having a total net book value of $172.2
million was consummated by the Maryland Sellers and the Maryland Purchaser for a
purchase price of $248,750,269, after giving effect to the $15,526,731 Maryland
Purchaser Escrow Payment. This sale resulted in net proceeds of approximately
$53.9 million (inclusive of approximately $1.9 million in funds released from
the Maryland Purchaser Escrow Payment during the second quarter of Fiscal 2022),
after payment of related

                                      20

  Table of Contents

mortgage debt in the amount of $155.8 million and the corresponding swap
breakage fees of approximately $213,000 related to the early termination of the
interest rate swap contracts on the Damascus Property loan, payment of loans
(including interest) to each of the equity owners in Grande Rotunda in the
amount of approximately $31 million and certain transactional expenses and
transfer taxes including brokerage fees due to Hekemian & Co. of approximately
$6.2 million. As of October 31, 2022, approximately $1,946,000 of the Maryland
Purchaser Escrow Payment has been released from escrow to the Maryland Sellers.
The escrow and related gain on sale were reduced by approximately $1.2 million
due to a change in estimate in the second quarter of Fiscal 2022 related to a
change in the timing of anticipated rent commencement dates for certain tenants,
which will reduce the escrowed funds available to be released to Grande Rotunda.
Approximately $6.3 million of remaining funds are held in a post-closing escrow
for rents anticipated to be fully released in Fiscal 2023 and are included in
"Funds held in post-closing escrow" on the accompanying consolidated balance
sheet as of October 31, 2022. The sale of the Maryland Properties resulted in a
net gain of approximately $68.8 million (as adjusted) (with a consolidated
impact to FREIT of approximately $45.6 million) which includes approximately
$8.2 million of proceeds released and anticipated to be released from funds held
in escrow, a write-off of the straight-line rent receivable of approximately
$2.9 million and a write-off of unamortized lease commissions of approximately
$1.7 million.

On August 4, 2022, the FREIT Board of Directors ("Board") declared a special,
extraordinary, non-recurring cash distribution of approximately $51.5 million,
or $7.50 per share, which was paid on August 30, 2022, to stockholders of record
on August 16, 2022 (with an ex-dividend date of August 31, 2022). This
distribution represented most of the net proceeds of FREIT's sale of its
portfolio of Maryland Properties.

See Note 2 to FREIT’s consolidated financial statements for additional details
on the sale of the Maryland Properties.

The economic and financial environment:As of October 2022, the annual inflation
rate is 7.7%, which is primarily being driven by soaring food prices and energy
costs, labor shortages and supply disruptions while the U.S. unemployment rate
increased slightly to 3.7%. Though inflation is still running near a 40-year
high, it may be showing signs of slowing down since the actual rate for the
month of October 2022 came in lower than the prior month, which was at 8.2%.
While the Federal Reserve has been continuing to raise interest rates in an
effort to lower inflation, the pace at which it may continue to do so is
uncertain leading to uncertainties in the financing market and a volatile
economy.

Residential Properties: Our residential properties continue to generate positive
cash flow while average rents on turned units (apartments which were vacated and
then re-leased to new tenants) from 2021 to 2022 has increased across the
portfolio. Additionally, the rate of increase on renewals for existing tenants
has also been robust over the past year with slight signs of this robustness
starting to soften. These increases should meaningfully contribute to FREIT's
income over time but it is uncertain what impact the significant rise in
inflation and rising interest rates may have on these properties over the next
year.

Commercial Properties: While our retail properties have stabilized from the
impact of the COVID-19 pandemic, certain of our properties still have not
attained pre-pandemic operating levels despite some recovery in brick and mortar
retail. Additionally, the significant rise in inflation and rising interest
rates could have an impact on the operating and financial performance of our
commercial properties.

Debt Financing Availability: Financing has been available to FREIT and its
affiliates. In accordance with certain loan agreements, FREIT may be required to
meet or maintain certain financial covenants throughout the term of the loan.
(See Note 5 to FREIT's consolidated financial statements for additional
details.)

On December 30, 2021, FREIT refinanced its $14.4 million loan (which would have
matured on February 1, 2022) on its Boulders property located in Rockaway, New
Jersey with a new loan held by ConnectOne Bank in the amount of $7,500,000, with
additional funding available to be drawn upon in the amount of $7,500,000 for
corporate needs. This loan is interest-only and has a maturity date of January
1, 2024 with the option of FREIT to extend for one year from the maturity date,
subject to certain provisions of the loan agreement. This refinancing will
provide annual debt service savings of approximately $1,173,000 as a result of
the reduction in the principal amount, a reduction in the annual interest rate
from a fixed rate of 5.37% to a fixed rate of 2.85% and interest-only payments
being required under this new loan. (See Note 5 to FREIT's consolidated
financial statements for additional details.)

On July 22, 2022, Wayne PSC, LLC ("Wayne PSC") refinanced its $22.1 million loan
(inclusive of deferred interest of approximately $136,000), which would have
matured on October 1, 2026, on its Preakness Shopping center located in Wayne,
New Jersey with a new loan held by ConnectOne Bank in the amount of $25,000,000.
This loan is interest-only based on a fixed interest rate of 5% and has a term
of three years with a maturity date of August 1, 2025. Additionally, an interest
reserve escrow was established at closing representing twelve months of interest
of $1,250,000, which can be used to pay monthly interest on this loan with a
requirement to replenish the escrow account back to $1,250,000 when the balance
in the escrow account is reduced to three months of interest. This refinancing
resulted in (i) annual debt service savings of approximately $340,000 due to
interest-only payments; (ii) an increase in the interest rate from a fixed
interest rate of 3.625% to a fixed interest rate of 5%; and (iii) net
refinancing proceeds of approximately $1.1 million which can be used for capital
expenditures and general corporate purposes. As part of the refinancing, Wayne
PSC terminated the interest rate swap contract on the underlying loan resulting
in a realized gain on the swap breakage of approximately $1.4 million, which has
been recorded as a realized gain on the

                                      21

Table of Contents

accompanying consolidated statement of income for the year ended October 31,
2022. (See Notes 5 and 6 to FREIT’s consolidated financial statements for
additional details.)

On August 19, 2022, Westwood Hills, LLC exercised its right, pursuant to the
loan agreement, to extend the term of its $25 million loan on its property
located in Westwood, New Jersey, for an additional six (6) months from an
initial maturity date of October 1, 2022 to a new maturity date of April 1,
2023. This loan was extended on the same terms and conditions as stated in the
loan agreement and has one remaining six (6) month extension. (See Note 5 to
FREIT's consolidated financial statements for additional details.)

Operating Cash Flow: 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, which are
expected to be refinanced and/or extended), 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 annual report
on Form 10-K.

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, 2022 and
2021, and for the years ended October 31, 2022, 2021 and 2020. 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.

