**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

|  x |  **QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |   |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------|--------|

**For      the Quarterly Period Ended July 31, 2007**

| o      | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934** |   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   | For                the transition period from __________________ to                ____________________                                   |   |

| FIRST                REAL ESTATE INVESTMENT TRUST OF NEW JERSEY               |
|-------------------------------------------------------------------------------|
| (Exact                name of registrant as specified in its charter)         |
| New                Jersey                                                     |   | 22-1697095 |
| (State                or other jurisdiction of incorporation or organization) |   | (I.R.S.                Employer Identification No.) |
|                                                                          |   |   |
| 505                Main Street, Hackensack, New Jersey                        |   | 07601 |
| (Address                of principal executive offices)                       |   | (Zip                Code) |

----

----

| Large                Accelerated Filer o  | Accelerated                Filer x  | Non-Accelerated                Filer  o |
|------------------------------------------------|------------------------------------------|----------------------------------------------|
|                                           |                                     |                                         |

----

*Index*

**FIRST      REAL ESTATE INVESTMENT TRUST OF NEW JERSEY**

**INDEX**

| **Part                I:  Financial                Information**                                                                                                                                                                 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                       | Page   |
|                                                                                                                                                                                                                                       |   |
| Item                1:  Unaudited Condensed Consolidated Financial                Statements                                                                                                                                     |   |
|                                                                                                                                                                                                                                       |   |
| a.)   Consolidated                Balance                Sheets as at July 31, 2007 and October 31, 2006;                                                                                                                   | 3      |
|                                                                                                                                                                                                                                       |   |
| b.)   Consolidated                Statements of Income, Comprehensive Income and Undistributed Earnings                for                the Nine and Three Months Ended  July 31, 2007 and                2006; | 4      |
|                                                                                                                                                                                                                                       |   |
| c.)   Consolidated                Statements of Cash Flows for the Nine Months Ended July 31, 2007                and                2006;                                                                                  | 5      |
|                                                                                                                                                                                                                                       |   |
| d.)   Notes                to Condensed                Consolidated Financial Statements.                                                                                                                                   | 6      |
|                                                                                                                                                                                                                                       |   |
| Item                2:  Management’s Discussion and Analysis of                Financial Condition and Results of Operations                                                                                               |   |
|                                                                                                                                                                                                                                       | 9      |
| Item                3:  Quantitative and Qualitative Disclosures                About Market Risk                                                                                                                                |   |
|                                                                                                                                                                                                                                       | 19     |
| Item                4:  Controls and Procedures                                                                                                                                                                                  |   |
|                                                                                                                                                                                                                                       | 19     |
|                                                                                                                                                                                                                                       |   |
|                                                                                                                                                                                                                                       |   |
| **Part                II: Other Information**                                                                                                                                                                                              |   |
|                                                                                                                                                                                                                                       |   |
| Item                6:  Exhibits                                                                                                                                                                                                 | 19     |
|                                                                                                                                                                                                                                       |   |
| Signatures                                                                                                                                                                                                                                 | 20     |
|                                                                                                                                                                                                                                       |   |
|                                                                                                                                                                                                                                       |   |

----

*Index*

**Part      I:  Financial Information**

**Item      1:  Unaudited Condensed Consolidated Financial      Statements**

| **FIRST                  REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND                  SUBSIDIARIES**     |
|---------------------------------------------------------------------------------------------------------------------------------|
| CONSOLIDATED                  BALANCE SHEETS                                                      |
| (Unaudited)                                                                                  |
|                                                                                                                            |   |   |   |   |   |   |   |
|                                                                                                                            |   |   |   |   |   |   |   |
|                                                                                                                            |   |   | July                  31, |   |   | October                  31, |   |
|                                                                                                                            |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                            |   |   | (In                  Thousands of Dollars) |   |
| ASSETS                                                                                                                     |   |   |   |   |   |   |
| Real                  estate, at cost, net of accumulated depreciation                                                          |   | $ | 203,228 |   |   | $ | 204,313 |   |
| Construction                  in progress                                                                                       |   |   | 3,719 |   |   |   | 2,995 |   |
| Cash                  and cash equivalents                                                                                      |   |   | 13,697 |   |   |   | 9,616 |   |
| Tenants'                  security accounts                                                                                     |   |   | 2,311 |   |   |   | 2,161 |   |
| Sundry                  receivables                                                                                        |   |   | 3,718 |   |   |   | 3,320 |   |
| Secured                  loans receivable                                                                                       |   |   | 3,325 |   |   |   | 3,109 |   |
| Deposits,                  prepaid expenses and other assets                                                                    |   |   | 6,966 |   |   |   | 4,201 |   |
| Acquired                  over market leases and in-place lease costs                                                           |   |   | 1,176 |   |   |   | 1,395 |   |
| Deferred                  charges, net                                                                                          |   |   | 3,542 |   |   |   | 3,589 |   |
| Interest                  rate swap contract                                                                                    |   |   | 39 |   |   |   | 87 |   |
|                                                                                                                            | Totals |   | $ | 241,721 |   |   | $ | 234,786 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |   |
| LIABILITIES                  AND SHAREHOLDERS' EQUITY                                                                           |   |   |   |   |   |   |   |   |
| Liabilities:                                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                                                            | Mortgages                  payable |   | $ | 189,957 |   |   | $ | 180,679 |   |
|                                                                                                                            | Accounts                  payable and accrued expenses |   |   | 4,477 |   |   |   | 6,097 |   |
|                                                                                                                            | Dividends                  payable |   |   | 2,027 |   |   |   | 3,375 |   |
|                                                                                                                            | Tenants'                  security deposits |   |   | 3,052 |   |   |   | 2,823 |   |
|                                                                                                                            | Acquired                  below market value leases and deferred revenue |   |   | 3,216 |   |   |   | 3,945 |   |
|                                                                                                                            | Total                  liabilities |   |   | 202,729 |   |   |   | 196,919 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |   |
| Minority                  interest                                                                                         |   |   | 12,890 |   |   |   | 12,895 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |   |
| Commitments                  and contingencies                                                                                  |   |   |   |   |   |   |   |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |   |
| Shareholders'                  equity:                                                                                          |   |   |   |   |   |   |   |   |
|                                                                                                                            | Shares                  of beneficial interest without par value: |   |   |   |   |   |   |   |   |
|                                                                                                                            | 8,000,000                  shares authorized; |   |   |   |   |   |   |   |   |
|                                                                                                                            |      6,755,652                  and 6,750,652 shares issued and outstanding |   |   | 23,187 |   |   |   | 23,150 |   |
|                                                                                                                            | Undistributed                  earnings |   |   | 2,876 |   |   |   | 1,735 |   |
|                                                                                                                            | Accumulated                  other comprehensive income |   |   | 39 |   |   |   | 87 |   |
|                                                                                                                            | Total                  shareholders' equity        |   |   | 26,102 |   |   |   | 24,972 |   |
|                                                                                                                            | Totals |   | $ | 241,721 |   |   | $ | 234,786 |   |
|                                                                                                                            |   |   |   |   |   |   |   |   |   |
|                  See                  Notes to Condensed Consolidated Financial Statements.                           |   |   |   |   |   |   |   |   |