                                      22

  Table of Contents

Results of Operations:

Fiscal Years Ended October 31, 2022 and 2021

Summary revenues and net income for the fiscal years ended October 31, 2022
(“Fiscal 2022”) and October 31, 2021 (“Fiscal 2021”) are as follows:

                                                                             Years Ended October 31,
                                                                    2022                2021             Change
                                                                    (in thousands, except per share amounts)
Real estate revenues:
 Commercial properties                                          $      10,644       $      23,317       $ (12,673 )
 Residential properties                                                20,627              26,974          (6,347 )
   Total real estate revenues                                          31,271              50,291         (19,020 )

Operating expenses:
 Real estate operating expenses                                        15,281              22,294          (7,013 )
 General and administrative expenses                                    5,003               5,195            (192 )
 Depreciation                                                           3,995               9,300          (5,305 )
   Total operating expenses                                            24,279              36,789         (12,510 )

Operating income                                                        6,992              13,502          (6,510 )

Investment income                                                         358                 116             242
Net gain on sale of Maryland properties                                68,771                   -          68,771

Net realized gain on Wayne PSC interest rate swap termination 1,415

                   -           1,415
Loss on investment in tenancy-in-common                                  (228 )              (295 )            67
Financing costs                                                        (8,064 )           (12,276 )         4,212
   Net income                                                          69,244               1,047          68,197

Net income attributable to noncontrolling

  interests in subsidiaries                                           (23,252 )              (120 )       (23,132 )
Net income attributable to common equity                        $      45,992       $         927       $  45,065

Earnings per share:
 Basic                                                          $        6.52       $        0.13       $    6.39
 Diluted                                                        $        6.45       $        0.13       $    6.32

Weighted average shares outstanding:

 Basic                                                                  7,055               7,019
 Diluted                                                                7,132               7,022

Real estate revenue for Fiscal 2022 decreased 37.8% to $31,271,000 compared to
$50,291,000 for Fiscal 2021. The decline in revenue was primarily attributable
to the following: (a) a decrease of approximately $20.2 million attributed to
the Maryland Properties sold; offset by (b) an increase from the residential
segment of approximately $1.2 million, excluding the Icon at the Rotunda
Property sold as part of the Maryland Properties, driven by an increase in base
rents across all properties and an increase in the average occupancy rate to
98.2% in Fiscal 2022 from 97.3% in Fiscal 2021.

Net income attributable to common equity (“net income-common equity”) for Fiscal
2022 was $45,992,000 ($6.52 per share basic and $6.45 per share diluted),
compared to $927,000 ($0.13 per share basic and diluted) for Fiscal 2021.

                                      23

Table of Contents

The schedule below provides a non-GAAP detailed analysis of the major changes
that impacted net income-common equity for Fiscal 2022 and Fiscal 2021:

NON-GAAP NET INCOME COMPONENTS

                                                          Years Ended October 31,
                                                     2022           2021          Change
                                                               (In Thousands)

Income from real estate operations:

  Commercial properties                           $    4,217     $   12,094     $   (7,877 )
  Residential properties                              11,773         15,903         (4,130 )
   Total income from real estate operations           15,990         27,997        (12,007 )

Financing costs:
Fixed rate mortgages                                  (4,765 )       (5,783 )        1,018
Floating rate mortgages                               (1,978 )       (5,159 )        3,181
Other - Corporate interest                              (137 )         (225 )           88

Interest rate swap contracts breakage fee               (213 )            -

          (213 )
Mortgage cost amortization                              (971 )       (1,109 )          138
   Total financing costs                              (8,064 )      (12,276 )        4,212

Investment income                                        358            116            242

General & administrative expenses:

  Accounting fees                                       (469 )         (426 

) (43 )

  Legal and professional fees                         (1,452 )       (2,477 

) 1,025

  Directors and consultant fees                       (1,076 )         (950 )         (126 )
  Stock compensation expense                          (1,192 )          (42 )       (1,150 )
  Corporate expenses                                    (814 )       (1,300 )          486
   Total general & administrative expenses            (5,003 )       (5,195 

) 192

Depreciation                                          (3,995 )       (9,300 )        5,305
Loss on investment in tenancy-in-common                 (228 )         (295 )           67
  Adjusted net (loss) income                            (942 )        1,047 

(1,989 )

Net gain on sale of Maryland properties               68,771              -

68,771

Net realized gain on Wayne PSC interest rate
swap termination                                       1,415              -          1,415
  Net income                                          69,244          1,047         68,197

Net income attributable to noncontrolling

   interests in subsidiaries                         (23,252 )         (120 )      (23,132 )
Net income attributable to common equity          $   45,992     $      927

$ 45,065

Adjusted net (loss) income for Fiscal 2022 was adjusted net (loss) of ($942,000)
(($0.13) per share basic and diluted) compared to adjusted net income of
$1,047,000 ($0.15 per share basic and diluted) for Fiscal 2021. 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 sale of
Maryland Properties in Fiscal 2022; a realized gain on the Wayne PSC interest
rate swap contract termination in Fiscal 2022.

The decrease in adjusted net (loss) income for Fiscal 2022 was primarily driven
by the following: (a) a decrease of approximately $3.9 million (with a
consolidated impact to FREIT of approximately $2.8 million) attributed to the
Maryland Properties sold; offset by (b) an increase in revenue of approximately
$1.2 million (with a consolidated impact to FREIT of approximately $1.1
million), excluding the Maryland Properties sold; (c) a decrease in the reserve
for uncollectible rents of approximately $0.3 million (with a consolidated
impact to FREIT of approximately $0.3 million), excluding the Maryland
Properties sold, primarily due to rental revenue being deemed uncollectible and
classified as a reduction in rental revenue in Fiscal 2022; (d) a decrease in
general and administrative expenses ("G&A") of approximately $0.2 million
primarily driven by a decline in legal costs of approximately $1 million
primarily attributed to the legal proceeding between FREIT and certain of its
affiliates and Sinatra Properties, LLC, reincorporation expenses of
approximately $0.5 million incurred in Fiscal 2021, offset by incremental stock
compensation expense of approximately $1.2 million related to the stock option
modification recorded in Fiscal 2022; (e) a decrease in snow removal costs of
approximately $0.1 million (with a consolidated impact to FREIT of approximately
$0.1 million); and (f) an increase in investment income of approximately $0.2
million resulting from a higher interest rate and cash balance in Fiscal 2022
due to the sale of the Maryland Properties.

(Refer to the segment disclosure below for a more detailed discussion of the
financial performance of FREIT’s commercial and residential segments.)

                                      24

  Table of Contents

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 2022, as compared to Fiscal 2021 (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,
                           2022         2021           $             %           2022         2021           $             %           2022         2021
                                    (In Thousands)                                        (In Thousands)                                (In Thousands)
Rental income           $  8,232     $ 17,875     $   (9,643 )     -53.9%     $ 20,203     $ 26,515     $   (6,312 )     -23.8%     $ 28,435     $ 44,390
Reimbursements             2,364        5,311         (2,947 )     -55.5%           19          157           (138 )     -87.9%        2,383        5,468
Other                         30          361           (331 )     -91.7%          405          302            103        34.1%          435          663
Total revenue             10,626       23,547        (12,921 )     -54.9%  

20,627 26,974 (6,347 ) -23.5% 31,253 50,521

Operating expenses 6,427 11,223 (4,796 ) -42.7%

8,854 11,071 (2,217 ) -20.0% 15,281 22,294
Net operating income $ 4,199 $ 12,324 $ (8,125 ) -65.9%

$ 11,773 $ 15,903 $ (4,130 ) -26.0% 15,972 28,227

Average Occupancy % *      66.8%        69.0%                       -2.2%  

     98.2%        97.3%                        0.9%

Reconciliation to consolidated net income-common equity:

  Deferred rents - straight lining                                          

18 (230 )

  Investment income                                                           358           116
  Loss on investment in tenancy-in-common                                   

(228 ) (295 )

  General and administrative expenses                                     

(5,003 ) (5,195 )

  Depreciation                                                            

(3,995 ) (9,300 )

  Net gain on sale of Maryland properties                                  68,771             -
  Net realized gain on Wayne PSC interest rate swap termination             1,415             -
  Financing costs                                                          (8,064 )     (12,276 )
        Net income                                                         69,244         1,047

Net income attributable to noncontrolling interests in subsidiaries (23,252 ) (120 )

        Net income attributable to common equity                        $  45,992     $     927




*Average occupancy rate excludes the Rotunda Property, the Damascus Property and
the Westridge Square Property from all periods presented as the properties were
sold in Fiscal 2022. See Note 2 to FREIT's consolidated financial statements for
further details.