----

*Index*

| **FIRST                  REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND                  SUBSIDIARIES**        |
|---------------------------------------------------------------------------------------------------------------------------------------------------|
| CONSOLIDATED                  STATEMENTS OF INCOME, COMPREHENSIVE INCOME                                       |
| AND                  UNDISTRIBUTED EARNINGS                                           |
| NINE                  AND THREE MONTHS ENDED JULY 31, 2007 AND 2006                             |
| (Unaudited)                                                                           |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   | Nine                  Months Ended    |   |   | Three                  Months Ended    |   |
|                                                                                                                                              |   | July                  31,    |   |   | July                  31,    |   |
|                                                                                                                                              |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                                              |   | (In                  Thousands of Dollars, Except Per Share Amounts)    |   |
| Revenue:                                                                                                                                          |   |   |   |   | Restated |   |   |   |   |   | Restated |   |
| Rental                  income                                                                                                                    |   | $ | 26,480 |   |   | $ | 24,194 |   |   | $ | 8,980 |   |   | $ | 8,155 |   |
| Reimbursements                                                                                                                                    |   |   | 3,601 |   |   |   | 3,767 |   |   |   | 1,227 |   |   |   | 1,345 |   |
| Sundry                  income                                                                                                                    |   |   | 415 |   |   |   | 178 |   |   |   | 234 |   |   |   | 76 |   |
| Totals                                                                                                                                            |   |   | 30,496 |   |   |   | 28,139 |   |   |   | 10,441 |   |   |   | 9,576 |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses                                                                                                               |   |   | 8,224 |   |   |   | 6,944 |   |   |   | 2,713 |   |   |   | 2,058 |   |
| Management                  fees                                                                                                                  |   |   | 1,321 |   |   |   | 1,258 |   |   |   | 451 |   |   |   | 440 |   |
| Real                  estate taxes                                                                                                                |   |   | 4,277 |   |   |   | 4,053 |   |   |   | 1,424 |   |   |   | 1,351 |   |
| Depreciation                                                                                                                                      |   |   | 3,972 |   |   |   | 3,456 |   |   |   | 1,323 |   |   |   | 1,195 |   |
| Totals                                                                                                                                            |   |   | 17,794 |   |   |   | 15,711 |   |   |   | 5,911 |   |   |   | 5,044 |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  income                                                                                                                 |   |   | 12,702 |   |   |   | 12,428 |   |   |   | 4,530 |   |   |   | 4,532 |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment                  income                                                                                                                |   |   | 382 |   |   |   | 150 |   |   |   | 157 |   |   |   | 37 |   |
| Interest                  expense including amortization                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   of                  deferred financing costs                                                                                          |   |   | (9,099 | ) |   |   | (8,291 | ) |   |   | (3,010 | ) |   |   | (2,784 | ) |
| Minority                  interest                                                                                                                |   |   | (386 | ) |   |   | (366 | ) |   |   | (129 | ) |   |   | (209 | ) |
| Distribution                  to certain minority interests                                                                                       |   |   | (150 | ) |   |   | (90 | ) |   |   | - |   |   |   | - |   |
| Income                  from continuing operations                                                                                                |   |   | 3,449 |   |   |   | 3,831 |   |   |   | 1,548 |   |   |   | 1,576 |   |
| Discontinued                  operations:                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                  from discontinued operations                                                                                            |   |   | 91 |   |   |   | 121 |   |   |   | 15 |   |   |   | 53 |   |
|                      Gain on sale                                                                                                  |   |   | 3,680 |   |   |   | - |   |   |   | 3,680 |   |   |   | - |   |
| Income                  from discontinued operations                                                                                              |   |   | 3,771 |   |   |   | 121 |   |   |   | 3,695 |   |   |   | 53 |   |
| Net                  income                                                                                                                       |   | $ | 7,220 |   |   | $ | 3,952 |   |   | $ | 5,243 |   |   | $ | 1,629 |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                  earnings per share:                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                  operations                                                                                                            |   | $ | 0.51 |   |   | $ | 0.59 |   |   | $ | 0.23 |   |   | $ | 0.24 |   |
| Discontinued                  operations                                                                                                          |   | $ | 0.56 |   |   | $ | 0.02 |   |   | $ | 0.55 |   |   | $ | 0.01 |   |
| Net                  income                                                                                                                       |   | $ | 1.07 |   |   | $ | 0.61 |   |   | $ | 0.78 |   |   | $ | 0.25 |   |
| Diluted                  earnings per share:                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                  operations                                                                                                            |   | $ | 0.50 |   |   | $ | 0.56 |   |   | $ | 0.22 |   |   | $ | 0.23 |   |
| Discontinued                  operations                                                                                                          |   | $ | 0.54 |   |   | $ | 0.02 |   |   | $ | 0.54 |   |   | $ | 0.01 |   |
| Net                  income                                                                                                                       |   | $ | 1.04 |   |   | $ | 0.58 |   |   | $ | 0.76 |   |   | $ | 0.24 |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                  average shares outstanding:                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                             |   |   | 6,752 |   |   |   | 6,530 |   |   |   | 6,756 |   |   |   | 6,548 |   |
| Diluted                                                                                                                                           |   |   | 6,919 |   |   |   | 6,787 |   |   |   | 6,925 |   |   |   | 6,888 |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| COMPREHENSIVE                  INCOME                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  income                                                                                                                       |   | $ | 7,220 |   |   | $ | 3,952 |   |   | $ | 5,243 |   |   | $ | 1,629 |   |
| Other                  comprehensive income (loss):                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                  gain (loss) on interest                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    rate                  swap contract                                                                                             |   |   | (48 | ) |   |   | 26 |   |   |   | (19 | ) |   |   | (2 | ) |
| Comprehensive                  income                                                                                                             |   | $ | 7,172 |   |   | $ | 3,978 |   |   | $ | 5,224 |   |   | $ | 1,627 |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| UNDISTRIBUTED                  EARNINGS                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                  beginning of period                                                                                                     |   | $ | 1,735 |   |   | $ | 4,890 |   |   | $ | (340 | ) |   | $ | 3,914 |   |
| Net                  income                                                                                                                       |   |   | 7,220 |   |   |   | 3,952 |   |   |   | 5,243 |   |   |   | 1,629 |   |
| Less                  dividends declared                                                                                                          |   |   | (6,079 | ) |   |   | (4,938 | ) |   |   | (2,027 | ) |   |   | (1,639 | ) |
| Balance,                  end of period                                                                                                           |   | $ | 2,876 |   |   | $ | 3,904 |   |   | $ | 2,876 |   |   | $ | 3,904 |   |
| Dividends                  declared per share                                                                                                     |   | $ | 0.90 |   |   | $ | 0.75 |   |   | $ | 0.30 |   |   | $ | 0.25 |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                  Notes to Condensed Consolidated Financial Statements.                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

| **FIRST                REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND                SUBSIDIARIES**     |
|-----------------------------------------------------------------------------------------------------------------------------|
| CONSOLIDATED                STATEMENTS OF CASH FLOWS                                          |
| NINE                MONTHS ENDED JULY 31, 2007 AND 2006                                       |
| (Unaudited)                                                                                   |
|                                                                                                                        |   |   |   |   |   |   |
|                                                                                                                        |   | Nine                Months Ended    |   |
|                                                                                                                        |   | July                31,    |   |
|                                                                                                                        |   | 2007 |   |   | 2006 |   |
|                                                                                                                        |   | (In                Thousands of Dollars) |   |
|                                                                                                                        |   |   |   |   | Restated |   |
| Operating                activities:                                                                                        |   |   |   |   |   |   |
| Net                income                                                                                                   |   | $ | 7,220 |   |   | $ | 3,952 |   |
| Adjustments                to reconcile net income to net cash provided by                                                  |   |   |   |   |   |   |   |   |
| operating                activities (including discontinued operations):                                                    |   |   |   |   |   |   |   |   |
|   Depreciation                                                                                                    |   |   | 3,980 |   |   |   | 3,466 |   |
|   Amortization                                                                                                    |   |   | 570 |   |   |   | 359 |   |
|   Net                amortization of acquired leases                                                              |   |   | (226 | ) |   |   | (271 | ) |
|   Deferred                revenue                                                                                 |   |   | (389 | ) |   |   | (629 | ) |
|   Minority                interest                                                                                |   |   | 536 |   |   |   | 456 |   |
| Gain                on sale of discontinued operations                                                                      |   |   | (3,680 | ) |   |   | - |   |
|  Changes                in operating assets and liabilities:                                                           |   |   |   |   |   |   |   |   |
|    Tenants'                security accounts                                                                 |   |   | (150 | ) |   |   | (136 | ) |
|    Sundry                receivables, prepaid expenses and other assets                                      |   |   | (57 | ) |   |   | (352 | ) |
|    Accounts                payable, accrued expenses and other liabilities                                   |   |   | 567 |   |   |   | (690 | ) |
|    Tenants'                security deposits                                                                 |   |   | 229 |   |   |   | 234 |   |
| Net                cash provided by operating activities                                                                    |   |   | 8,600 |   |   |   | 6,389 |   |
| Investing                activities:                                                                                        |   |   |   |   |   |   |   |   |
| Capital                improvements - existing properties                                                                   |   |   | (1,752 | ) |   |   | (1,301 | ) |
| Proceeds                from sale of discontinued operations                                                                |   |   | 3,796 |   |   |   | - |   |
| Net                sale proceeds held in escrow                                                                             |   |   | (3,796 | ) |   |   | - |   |
| Construction                and pre development costs                                                                       |   |   | (4,114 | ) |   |   | (11,751 | ) |
|                                                                                                                        |   |   |   |   |   |   |   |   |
| Net                cash used in investing activities                                                                        |   |   | (5,866 | ) |   |   | (13,052 | ) |
| Financing                activities:                                                                                        |   |   |   |   |   |   |   |   |
| Repayment                of mortgages                                                                                       |   |   | (19,053 | ) |   |   | (1,414 | ) |
| Proceeds                from mortgages                                                                                      |   |   | 28,331 |   |   |   | 14,592 |   |
| Proceeds                from exercise of stock options                                                                      |   |   | 37 |   |   |   | 532 |   |
| Dividends                paid                                                                                               |   |   | (7,427 | ) |   |   | (6,216 | ) |
| Distribution                to minority interest                                                                            |   |   | (541 | ) |   |   | (420 | ) |
| Net                cash provided by financing activities                                                                    |   |   | 1,347 |   |   |   | 7,074 |   |
| Net                increase in cash and cash equivalents                                                                    |   |   | 4,081 |   |   |   | 411 |   |
| Cash                and cash equivalents, beginning of period                                                               |   |   | 9,616 |   |   |   | 5,672 |   |
| Cash                and cash equivalents, end of period                                                                     |   | $ | 13,697 |   |   | $ | 6,083 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |
| Supplemental                disclosure of cash flow data:                                                                   |   |   |   |   |   |   |   |   |
| Interest                paid, including capitalized construction period interest                                            |   |   |   |   |   |   |   |   |
|      of                $402 in fiscal 2006.                                                        |   | $ | 8,900 |   |   | $ | 8,501 |   |
| Income                taxes paid                                                                                            |   | $ | 18 |   |   | $ | 18 |   |
| Supplemental                schedule of non cash financing activities:                                                      |   |   |   |   |   |   |   |   |
| Accrued                capital expenditures, construction costs and pre-development                costs                    |   | $ | 235 |   |   | $ | - |   |
| Dividends                declared but not paid                                                                              |   | $ | 2,027 |   |   | $ | 1,638 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |
| See                Notes to Condensed Consolidated Financial Statements.                                                    |   |   |   |   |   |   |   |   |