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, sold 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 five (5) separate properties, excluding the
Rotunda Property, the Westridge Square Property and the Damascus Property, which
were sold on December 30, 2021, January 7, 2022 and January 10, 2022,
respectively. Three of these properties are multi-tenanted retail centers, one
is a single tenanted retail center located in Glen Rock, New Jersey 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. (See Note 2 to FREIT's consolidated financial
statements for additional details on the sale of the Maryland Properties.)

As indicated in the table above under the caption Segment Information, total
revenue and NOI from FREIT's commercial segment for Fiscal 2022 decreased by
54.9% and 65.9%, respectively, as compared to Fiscal 2021. Average occupancy for
all commercial properties, excluding the Maryland Properties sold, for Fiscal
2022 decreased by 2.2% as compared to Fiscal 2021.

The decline in revenue for Fiscal 2022 was primarily attributable to the
Maryland Properties sold. The decrease in NOI for Fiscal 2022 was primarily
attributable to the following: (a) a decrease of approximately $8.4 million
attributed to the Maryland Properties sold; offset by (b) a decline in snow
removal costs of approximately $0.1 million, excluding the Maryland Properties
sold; and (c) a decrease in the reserve for uncollectible rents of approximately
$0.2 million, excluding the Maryland Properties sold.

                                      25

Table of Contents

Same Property Operating Results: FREIT's commercial segment currently contains
five (5) same properties. (See definition of same property under Segment
Information above.) The Rotunda Property, the Westridge Square Property and the
Damascus Property were excluded from same property results for all periods
presented because these properties were sold in Fiscal 2022. Same property
revenue and NOI for Fiscal 2022 decreased by 1.6% and increased by 6.5%,
respectively, as compared to Fiscal 2021. The changes resulted from the factors
discussed in the immediately preceding paragraph.

Leasing: The following table reflects 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 2022.



                                                                                                                             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)                    9          137,634     $          6.74     $          6.37             5.8%     $             -     $          0.02

Non-comparable leases                    5           11,875     $         26.37                N/A              N/A      $          1.07     $          1.32

Total leasing activity                  14          149,509


(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 six (6) multi-family apartment buildings or complexes
totaling 792 apartment units, excluding the Icon at the Rotunda Property, which
was sold as part of the Maryland Properties on December 30, 2021 (see Note 2 to
FREIT's consolidated financial statements) and the Pierre Towers property, which
was converted to a TIC (see Note 3 to FREIT's consolidated financial
statements).

As indicated in the table above under the caption Segment Information, total
revenue and NOI from FREIT's residential segment for Fiscal 2022 decreased by
23.5% and 26%, respectively, as compared to Fiscal 2021. Average occupancy for
all residential properties, excluding the Icon at the Rotunda Property sold, for
Fiscal 2022 increased by 0.9% as compared to Fiscal 2021.

The decrease in revenue for Fiscal 2022 was primarily attributable to the
following: (a) a decrease of approximately $7.5 million attributed to the Icon
at the Rotunda Property sold; offset by (b) an increase of approximately $1.2
million, excluding the Icon at the Rotunda Property sold, primarily driven by an
increase in base rents across all properties and an increase in the average
occupancy rate to 98.2% in Fiscal 2022 from 97.3% in Fiscal 2021. The decrease
in NOI for Fiscal 2022 was primarily attributable to the following: (a) a
decrease of approximately $5.2 million attributed to the Icon at the Rotunda
Property sold; (b) an increase in utilities expense of approximately $0.1
million, excluding the Icon at the Rotunda Property sold; offset by (c) an
increase in revenue of approximately $1.2 million, excluding the Icon at the
Rotunda Property sold; and (d) a decrease in the reserve for uncollectible rents
of approximately $0.1 million, excluding the Icon at the Rotunda Property sold.

Same Property Operating Results: FREIT's residential segment currently contains
six (6) same properties. (See definition of same property under Segment
Information above.) The Icon at the Rotunda Property was excluded from same
property results for all periods presented because this property was sold in
Fiscal 2022. Same property revenue and NOI for Fiscal 2022 increased by 6.9% and
11.2%, respectively, as compared to Fiscal 2021. 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 Icon at the Rotunda Property, which was sold in
Fiscal 2022) at the end of Fiscal 2022 and Fiscal 2021 were $2,085 and $1,939,
respectively. 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 $198,000 and $191,000, respectively.

Capital expenditures: FREIT tends to spend more in any given year on maintenance
and capital improvements at its residential properties which were constructed
more than 25 years ago (Steuben Arms, Berdan Court and Westwood Hills
properties) than on its newer properties (Boulders, Regency and Station Place
properties). Funds for these capital projects are available from cash flow from
the property's operations and cash reserves.

                                      26

  Table of Contents

FINANCING COSTS



                                                                         Years Ended October 31,
                                                                    2022                        2021
                                                                        (In Thousands of Dollars)
Fixed rate mortgages (a):
  1st Mortgages
  Existing                                                     $        4,229             $          5,783
  New                                                                     536                            -
Variable rate mortgages:
  1st Mortgages
  Existing                                                              1,978                        5,159
  New                                                                       -                            -
Interest rate swap contracts breakage fee                                 213                            -
Other                                                                     137                          225
Total financing costs, gross                                            7,093                       11,167
   Amortization of mortgage costs                                         971                        1,109
Total financing costs, net                                     $        8,064             $         12,276

(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 2022 decreased by approximately $4,212,000
or 34.3%, compared to Fiscal 2021 which was primarily attributable to the
following: (a) a decline of approximately $4,513,000 attributed to the pay-down
of the loans outstanding on the Maryland Properties sold in Fiscal 2022; (b) a
decrease of approximately $382,000 attributed to the refinancing of the loan on
the Boulders property in Fiscal 2022 resulting in a reduction in the interest
rate from 5.37% to 2.85% and in the principal balance from approximately $14.4
million to $7.5 million; offset by (c) an increase of approximately $213,000
attributed to a breakage fee on the early termination of the interest rate swap
contracts relating to the underlying loan on the Damascus Property, which was
repaid from the net proceeds of the sale of the Damascus Property in Fiscal
2022; and (d) an increase of approximately $148,000 related to the write-off of
deferred mortgage costs on the Wayne PSC mortgage loan previously held with
People's United Bank which was refinanced with a new lender in Fiscal 2022. (See
Note 2 to FREIT's consolidated financial statements for additional details on
the sale of the Maryland Properties.)

INVESTMENT INCOME

Investment income for Fiscal 2022 was $358,000 as compared to $116,000 for
Fiscal 2021. 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 & Co. employees, including
Robert S. Hekemian, Jr., the Chief Executive Officer, President and a Director
of FREIT, David B. Hekemian, a Director 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. In Fiscal 2022, the secured loans receivable
was repaid with proceeds received from the sale of the Rotunda Property. (See
Note 8 to FREIT's consolidated financial statements for additional details.) The
increase in investment income for Fiscal 2022 was primarily driven by a higher
interest rate and cash balance in Fiscal 2022 due to the sale of the Maryland
Properties. (See Note 2 to FREIT's consolidated financial statements for
additional details on the sale of the Maryland Properties.)

GENERAL AND ADMINISTRATIVE EXPENSES (“G&A”)

G&A expense for Fiscal 2022 was $5,003,000 as compared to $5,195,000 for Fiscal
2021. The primary components of G&A are legal and professional fees, directors'
fees, corporate expenses and accounting/auditing fees. The decrease in G&A for
Fiscal 2022 was primarily driven by a decline in legal costs of approximately $1
million primarily attributed to the legal proceeding between FREIT and certain
of its affiliates and Sinatra Properties, LLC, reincorporation expenses of
approximately $0.5 million incurred in Fiscal 2021, offset by incremental stock
compensation expense of approximately $1.2 million related to the stock option
modification recorded in Fiscal 2022 (see Note 10 to FREIT's consolidated
financial statements for additional details on the compensation expense).