----

*Index*

**FIRST      REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND      SUBSIDIARIES**

A

|   |
|--------|
| FREIT                has presented "basic" and "diluted" earnings per share in the accompanying                condensed consolidated statements of income in accordance with the                provisions of Statement of Financial Accounting Standards (“SFAS”) No.                128, “Earnings per Share” ("SFAS 128"). Basic earnings per share is                calculated by dividing net income by the weighted average number                of shares                outstanding during each period. The calculation of diluted earnings                per                share is similar to that of basic earnings per share, except that                the                denominator is increased to include the number of additional shares                that                would have been outstanding if all potentially dilutive shares, such                as                those issuable upon the exercise of stock options and warrants, were                issued during the period. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Index*

|                                                                 |   | Nine                Months Ended          |      |   | Three                Months Ended         |   |
|----------------------------------------------------------------------|--------|-------------------------------------------|-----------|--------|-------------------------------------------|--------|
|                                                                 |   | July                31,    |      |   | July                31,    |   |
|                                                                 |   | 2007                                      |      |   | 2006                                      |   |   | 2007 |   |   | 2006 |   |
| Basic                weighted average shares outstanding             |   |                                      | 6,752,484 |   |                                      |   | 6,529,527 |   |   |   | 6,755,652 |   |   |   | 6,547,902 |   |
|                                                                 |   |                                      |      |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Shares                arising from assumed exercise of stock options |   |                                      | 166,675   |   |                                      |   | 257,145 |   |   |   | 169,513 |   |   |   | 340,734 |   |
| Dilutive                weighted average shares outstanding          |   |                                      | 6,919,159 |   |                                      |   | 6,786,672 |   |   |   | 6,925,165 |   |   |   | 6,888,636 |   |
|                                                                 |   |                                      |      |   |                                      |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

|                                                                |   | Nine                  Months Ended                                                   |   |   | Three                  Months Ended         |   |
|---------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|--------|--------|---------------------------------------------|--------|
|                                                                |   | July                  31,                                             |   |   | July                  31,    |   |
|                                                                |   | 2007                                                                                 |   |   |  2006*                                 |   |   | 2007 |   |   |   | 2006* |   |
|                                                                |   | (In                  Thousands of Dollars)        |   |
| Real                  estate rental revenue:                        |   |                                                                                 |   |   |                                        |   |   |   |   |   |   |   |   |   |
| Commercial                                                          |   | $                                                                                    | 16,198 |   |                                        | $      | 15,941 |   |   | $ | 5,464 |   |   | $ | 5,440 |   |
| Residential                                                         |   |                                                                                 | 13,886 |   |                                        |   | 11,677 |   |   |   | 4,831 |   |   |   | 3,988 |   |
| Totals                                                              |   |                                                                                 | 30,084 |   |                                        |   | 27,618 |   |   |   | 10,295 |   |   |   | 9,428 |   |
| Real                  estate operating expenses:                    |   |                                                                                 |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                                          |   |                                                                                 | 6,425  |   |                                        |   | 6,116 |   |   |   | 2,123 |   |   |   | 2,020 |   |
| Residential                                                         |   |                                                                                 | 6,120  |   |                                        |   | 5,360 |   |   |   | 1,992 |   |   |   | 1,576 |   |
| Totals                                                              |   |                                                                                 | 12,545 |   |                                        |   | 11,476 |   |   |   | 4,115 |   |   |   | 3,596 |   |
| Net                  operating income:                              |   |                                                                                 |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                                          |   |                                                                                 | 9,773  |   |                                        |   | 9,825 |   |   |   | 3,341 |   |   |   | 3,420 |   |
| Residential                                                         |   |                                                                                 | 7,766  |   |                                        |   | 6,317 |   |   |   | 2,839 |   |   |   | 2,412 |   |
| Totals                                                              |   | $                                                                                    | 17,539 |   |                                        | $      | 16,142 |   |   | $ | 6,180 |   |   | $ | 5,832 |   |
| Recurring                  capital improvements-residential         |   | $                                                                                    | 314    |   |                                        | $      | 234 |   |   | $ | 77 |   |   | $ | 90 |   |
|                                                                |   |                                                                                 |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Reconciliation                  to consolidated net income:         |   |                                                                                 |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Segment                  NOI                                        |   | $                                                                                    | 17,539 |   |                                        | $      | 16,142 |   |   | $ | 6,180 |   |   | $ | 5,832 |   |
| Deferred                  rents - straight lining                   |   |                                                                                 | 186    |   |                                        |   | 250 |   |   |   | 72 |   |   |   | 79 |   |
| Amortization                  of acquired leases                    |   |                                                                                 | 226    |   |                                        |   | 271 |   |   |   | 75 |   |   |   | 69 |   |
| Net                  investment income                              |   |                                                                                 | 382    |   |                                        |   | 150 |   |   |   | 157 |   |   |   | 37 |   |
| Minority                  interest in earnings of subsidiaries      |   |                                                                                 | (386   | )      |                                        |   | (366 | ) |   |   | (129 | ) |   |   | (209 | ) |
| Distribution                  to certain minority interests         |   |                                                                                 | (150   | )      |                                        |   | (90 | ) |   |   | - |   |   |   | - |   |
| General                  and administrative expenses                |   |                                                                                 | (1,277 | )      |                                        |   | (779 | ) |   |   | (474 | ) |   |   | (253 | ) |
| Depreciation                                                        |   |                                                                                 | (3,972 | )      |                                        |   | (3,456 | ) |   |   | (1,323 | ) |   |   | (1,195 | ) |
| Financing                  costs                                    |   |                                                                                 | (9,099 | )      |                                        |   | (8,291 | ) |   |   | (3,010 | ) |   |   | (2,784 | ) |
| Income                  from continuing operations                  |   |                                                                                 | 3,449  |   |                                        |   | 3,831 |   |   |   | 1,548 |   |   |   | 1,576 |   |
| Income                  from discontinued operations                |   |                                                                                 | 3,771  |   |                                        |   | 121 |   |   |   | 3,695 |   |   |   | 53 |   |
| Net                  income                                         |   | $                                                                                    | 7,220  |   |                                        | $      | 3,952 |   |   | $ | 5,243 |   |   | $ | 1,629 |   |
|                                                                |   |                                                                                 |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| *                  Restated (See Notes 1 & 4 for more details.) |   |                                                                                 |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

**Item      2: Management’s Discussion and Analysis of Financial Condition      and Results of Operations**

| Cautionary                Statement Identifying Important Factors That Could Cause FREIT’s Actual                Results to DifferFrom                  Those Projected in Forward Looking Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Readers                of this discussion are advised that the discussion should be read                in                conjunction with the unaudited condensed consolidated financial statements                of FREIT (including related notes thereto) appearing elsewhere in                this                Form 10-Q, and the consolidated financial statements included in                FREIT’s                most recently filed 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 regarding future results of                operations, economic performance, financial condition and achievements                of                FREIT, and do not relate strictly to historical or current facts.                FREIT                has tried, wherever possible, to identify these forward-looking statements                by using words such as “believe,”  “expect,” “anticipate,”                “intend,” “plan,” “estimate,” or words of similar                meaning. |
| 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, which will, among other things, affect demand for rental                space, the availability of prospective tenants, lease rents and the                availability of financing; adverse changes in FREIT’s real estate markets,                including, among other things, competition with other real estate                owners,                risks of real estate development and acquisitions; governmental actions                and initiatives; and environmental/safety                requirements.                                                                                                                                                                                                                                                                                                                                          |

|   | · | the                national and regional economic                climate; |
|--------|--------|---------------------------------------------------------------------------|

|   | · | occupancy                rates at the properties; |
|--------|--------|---------------------------------------------------|

|   | · | tenant                turn-over rates; |
|--------|--------|----------------------------------------|

|   | · | rental                rates; |
|--------|--------|------------------------------|

|   | · | operating                expenses; |
|--------|--------|------------------------------------|

|   | · | tenant                improvement and leasing costs; |
|--------|--------|------------------------------------------------------|

|   | · | cost                of and availability of capital; |
|--------|--------|-----------------------------------------------------|

|   | · | new                acquisitions and development projects;                and |
|--------|--------|------------------------------------------------------------------------------|

|   | · | governmental                regulations. |
|--------|--------|------------------------------------------|

----

*Index*

*All      references to per share amounts are on a diluted basis unless otherwise      indicated.*