DEPRECIATION

Depreciation expense from operations for Fiscal 2022 was $3,995,000 as compared
to $9,300,000 for Fiscal 2021. The decline in depreciation expense for Fiscal
2022 was primarily attributable the sale of the Maryland Properties. (See Note 2
to FREIT's consolidated financial statements for additional details on the

sale
of the Maryland Properties.)

                                      27

  Table of Contents

Results of Operations:

Fiscal Years Ended October 31, 2021 and 2020

Summary revenues and net income for Fiscal 2021 and October 31, 2020 ("Fiscal
2020") are as follows:



                                                                Years Ended October 31,
                                                       2021                2020              Change
                                                        (in thousands, except per share amounts)
Real estate revenues:
 Commercial properties                             $      23,317       $      24,089       $     (772 )
 Residential properties                                   26,974              28,638           (1,664 )
   Total real estate revenues                             50,291              52,727           (2,436 )

Operating expenses:

 Real estate operating expenses                           22,294              22,922             (628 )
 Third party transaction costs                                 -               4,606           (4,606 )
 General and administrative expenses                       5,195               3,821            1,374
 Depreciation                                              9,300              10,341           (1,041 )
 Tenant improvement write-off due to COVID-19                  -           

   7,277           (7,277 )
   Total operating expenses                               36,789              48,967          (12,178 )

Operating income                                          13,502               3,760            9,742

Investment income                                            116                 204              (88 )

Gain on deconsolidation of subsidiary                          -              27,680          (27,680 )
Loss on investment in tenancy-in-common                     (295 )         

    (202 )            (93 )
Financing costs                                          (12,276 )           (14,122 )          1,846
   Net income                                              1,047              17,320          (16,273 )

Net (income) loss attributable to noncontrolling

  interests in subsidiaries                                 (120 )             3,233           (3,353 )
Net income attributable to common equity           $         927       $   

20,553 $ (19,626 )

Earnings per share - basic and diluted:            $        0.13       $   

2.94 $ (2.81 )

Weighted average shares outstanding:

 Basic                                                     7,019               6,992
 Diluted                                                   7,022               6,994

Real estate revenue for Fiscal 2021 decreased 4.6% to $50,291,000 compared to
$52,727,000 for Fiscal 2020. The decline in revenue was primarily attributable
to the following: (a) a decline in revenue of approximately $2.7 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
tenancy-in-common form of ownership ("TIC") as of February 28, 2020; (b) a
decrease in reimbursement revenue of approximately $0.4 million primarily
attributed to the settle-ups of Common Area Maintenance with commercial tenants
in the fiscal quarter ended October 31, 2021; (c) a decline in revenue from the
commercial segment of approximately $0.4 million, (net of lease termination
payments received from PetValu in the amount of approximately $0.3 million and a
settlement payment in the amount of approximately $0.2 million received from
Cobb Theatre at the Rotunda retail property), primarily driven by a decline in
the average occupancy rate to 76.3% in Fiscal 2021 from 79.7% in Fiscal 2020;
(d) an insurance reimbursement received at the Icon property in Fiscal 2020 in
the amount of approximately $0.2 million; offset by (e) an increase in revenue
from the residential segment of approximately $1.2 million primarily driven by
an increase in the average occupancy rate to 96.5% in Fiscal 2021 from 94.0% in
Fiscal 2020 and an increase in base rents across most properties.

Net income attributable to common equity ("net income-common equity") for Fiscal
2021 was $927,000 ($0.13 per share basic and diluted), compared to $20,533,000
($2.94 per share basic and diluted) for Fiscal 2020.

                                      28

Table of Contents

The schedule below provides a non-GAAP detailed analysis of the major changes
that impacted net income-common equity for Fiscal 2021 and Fiscal 2020:

NON-GAAP NET INCOME COMPONENTS

                                                          Years Ended October 31,
                                                     2021          2020         Change
                                                              (In Thousands)

Income from real estate operations:

  Commercial properties                            $  12,094     $  12,755     $    (661 )
  Residential properties                              15,903        17,050        (1,147 )
   Total income from real estate operations           27,997        29,805        (1,808 )

Financing costs:
Fixed rate mortgages                                  (5,783 )      (7,401 )       1,618
Floating rate mortgages                               (5,159 )      (5,303 )         144
Other - Corporate interest                              (225 )        (329 )         104
Mortgage cost amortization                            (1,109 )      (1,089 )         (20 )
   Total financing costs                             (12,276 )     (14,122 )       1,846

Investment income                                        116           204           (88 )

General & administrative expenses:

  Accounting fees                                       (426 )        (558

) 132

  Legal and professional fees                         (2,477 )      (1,074

) (1,403 )

  Directors and consultant fees                         (950 )      (1,205

)         255
  Stock compensation expense                             (42 )         (46 )           4
  Corporate expenses                                  (1,300 )        (938 )        (362 )
   Total general & administrative expenses            (5,195 )      (3,821 )      (1,374 )

Third party transaction costs                              -        (4,606 )       4,606
Depreciation                                          (9,300 )     (10,341 )       1,041

Loss on investment in tenancy-in-common                 (295 )        (202

) (93 )

  Adjusted net income (loss)                           1,047        (3,083

) 4,130

Tenant improvement write-off due to COVID-19               -        (7,277 )       7,277
Gain on deconsolidation of subsidiary                      -        27,680 

(27,680 )

  Net income                                           1,047        17,320  

(16,273 )

Net (income) loss attributable to noncontrolling

   interests in subsidiaries                            (120 )       3,233        (3,353 )
Net income attributable to common equity           $     927     $  20,553 

$ (19,626 )

Adjusted net income (loss) for Fiscal 2021 was net income of $1,047,000 ($0.15
per share basic and diluted) compared to net (loss) of ($3,083,000) (($0.44) per
share basic and diluted) for Fiscal 2020. Adjusted net income (loss) 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; and a tenant improvement write-off due to
COVID-19 in Fiscal 2020.

The increase in adjusted net income (loss) for Fiscal 2021 was primarily driven
by the following: (a) third party transaction costs incurred in Fiscal 2020 of
approximately $4.6 million; (b) a decrease in net financing costs of
approximately $1.2 million (with a consolidated impact to FREIT of approximately
$0.9 million), (excluding the impact of the deconsolidation of the operating
results of the Pierre Towers from FREIT's operating results of approximately
$0.6 million in interest expense), primarily driven by a decline in interest
rates on variable mortgage loans; (c) a decline in depreciation expense of
approximately $0.6 million (with a consolidated impact to FREIT of approximately
$0.3 million), (excluding the impact of the deconsolidation of the operating
results of the Pierre Towers from FREIT's operating results of approximately
$0.5 million in depreciation expense), primarily driven by the tenant
improvements written off in Fiscal 2020; (d) a decline in expense for the
reserve of uncollectible rents for commercial tenants of approximately $0.4
million (with a consolidated impact to FREIT of approximately $0.3 million); (e)
an increase in revenue, excluding the impact of the conversion of the Pierre
Towers property to a TIC, in the amount of approximately $0.2 million (with a
consolidated impact to FREIT of approximately $0.3 million); (f) a decrease in
leasing costs in the amount of approximately $0.2 million (with a consolidated
impact to FREIT of approximately $0.1 million) resulting from the write-off of
unamortized lease commissions in Fiscal 2020 due to the Cobb Theatres' rejection
of its lease; offset by (g) an increase in general & administrative expenses of
approximately $1.4 million primarily driven by an increase in legal costs in
Fiscal 2021 attributed to the legal proceeding between FREIT and certain of its
affiliates and Sinatra Properties, LLC and reincorporation expenses incurred in
Fiscal 2021 to reincorporate in the state of Maryland; (h) an increase in snow
removal costs due to a harsher winter in Fiscal 2021 of approximately $0.5
million (with a consolidated impact to FREIT of approximately $0.4 million); (i)
an increase in repairs and maintenance expense of approximately $0.5 million
(with a