----

*Index*

**Results      of Operations:**

|                                                                                                                      |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |
|---------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------|--------------|---------------------------------------------------------------|-------------------------------------------------------|--------|-------------|--------|--------|--------------|------------|--------------|--------|-------------|--------|--------|--------|-------------|
| **NET                  INCOME COMPONENTS**                                                                                |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |
|                                                                                                                      |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |
|                                                                                                                      |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |
|                                                                                                                      |   | Nine                  Months Ended                                                                       |         |                                                          | Three                  Months Ended    |   |
|                                                                                                                      |   | July                  31,                                                                 |    | July                  31,       |                                                  |
|                                                                                                                      |   | 2007                                                                                                                    |         |                                                          |                                                  | 2006*  |        |   | Change |    | 2007       |         |   |  2006* |   |   | Change |        |
|                                                                                                                      |   | *(thousands                  of dollars)*              |         |
| **Commercial                  Properties**                                                                                |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |   |
| Same                  Properties                  (1)                                                                     |   | $                                                                                                                       | 9,896        |                                                          |                                                  | $      | 9,791       |   |   | $            | 105        |         |   | $           | 3,392  |   |   | $           | 3,393 |   |   | $ | (1 | ) |
| Damascus                  Center - undergoing renovation                                                                  |   |                                                                                                                    | 289          |                                                          |                                                  |   | 555         |   |   |         | (266       | )       |   | 96          |   |   |   | 175         |   |   |   | (79 | ) |
| Total                  Commercial Properties                                                                              |   |                                                                                                                    | 10,185       |                                                          |                                                  |   | 10,346      |   |   |         | (161       | )       |   | 3,488       |   |   |   | 3,568       |   |   |   | (80 | ) |
|                                                                                                                      |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |   |   |   |   |   |
| **Residential                  Properties**                                                                               |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |   |   |   |   |   |
| Same                  Properties                  (1)                                                                     |   |                                                                                                                    | 6,796        |                                                          |                                                  |   | 6,301       |   |   |         | 495        |         |   |        | 2,469  |   |   |        | 2,389 |   |   |   | 80 |   |
| Boulders                  at Rockaway                                                                                     |   |                                                                                                                    | 970          |                                                          |                                                  |   | 16          |   |   |         | 954        |    |   | 370         |   |   |   | 23          |   |   |   | 347 |   |
| Total                  Residential Properties                                                                             |   |                                                                                                                    | 7,766        |                                                          |                                                  |   | 6,317       |   |   |         | 1,449      |    |   | 2,839       |   |   |   | 2,412       |   |   |   | 427 |   |
|                                                                                                                      |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |   |   |   |   |   |
| Total                  income from real estate operations                                                                 |   |                                                                                                                    | 17,951       |                                                          |                                                  |   | 16,663      |   |   |         | 1,288      |         |   |        | 6,327  |   |   |        | 5,980 |   |   |   | 347 |   |
|                                                                                                                      |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |   |   |   |   |   |
| **Financing                  costs:**                                                                                     |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |   |   |   |   |   |
| Fixed                  rate mortgages                                                                                     |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |   |   |   |   |   |
| Same                  Properties                  (1)                                                                     |   |                                                                                                                    | (6,812       | )                                                             |                                                  |   | (7,023      | )      |   |         | 211        |         |   |        | (2,276 | )      |   |        | (2,333 | ) |   |   | 57 |   |
| Boulders                  at Rockaway                                                                                     |   |                                                                                                                    | (824         | )                                                             |                                                  |   | (7          | )      |   |         | (817       | )            |   |        | (284   | )      |   |        | (1 | ) |   |   | (283 | ) |
| Floating                  Rate - Rotunda                                                                                  |   |                                                                                                                    | (1,228       | )                                                             |                                                  |   | (1,098      | )      |   |         | (130       | )            |   |        | (411   | )      |   |        | (397 | ) |   |   | (14 | ) |
| Corporate                  interest - Line / Floating                                                                     |   |                                                                                                                    | (235         | )                                                             |                                                  |   | (163        | )      |   |         | (72        | )       |   | (39         | )      |   |   | (53         | ) |   |   | 14 |   |
| Total                  financing costs                                                                                    |   |                                                                                                                    | (9,099       | )                                                             |                                                  |   | (8,291      | )      |   |         | (808       | )       |   | (3,010      | )      |   |   | (2,784      | ) |   |   | (226 | ) |
|                                                                                                                      |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |   |   |   |   |   |
| Investment                  income                                                                                        |   |                                                                                                                    | 382          |                                                          |                                                  |   | 150         |   |   |         | 232        |         |   |        | 157    |   |   |        | 37 |   |   |   | 120 |   |
|                                                                                                                      |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |   |   |   |   |   |
| Corporate                  expenses                                                                                       |   |                                                                                                                    | (678         | )                                                             |                                                  |   | (578        | )      |   |         | (100       | )            |   |        | (216   | )      |   |        | (174 | ) |   |   | (42 | ) |
| Accounting                                                                                                                |   |                                                                                                                    | (599         | )                                                             |                                                  |   | (201        | )      |   |         | (398       | )            |   |        | (258   | )      |   |        | (79 | ) |   |   | (179 | ) |
| Minority                  interest in earnings of subsidiaries                                                            |   |                                                                                                                    | (386         | )                                                             |                                                  |   | (366        | )      |   |         | (20        | )            |   |        | (129   | )      |   |        | (209 | ) |   |   | 80 |   |
| Distribution                  to Westwood Hills minority interests                                                        |   |                                                                                                                    | (150         | )                                                             |                                                  |   | (90         | )      |   |         | (60        | )            |   |        | -      |   |   |        | - |   |   |   | - |   |
|                                                                                                                      |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |   |   |   |   |   |
| **Depreciation:**                                                                                                         |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |   |   |   |   |   |
| Same                  Properties                  (1)                                                                     |   |                                                                                                                    | (3,576       | )                                                             |                                                  |   | (3,436      | )      |   |         | (140       | )            |   |        | (1,196 | )      |   |        | (1,175 | ) |   |   | (21 | ) |
| Boulders                  at Rockaway                                                                                     |   |                                                                                                                    | (396         | )                                                             |                                                  |   | (20         | )      |   |         | (376       | )       |   | (127        | )      |   |   | (20         | ) |   |   | (107 | ) |
| Total                  depreciation                                                                                       |   |                                                                                                                    | (3,972       | )                                                             |                                                  |   | (3,456      | )      |   |         | (516       | )       |   | (1,323      | )      |   |   | (1,195      | ) |   |   | (128 | ) |
|                                                                                                                      |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |   |   |   |   |
| Income                  from continuing operations                                                                        |   |                                                                                                                    |  3,449  |                                                          |                                                  |   |  3,831 |   |   |         |  (382 | )       |   |  1,548 |   |   |   |  1,576 |   |   |   |  (28 | )  |
|                                                                                                                      |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |   |   |   |   |   |
| Income                  from discontinued operations                                                                      |   |                                                                                                                    | 3,771        |                                                          |                                                  |   | 121         |   |   |         | 3,650      |         |   |        | 3,695  |   |   |        | 53 |   |   |   | 3,642 |   |
|                                                                                                                      |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |    |   |        |   |   |   |        |   |   |   |   |   |
| **Net                  Income**                                                                                           |   | **$**                                                                                                                   | **7,220**    |                                                          |                                                  | **$**  | **3,952**   |   |   | **$**        | **3,268**  |    | **$**  | **5,243**   |   |   | **$**  | **1,629**   |   |   | **$** | **3,614** |   |
|                                                                                                                      |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |   |   |   |   |   |
|  (1)                  Properties operated since the beginning of fiscal 2006.               |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |   |
|    *                  Restated (See Notes 1 & 4 for more details.)       |   |                                                                                                                    |         |                                                          |                                                  |   |        |   |   |         |       |         |   |        |   |   |   |        |

----

*Index*

| **Nine                  Months Ended July 31:** |   |                                                                            |       |            |                                       |                           |                                              |                                                                            |                                 |   |                                     |                                        |   |                                                    |       |    |        |         |                               |    |   |         |       |    |   |   |      |   |        |         |
|-------------------------------------------------|--------|---------------------------------------------------------------------------------|------------|-----------------|--------------------------------------------|--------------------------------|---------------------------------------------------|---------------------------------------------------------------------------------|--------------------------------------|--------|------------------------------------------|---------------------------------------------|--------|---------------------------------------------------------|------------|---------|-------------|--------------|------------------------------------|---------|--------|--------------|------------|---------|--------|--------|-----------|--------|-------------|--------------|
|                                            |   | **Commercial**                                              |       | **Residential** |                                       | **Combined**    |                                              |
|                                            |   | Nine                  Months Ended                               |       |            |                                       |                           |                                              |                                                                            |                                 |   | Nine                  Months Ended  |                                        |   |                                                    |       |    |        |         | Nine                  Months Ended |    |
|                                            |   | July                  31,                         |       |            | Increase                  (Decrease)  |                           | July                  31,     |                                                                            | Increase                  (Decrease) |   |                                     | July                  31,    |   |
|                                            |   | 2007                                                                            |       |            |  2006                                 |                           |                                              |  $                                                                         |                                 |   |                                     | %                                           |   | 2007                                                    |       |    |  2006* |         |                               | $       |   |         |       | %       |   | 2007   |      |   |  2006* |         |
|                                            |   | (in                  thousands)         |       |            |                                       |                           |                                              | (in                  thousands)         |                                 |   |                                     |                                        |   | (in                  thousands)     |       |
| Rental                  income                  |   | $                                                                               | 12,454     |            |                                       | $                              | 12,141                                            |                                                                            |                                 | $      | 313                                      |                                        |   | * *                                                | *2.6*      | *%*     |        | $            | 13,614                             |    |   | $            | 11,532     |    |   | $      | 2,082     |   |        | * *     | *18.1* | *%* |   | $ | 26,068 |   |   | $ | 23,673 |   |
| Reimbursements                                  |   |                                                                            | 3,601      |            |                                       |                           | 3,767                                             |                                                                            |                                 |   | (166                                     | )                                           |   | * *                                                | *-4.4*     | *%*     |        |         |                               |    |   |         |       |    |   |   | -         |   |        |         |   |   |   |   | 3,601 |   |   |   | 3,767 |   |
| Other                                           |   |                                                                            | 143        |            |                                       |                           | 33                                                |                                                                            |                                 |   | 110                                      |                                        |   | * *                                                | *333.3*    | *%*     |        |         | 272                                |    |   |         | 145        |    |   |   | 127       |   |        | * *     | *87.6* | *%* |   |   | 415 |   |   |   | 178 |   |
| Total                  Revenue                  |   |                                                                            | 16,198     |            |                                       |                           | 15,941                                            |                                                                            |                                 |   | 257                                      |                                        |   | * *                                                | *1.6*      | *%*     |        |         | 13,886                             |    |   |         | 11,677     |    |   |   | 2,209     |   |        | * *     | *18.9* | *%* |   |   | 30,084 |   |   |   | 27,618 |   |
|                                            |   |                                                                            |       |            |                                       |                           |                                              |                                                                            |                                 |   |                                     |                                        |   |                                                    |       |    |        |         |                               |    |   |         |       |    |   |   |      |   |        |         |   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses             |   |                                                                            | 6,425      |            |                                       |                           | 6,116                                             |                                                                            |                                 |   | 309                                      |                                        |   | * *                                                | *5.1*      | *%*     |        |         | 6,120                              |    |   |         | 5,360      |    |   |   | 760       |   |        | * *     | *14.2* | *%* |   |   | 12,545 |   |   |   | 11,476 |   |
| **Net                  operating income**       |   | **$**                                                                           | **9,773**  |            |                                       | **$**                          | **9,825**                                         |                                                                            |                                 | **$**  | **(52**                                  | **)**                                       |   | *** ***                                            | ***-0.5*** | ***%*** |        | **$**        | **7,766**                          |    |   | **$**        | **6,317**  |    |   | **$**  | **1,449** |   |        | *** *** | ***22.9*** | ***%*** |   | ** ** | **17,539** |   |   | ** ** | **16,142** |   |
| Average                                         |   |                                                                            |       |            |                                       |                           |                                              |                                                                            |                                 |   |                                     |                                        |   |                                                    |       |    |        |         |                               |    |   |         |       |    |   |   |      |   |        |         |   |   |   |   |   |   |   |   |   |   |
| Occupancy                  %                    |   | *** ***                                                                    | ***90.1*** | ***%***         |                                       | *** ***                   | ***90.5***                                        | ***%***                                                                         |                                 |   |                                     |                                        |   | *** ***                                            | ***-0.4*** | ***%*** |        | *** *** | ***94.8***                         | ***%*** |   | *** *** | ***95.4*** | ***%*** |   |   |      |   |        | *** *** | ***-0.6*** | ***%*** |   |   |   |   |   |   |   |   |