                                      29

  Table of Contents

consolidated impact to FREIT of approximately $0.3 million), (excluding the
impact of the deconsolidation of the operating results of the Pierre Towers from
FREIT's operating results of approximately $0.2 million in repairs and
maintenance expense); and (j) a decrease in adjusted net income with an impact
of approximately $0.3 million attributed to the Pierre Towers deconsolidation
from FREIT's operating results in Fiscal 2020 (with a consolidated impact to
FREIT of approximately $0.2 million). (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 2021, as compared to Fiscal 2020 (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,
                          2021         2020           $             %           2021         2020           $             %           2021         2020
                                  (In Thousands)                                         (In Thousands)                                (In Thousands)

Rental income $ 17,875 $ 18,769 $ (894 ) -4.8%

  $ 26,515     $ 27,812     $   (1,297 )      -4.7%     $ 44,390     $ 46,581
Reimbursements            5,311        5,690         (379 )        -6.7%          157          150              7         4.7%        5,468        5,840
Other                       361           27          334        1237.0%          302          676           (374 )     -55.3%          663          703
Total revenue            23,547       24,486         (939 )        -3.8%   

26,974 28,638 (1,664 ) -5.8% 50,521 53,124

Operating expenses 11,223 11,334 (111 ) -1.0%

    11,071       11,588           (517 )      -4.5%       22,294       

22,922

Net operating income $ 12,324 $ 13,152 $ (828 ) -6.3%

$ 15,903 $ 17,050 $ (1,147 ) -6.7% 28,227 30,202

Average Occupancy %       76.3%        79.7%                       -3.4%        96.5% *     94.0%*                        2.5%





                         Reconciliation to consolidated net income-common equity:
                         Deferred rents - straight lining                                (230 )        (397 )
                         Investment income                                                116           204
                         Third party transaction costs                                      -        (4,606 )
                         Gain on deconsolidation of subsidiary                              -        27,680
                         Loss on investment in tenancy-in-common                         (295 )        (202 )
                         General and administrative expenses                           (5,195 )      (3,821 )
                         Depreciation                                                  (9,300 )     (10,341 )
                         Tenant improvement write-off due to COVID-19                       -        (7,277 )
                         Financing costs                                              (12,276 )     (14,122 )
                               Net income                                               1,047        17,320
                         Net (income) loss attributable to noncontrolling
                         interests in subsidiaries                                       (120 )       3,233
                               Net income attributable to common equity             $     927     $  20,553




  *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, sold 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.

As indicated in the table above under the caption Segment Information, total
revenue and NOI from FREIT's commercial segment for Fiscal 2021 decreased by
3.8% and 6.3%, respectively, as compared to Fiscal 2020. The decline in revenue
for Fiscal 2021 was primarily attributed to the following: (a) a decrease in
reimbursement revenue of approximately $0.4 million primarily attributed to the
settle-ups of Common Area Maintenance with commercial tenants in the fiscal
quarter ended October 31, 2021; and (b) a decline in revenue in the amount of
approximately $0.6 million (net of lease termination payments received from
PetValu in the amount of approximately $0.3 million and a settlement payment in
the amount of approximately $0.2

                                      30

Table of Contents

million received from Cobb Theatre at the Rotunda retail property) primarily
attributable to a decline in the average occupancy rate to 76.3% in Fiscal 2021
from 79.7% in Fiscal 2020. The decline in NOI for Fiscal 2021 was primarily
attributable to the following: (a) a decline in revenue of approximately $0.9
million as described above; (b) an increase in snow removal costs due to a
harsher winter in Fiscal 2021 of approximately $0.3 million; (c) an increase in
repairs and maintenance expense of approximately $0.2 million; offset by (d) a
decline in expense for the reserve of uncollectible rents of approximately $0.4
million; and (e) a decrease in leasing costs in the amount of approximately $0.2
million resulting from the write-off of unamortized lease commissions in Fiscal
2020 due to the Cobb Theatres' rejection of its lease.

Same Property Operating Results: FREIT's commercial segment currently contains
eight (8) same properties. (See definition of same property under Segment
Information above.) Since all of FREIT's commercial properties are considered
same properties in Fiscal 2021 and Fiscal 2020, refer to the preceding paragraph
for discussion of changes in same property results.

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 2021.



                                                                                                                      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          148,190     $         13.83     $         16.64           -16.9%     $             -     $          0.21

Non-comparable leases             7           12,514     $         32.79                N/A              N/A      $          1.27     $          1.63

Total leasing activity           30          160,704





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

(a)

Comparable leases (b)            13           30,605     $         33.01     $         32.07             2.9%     $             -     $              0.34

Non-comparable leases             2            4,053     $         23.72                N/A              N/A      $             -     $              1.34

Total leasing activity           15           34,658



(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.

During the first quarter of Fiscal 2021, Pet Valu, Inc., a pet store tenant,
vacated several stores located in shopping centers owned by FREIT affiliates
(Wayne PSC, Damascus Centre and Grande Rotunda) and terminated the related
leases early paying an aggregate lease termination fee in the amount of
approximately $260,000 (with a consolidated impact to FREIT of approximately
$140,000).

On May 4, 2021, Burlington amended its lease at the Westridge Square Shopping
Center (owned by WestFREIT) extending the term of the lease for a period of one
(1) year and ninety (90) days commencing on December 1, 2021 and expiring on
February 28, 2023 ("Fourth Extension Period"). The fixed rent during this Fourth
Extension Period was reduced from $59,120 per month to $35,830 per month.
Additionally, Burlington has the right to terminate the lease at any time prior
to the last day of the Fourth Extension Period by providing at least twelve (12)
months prior written notice of such termination (the "Termination Notice"). In
the event that Burlington delivers the Termination Notice, the term of the lease
shall automatically end on the last day of the twelfth (12th) full calendar
month immediately following receipt of the Termination Notice. On January 7,
2022, the property owned by WestFREIT was sold. (See Note 2 to FREIT's
consolidated financial statements for additional details.)

On April 26, 2020, CB Theatre Experience, LLC filed for protection under Chapter
11 of the bankruptcy code as disclosed in the bankruptcy filings. The CB Theatre
Experience, LLC (known as "Cobb Theatre") at the Rotunda retail property in
Baltimore, Maryland has been closed since April 2020 due to the mandated shut
down related to the COVID-19 pandemic and on July 14, 2020 rejected its lease at
this property as of June 30, 2020. During the first quarter ended January 31,
2021, FREIT received a settlement payment from Cobb Theatre in the amount of
approximately $0.2 million (with a consolidated impact to FREIT of approximately
$0.1 million).

The properties owned by Grande Rotunda, WestFREIT and Damascus Centre were sold
on December 30, 2021, January 7, 2022 and January 10, 2022, respectively. See
Note 2 to FREIT's consolidated financial statements for additional details.

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

                                      31

Table of Contents

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. (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 2021 decreased by
5.8% and 6.7%, respectively, as compared to Fiscal 2020. The decline in revenue
for Fiscal 2021 was primarily attributable to the following: (a) a
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
resulting in a decline in revenue of approximately $2.7 million; (b) an
insurance reimbursement received at the Icon property in Fiscal 2020 in the
amount of approximately $0.2 million; offset by (c) an increase in revenue of
approximately $1.2 million driven by an increase in the average occupancy rate
by approximately 2.5% over Fiscal 2020 and an increase in base rent across most
properties. The decline in NOI for Fiscal 2021 was primarily attributable to the
following: (a) a 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 resulting in a decline in NOI of approximately $1.3 million;
(b) an increase in repairs and maintenance expense of approximately $0.3
million; (c) an increase in operating expenses of approximately $0.3 million
primarily driven by an increase in snow removal costs due to a harsher winter in
Fiscal 2021 and an increase in janitorial costs; (d) an increase in advertising
expense of approximately $0.1 million; and (e) an increase in expense for the
reserve of uncollectible rents of approximately $0.1 million; offset by (f) an
increase in revenue of approximately $1 million (excluding the impact of the
Pierre Towers deconsolidation).

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 because this property was deconsolidated and
converted to a TIC as of February 28, 2020. Same property revenue and NOI
increased by 3.8% and 1.1%, respectively, from Fiscal 2020. 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 2021 and Fiscal
2020 were $1,998 and $1,953, respectively. 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 $281,000 and $276,000, 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,
                                                                    2021                         2020
                                                                        (In Thousands of Dollars)
Fixed rate mortgages (a):
  1st Mortgages
  Existing                                                     $        5,783               $         7,401
  New                                                                       -                             -
Variable rate mortgages:
  1st Mortgages
  Existing                                                              5,159                         5,211
  New                                                                       -                            92
Other                                                                     225                           329
Total financing costs, gross                                           11,167                        13,033
   Amortization of mortgage costs                                       1,109                         1,089
Total financing costs, net                                     $       12,276               $        14,122

(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.

                                      32

  Table of Contents

Total net financing costs for Fiscal 2021 decreased by approximately $1,846,000
or 13.1%, compared to Fiscal 2020 which is attributable to the following: (a) a
decline in interest on the variable mortgage loans for the Rotunda and WestFREIT
properties of approximately $1,105,000 resulting from lower interest rates (See
Note 2 to FREIT's consolidated financial statements for further details); and
(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 $645,000. (See Note 3 to
FREIT's consolidated financial statements for further details on the
deconsolidation of the Pierre Towers property.)

INVESTMENT INCOME

Investment income for Fiscal 2021 was $116,000 as compared to $204,000 for
Fiscal 2020. 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 & Co. employees, including
Robert S. Hekemian, Jr., the Chief Executive Officer, President and a Director
of FREIT, David B. Hekemian, a Director 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 2021 was $5,195,000 as compared to $3,821,000 for Fiscal
2020. The primary components of G&A are accounting/auditing fees, legal and
professional fees, directors' and consultant fees and corporate expenses. The
increase in G&A costs for Fiscal 2021 was primarily driven by the following: (a)
an increase in legal costs of approximately $1,403,000 primarily resulting from
the legal proceeding between FREIT and certain of its affiliates and Sinatra
Properties, LLC; (b) an increase in corporate expenses of approximately $362,000
primarily attributed to reincorporation expenses incurred in Fiscal 2021 of
approximately $493,000 to reincorporate in the state of Maryland offset by costs
incurred in Fiscal 2020 for the formation and transfer of the Pierre subsidiary
to a TIC of approximately $293,000; offset by (c) a decline in directors' and
consultant fees of approximately $255,000.

THIRD PARTY TRANSACTION COSTS

The Special Committee of the Board ("Special Committee") incurred on behalf of
the Company third party transaction costs for advisory, legal and other expenses
primarily related to the Purchase and Sale Agreement and the Plan of Liquidation
(See Notes 14 and 15 for additional details) in the amount of approximately $0
for Fiscal 2021 as compared to approximately $4,606,000 for Fiscal 2020. On
April 30, 2020, the Sellers delivered written notice to the Purchaser of the
Sellers' termination of the Purchase and Sale Agreement (See Note 14 for
details) and on May 7, 2020, the Board approved the elimination of the Special
Committee. No further transaction costs were incurred thereafter.

DEPRECIATION

Depreciation expense from operations for Fiscal 2021 was $9,300,000 as compared
to $10,341,000 for Fiscal 2020. The decline in depreciation expense in Fiscal
2021 was primarily attributable to the following: (a) a decline in the amount of
approximately $460,000 resulting from the deconsolidation of the operating
results of the Pierre Towers property from FREIT's operating results as of
February 28, 2020 (See Note 3 to FREIT's consolidated financial statements for
further details); and (b) the remainder of the decline is primarily related to
tenant improvements written off in Fiscal 2020.

                                      33

Table of Contents

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $7.3 million for Fiscal 2022
compared to net cash provided by operating activities of $12.2 million for
Fiscal 2021. 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 which are expected to be
refinanced and/or extended), real estate taxes, dividends, 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 annual report
on Form 10-K.

As of October 31, 2022, FREIT had cash, cash equivalents and restricted cash
totaling $58.5 million, compared to $39 million at October 31, 2021. The
increase in cash in Fiscal 2022 was primarily attributable to approximately
$249.7 million in net cash provided by investing activities including capital
expenditures and $7.3 million in net cash provided by operating activities
offset by approximately $237.6 million in net cash used in financing activities.
The increase in cash of approximately $19.5 million was primarily attributed to
the following: (a) a distribution of net proceeds received from the sale of the
Rotunda Property of approximately $54.4 million (inclusive of a loan repayment
from Grande Rotunda of approximately $27.7 million and repayment of secured
loans receivable including accrued interest by certain members in Rotunda 100 of
approximately $5.3 million); (b) a distribution of net proceeds received from
the sale of the Damascus Property of approximately $11.8 million; (c) net
proceeds received from the sale of the Westridge Square Property of
approximately $0.1 million; (d) anticipated funds to be released of
approximately $6.3 million and funds released of approximately $1.9 million from
the funds held in post-closing escrow for rents related to the sale of the
Maryland Properties; (e) net proceeds received from the refinancing of the Wayne
PSC loan of approximately $3.4 million (inclusive of an interest reserve escrow
balance of approximately $0.9 million as of October 31, 2022); (f) $2 million in
proceeds received from the exercise of stock options in October 2022; offset by
(g) a loan pay-down including closing costs of approximately $7.6 million
attributed to the refinancing of the loan on the Boulders property; and (h)
dividends paid in Fiscal 2022 of approximately $53.5 million (inclusive of a
$51.5 million dividend distribution of capital gain/proceeds received from sale
of Maryland Properties). (See Note 2 to FREIT's consolidated financial
statements for additional details on the sale of the Maryland Properties.)

In Fiscal 2017, Grande Rotunda 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 held with Wells Fargo at
that time was at its maximum level, with no additional funding available to
draw. Accordingly, during Fiscal 2017 the equity owners in Grande Rotunda
contributed their respective pro-rata share of any cash needs through loans to
Grande Rotunda. In Fiscal 2021, Grande Rotunda repaid $7 million to the equity
owners in Grande Rotunda based on their respective pro-rata share resulting in a
loan repayment to Rotunda 100 of approximately $2.8 million. As of October 31,
2021, Rotunda 100 had funded Grande Rotunda with approximately $3.3 million
(including interest) which was included in "Due to affiliate" on the
accompanying consolidated balance sheet. On December 30, 2021, the Rotunda
Property was sold and Grande Rotunda repaid approximately $31 million to the
equity owners in Grande Rotunda resulting in a loan repayment to Rotunda 100 of
approximately $3.3 million. As of October 31, 2022, all loans were repaid in
full to each of the equity owners in Grande Rotunda.

Credit Line: FREIT's revolving line of credit provided by 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, 2022 and 2021, 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: On August 4, 2022, the FREIT Board of Directors ("Board") declared a
special, extraordinary, non-recurring cash distribution of approximately $51.5
million, or $7.50 per share, which was paid on August 30, 2022, to stockholders
of record on August 16, 2022 (with an ex-dividend date of August 31, 2022). (See
Note 2 to FREIT's consolidated financial statements for additional details.) On
September 28, 2022, the Board declared an ordinary dividend of $1.50 per share,
which was paid on December 15, 2022 to stockholders of record on December 1,
2022. The Board declared dividends totaling approximately $65,163,000 ($9.20 per
share) to stockholders of record during Fiscal 2022. The Board will continue to
evaluate the dividend on a quarterly basis and there can be no assurance that
dividends will be declared for any future period. In addition, the amount of the
dividend declared on September 28, 2022 is not necessarily indicative of the
amount of any dividends that may be declared in the future.

                                      34

Table of Contents

As of October 31, 2022, FREIT's aggregate outstanding mortgage debt was $139.2
million, which bears a weighted average interest rate of 4.72% and an average
life of approximately 2.46 years. FREIT's 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                         2023     2024    2025    2026    2027    2028    2029
($ in millions)
                                   $42.1

Mortgage “Balloon” Payments (A) $16.5 $38.9 $0.0 $0.0

 $10.5   $26.0

                          (A) Includes the following:

                              (1) A loan on the Westwood Hills property, which is a
                                  residential property located in Westwood, New Jersey, in
                                  the amount of approximately $25 million. Pursuant to the
                                  loan agreement, this loan was extended for an additional
                                  six (6) months from an initial maturity date of October
                                  1, 2022 to a new maturity date of April 1, 2023. This
                                  loan was extended on the same terms and conditions as
                                  stated in the loan agreement and has one remaining six
                                  (6) month extension. (See Note 5 to FREIT's consolidated
                                  financial statements for additional details.)

                              (2) A loan on the Westwood Plaza shopping center, located in
                                  Westwood, New Jersey, in the amount of approximately
                                  $17.1 million, which is maturing on February 1, 2023. The
                                  Company is in the process of extending this loan with the
                                  current lender, Valley National Bank, for one (1) year.
                                  Under the terms and conditions of this loan modification,
                                  the loan will be payable based on the existing monthly
                                  installments of $129,702 including a fixed interest rate
                                  based on the Wall Street Journal Prime at the time of the
                                  closing on this extension (currently approximately
                                  7.00%). Additionally, FREIT will be required to prepay
                                  the annualized principal and interest payments for one
                                  (1) year, which will be held in an account at Valley
                                  National Bank and will be used to make monthly payments
                                  on the loan. Management expects this loan to be
                                  modified/extended, however, until such time as a
                                  definitive agreement providing for a
                                  modification/extension of this loan is entered into,
                                  there can be no assurance this loan will be
                                  modified/extended. (See Note 5 to FREIT's consolidated
                                  financial statements for additional details.)

The following table shows the estimated fair value and carrying value of FREIT’s
long-term debt, net at October 31, 2022 and 2021:

($ in Millions) October 31, 2022 October 31, 2021

Fair Value                $132.2             $301.6

Carrying Value, Net       $138.1             $299.9

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, 2022, a 1%
interest rate increase would reduce the fair value of FREIT's debt by $3
million, and a 1% decrease would increase the fair value by $3.1 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 stockholders.

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. 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 had a maturity date of October 1, 2022.
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

                                      35

  Table of Contents

Hills with FREIT receiving approximately $2.2 million based on its 40%
membership interest in Westwood Hills. On August 19, 2022, Westwood Hills, LLC
exercised its right, pursuant to the loan agreement, to extend the term of its
$25 million loan on its property located in Westwood, New Jersey, for an
additional six (6) months from an initial maturity date of October 1, 2022 to a
new maturity date of April 1, 2023. This loan was extended on the same terms and
conditions as stated in the loan agreement and has one remaining six (6) month
extension. As of October 31, 2022, $25,000,000 of this loan was drawn and
outstanding and the interest rate was 7.13%. (See Note 5 to FREIT's consolidated
financial statements for additional details.)

On December 30, 2021, FREIT refinanced its $14.4 million loan (which would have
matured on February 1, 2022) on its Boulders property located in Rockaway, New
Jersey with a new loan held by ConnectOne Bank in the amount of $7,500,000, with
additional funding available to be drawn upon in the amount of $7,500,000 for
corporate needs. This loan is interest-only and has a maturity date of January
1, 2024 with the option of FREIT to extend for one year from the maturity date,
subject to certain provisions of the loan agreement. This refinancing will
provide annual debt service savings of approximately $1,173,000 as a result of
the reduction in the principal amount, a reduction in the annual interest rate
from a fixed rate of 5.37% to a fixed rate of 2.85% and interest-only payments
being required under this new loan.

On July 22, 2022, Wayne PSC refinanced its $22.1 million loan (inclusive of
deferred interest of approximately $136,000), which would have matured on
October 1, 2026, on its Preakness Shopping center located in Wayne, New Jersey
with a new loan held by ConnectOne Bank in the amount of $25,000,000. This loan
is interest-only based on a fixed interest rate of 5% and has a term of three
years with a maturity date of August 1, 2025. Additionally, an interest reserve
escrow was established at closing representing twelve months of interest of
$1,250,000, which can be used to pay monthly interest on this loan with a
requirement to replenish the escrow account back to $1,250,000 when the balance
in the escrow account is reduced to three months of interest. This refinancing
resulted in (i) annual debt service savings of approximately $340,000 due to
interest-only payments; (ii) an increase in the interest rate from a fixed
interest rate of 3.625% to a fixed interest rate of 5%; and (iii) net
refinancing proceeds of approximately $1.1 million which can be used for capital
expenditures and general corporate purposes. As part of the refinancing, Wayne
PSC terminated the interest rate swap contract on the underlying loan resulting
in a realized gain on the swap breakage of approximately $1.4 million, which has
been recorded as a realized gain on the accompanying consolidated statement of
income for the year ended October 31, 2022. (See Notes 5 and 6 to FREIT's
consolidated financial statements for additional details.)

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 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 generally
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 had variable interest rate loans secured by its Damascus Centre and Wayne
PSC properties and currently has variable interest rate loans secured by its
Regency and 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 $16,200,000 ($14,587,000 at October 31, 2022) for the
Regency swap and a notional amount of approximately $12,350,000 ($11,751,000 at
October 31, 2022) for the Station Place swap. On January 10, 2022, the property
owned by Damascus Centre was sold and a portion of the proceeds from the sale
was used to pay off the $18.2 million then outstanding balance of the underlying
loan and the corresponding swap breakage fees of approximately $213,000 related
to the early termination of the interest rate swap contracts on this loan which
was included as interest expense on the accompanying consolidated statement of
income for the year ended October 31, 2022. (See Note 2 to FREIT's consolidated
financial statements for further details on the sale of this property.) On June
17, 2022, Wayne PSC terminated its interest rate swap contract on its underlying
loan held with People's United Bank, which had a maturity date of October 2026,
for a settlement amount of approximately $1.4 million. People's United Bank held
the proceeds from this settlement in escrow until the underlying loan was paid
off in July 2022 and has been included as a realized gain on interest rate swap
termination on the accompanying consolidated statement of income for the year
ended October 31, 2022. (See Note 6 to FREIT's consolidated financial statements
for further details.)

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
generally 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 had a variable interest rate loan secured by its Rotunda Property. As part
of the refinancing of Grande Rotunda's construction loan with a new loan from
Aareal Capital Corporation, Grande Rotunda had purchased an interest rate cap
contract on LIBOR for the full amount that could have been 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 had purchased an interest rate cap on LIBOR, with an effective date of
March 5, 2020, for the full amount that could have been drawn on this

                                      36

Table of Contents

loan of $121.9 million, capping the one-month LIBOR rate at 3% for one year,
maturing on March 5, 2021. Effective February 6, 2021, Grande Rotunda exercised
the first extension option on this loan with a balance of approximately $118.5
million, extending the loan one year with a new maturity date of February 6,
2022. Additionally, Grande Rotunda purchased an interest rate cap contract on
LIBOR, with an effective date of March 5, 2021, for the loan amount of
approximately $118.5 million, capping the one-month LIBOR rate at 3% for one
year expiring on February 6, 2022. On December 30, 2021, the Rotunda Property
owned by Grande Rotunda was sold, a portion of the proceeds from the sale was
used to pay off the $116.5 million then outstanding balance of the underlying
loan and the corresponding interest rate cap on this loan matured with no
settlement due at maturity. (See Note 2 to FREIT's consolidated financial
statements for further details.)

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 statement 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..

FREIT has the following derivative-related risks with its swap 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,
2022, the contracts for Regency and Station Place were in FREIT's favor. If
FREIT had terminated these contracts at that date, it would have realized a gain
of approximately $611,000 for the Regency swap and $798,000 for the Station
Place swap all of which have been included in FREIT's consolidated balance sheet
as at October 31, 2022. The change in the fair value for the contract (gain or
loss) during such period has been included in comprehensive income (loss) and
for the years ended October 31, 2022 and 2021, FREIT recorded an unrealized gain
of approximately $3,717,000 and $2,616,000, respectively, in the consolidated
statement of comprehensive income.

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

                                      37

Table of Contents

FREIT’s total contractual obligations under its line of credit and mortgage
loans in place as of October 31, 2022 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      $   5,190     $    886       $  1,482     $ 1,666     $  1,156
Balloon Payments           134,027       42,149 (A)     55,415           -       36,463
Total Long-Term Debt *   $ 139,217     $ 43,035       $ 56,897     $ 1,666     $ 37,619

* Includes deferred interest in the amount of approximately $222,000. See Note

       5 to FREIT's consolidated financials for additional details.

       Includes the
  (A)  following:

(1) A loan on the Westwood Hills property, which is a residential property

located in Westwood, New Jersey, in the amount of approximately $25

million. Pursuant to the loan agreement, this loan was extended for an

additional six (6) months from an initial maturity date of October 1, 2022 to

a new maturity date of April 1, 2023. This loan was extended on the same

terms and conditions as stated in the loan agreement and has one remaining

six (6) month extension. (See Note 5 to FREIT’s consolidated financial

statements for additional details.)

(2) A loan on the Westwood Plaza shopping center, located in Westwood, New

Jersey, in the amount of approximately $17.1 million, which is maturing on

February 1, 2023. The Company is in the process of extending this loan with

the current lender, Valley National Bank, for one (1) year. Under the terms

and conditions of this loan modification, the loan will be payable based on

the existing monthly installments of $129,702 including a fixed interest rate

       based on the Wall Street Journal Prime at the time of the closing on this
       extension (currently approximately 7.00%). Additionally, FREIT will be

required to prepay the annualized principal and interest payments for one (1)

year, which will be held in an account at Valley National Bank and will be

used to make monthly payments on the loan. Management expects this loan to be

modified/extended, however, until such time as a definitive agreement

       providing for a modification/extension of this loan is entered into, there
       can be no assurance this loan will be modified/extended. (See Note 5 to
       FREIT's consolidated financial statements 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, 2022 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 $ 14,936 $ 3,867 $ 6,181 $ 2,941 $ 1,947
Interest on Variable Rate Debt * 1,636 1,636 (A) –

    -           -
Total Interest Obligations         $ 16,572     $ 5,503       $ 6,181     $ 2,941     $ 1,947




       Interest based on rates as of
    *  October 31, 2022

(A) Assumed the exercise of the second loan extension on the Westwood Hills loan,

pursuant to the loan agreement, which will extend the loan from April 1, 2023 to

October 1, 2023 on the same terms and conditions. (See Note 5 to FREIT’s

       consolidated financial statements for additional details.)


                                      38

  Table of Contents

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
distributions from equity/debt/capital gain 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,
                                                          2022                    2021                 2020
                                                                  (In Thousands, Except Per Share)
Funds From Operations ("FFO") (a)
Net income                                           $        69,244          $      1,047         $     17,320
Net gain on sale of Maryland properties                      (68,771 )                   -                    -
Net gain on Wayne PSC interest rate swap
termination                                                   (1,415 )                   -                    -
Gain on deconsolidation of subsidiary                              -                     -              (27,680 )
Depreciation of consolidated properties                        3,995                 9,300               10,341
Tenant improvement write-off due to COVID-19                       -                     -                7,277
Amortization of deferred leasing costs                           133                   544                  730
Distributions to non-controlling interests                      (735 )(b)           (1,350 )               (583 )(c)
Adjustment to loss in investment in
tenancy-in-common for depreciation                             1,419       

         1,408                  933

                                            FFO      $         3,870          $     10,949         $      8,338

                              Per Share - Basic      $          0.55          $       1.56         $       1.19
                            Per Share - Diluted      $          0.54          $       1.56         $       1.19

(a) As prescribed by NAREIT.
(b) FFO excludes the distribution of proceeds to non-controlling interests in the amount of approximately $19.4
million related to the sale of the Damascus and Rotunda properties. See Note 2 to FREIT's consolidated financial
statements for further details.
(c) FFO excludes the distribution of proceeds to non-controlling interests in the amount of approximately $3.3
million related to the refinancing of the loan for the Westwood Hills property. See Note 5 to FREIT's consolidated
financial statements for further details.

Adjusted Funds From Operations ("AFFO")
FFO                                                  $         3,870          $     10,949         $      8,338
Deferred rents (Straight lining)                                 (18 )                 230                  397
Capital Improvements - Apartments                             (1,034 )     

          (625 )               (347 )
                                           AFFO      $         2,818          $     10,554         $      8,388

                  Per Share - Basic and Diluted      $          0.40          $       1.50         $       1.20

           Weighted Average Shares Outstanding:
                                          Basic                7,055                 7,019                6,992
                                        Diluted                7,132                 7,022                6,994


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.

                                      39

  Table of Contents

DISTRIBUTIONS TO STOCKHOLDERS

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 of the Internal
Revenue Code, including a requirement that FREIT must distribute to its
stockholders 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
stockholders. FREIT's taxable income is untaxed at the FREIT level to the extent
distributed to stockholders. FREIT's dividends of ordinary taxable income will
be taxed as ordinary income to its stockholders and FREIT's capital gains
dividends will be taxed as capital gains to its stockholders. FREIT's Board
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,
                    2022              2021           2020
First Quarter    $      0.10       $      0.05       $   -
Second Quarter   $      0.10       $      0.05       $   -
Third Quarter    $         -       $      0.05       $   -
Fourth Quarter   $      9.00       $      0.10       $   -
Total For Year   $      9.20       $      0.25       $   -




                                              (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
   2022      $ 9.20     $    65,163     $                - *   $           45,307 *   $ 45,307 *             143.8%
   2021      $ 0.25     $     1,755     $            1,900     $                -     $  1,900                92.4%
   2020      $    -     $         -     $                -     $                -     $      -                 0.0%
*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 generally 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.

© Edgar Online, source Glimpses