|   |                                                                                   |                                  |   |   |   |   |   |   |
|--------|----------------------------------------------------------------------------------------|---------------------------------------|--------|--------|--------|--------|--------|--------|
|   | Reconciliation                  to consolidated net income:                            |                                  |   |   |   |   |   |
|   | Deferred                  rents - straight lining                                      |                                  |   | 186    |   |   |   | 250    |   |
|   | Amortization                  of acquired leases                                       |                                  |   | 226    |   |   |   | 271    |   |
|   | Net                  investment income                                                 |                                  |   | 382    |   |   |   | 150    |   |
|   | General                  and administrative expenses                                   |                                  |   | (1,277 | )      |   |   | (779   | ) |
|   | Depreciation                                                                      |                                  |   | (3,972 | )      |   |   | (3,456 | ) |
|   | Financing                  costs                                                       |                                  |   | (9,099 | )      |   |   | (8,291 | ) |
|   | Distributions                  to certain minority interests                           |                                  |   | (150   | )      |   |   | (90    | ) |
|   | Minority                  interest                                                     |                                  |   | (386   | )      |   |   | (366   | ) |
|   |       Income                  from continuing operations |                                  |   | 3,449  |   |   |   | 3,831  |   |
|   | Income                  from discontinued operations                                   |                                  |   | 3,771  |   |   |   | 121    |   |
|   |                                                                                   | ** Net                  income** |   | $      | 7,220  |   |   | $      | 3,952 |   |

| *                  Restated (See Notes 1 & 4 for more details.) |   |                                                                       |       |                                                                        |                                       |                           |                                        |    |                                                                      |                                       |                                     |                                        |   |         |       |                            |        |         |       |                                     |   |         |       |    |   |   |    |   |
|---------------------------------------------------------------------|--------|----------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------|--------------------------------------------|--------------------------------|---------------------------------------------|---------|---------------------------------------------------------------------------|--------------------------------------------|------------------------------------------|---------------------------------------------|--------|--------------|------------|---------------------------------|-------------|--------------|------------|------------------------------------------|--------|--------------|------------|---------|--------|--------|---------|--------|
|                                                                |   |                                                                       |       |                                                                        |                                       |                           |                                        |    |                                                                      |                                       |                                     |                                        |   |         |       |                            |        |         |       |                                     |   |         |       |    |   |   |    |   |   |   |
|                                                                |   |                                                                       |       |                                                                        |                                       |                           |                                        |    |                                                                      |                                       |                                     |                                        |   |         |       |                            |        |         |       |                                     |   |         |       |    |   |   |    |   |   |   |
| **Three                  Months Ended July 31:**                    |   |                                                                       |       |                                                                        |                                       |                           |                                        |    |                                                                      |                                       |                                     |                                        |   |         |       |                            |        |         |       |                                     |   |         |       |    |   |   |    |   |   |   |
|                                                                |   | **Commercial**           |       | **Residential**           |                                       | **Combined**    |                                        |
|                                                                |   | Three Months                  Ended                                   |       |                                                                        |                                       |                           |                                        |    |                                                                      |                                       | Three Months                  Ended |                                        |   |         |       |                            |        |         |       | Three Months                  Ended |   |
|                                                                |   | July                  31,                                   |       |                                                                        | Increase                  (Decrease)  |                           | July                  31,    |    |                                                                      | Increase                  (Decrease)  |                                     | July                  31,    |   |
|                                                                |   | 2007                                                                       |       |                                                                        |  2006                                 |                           |                                        | $  |                                                                      |                                       |                                     | %                                           |   | 2007         |       |                            |  2006* |         |       | $                                        |   |         |       | %       |   | 2007   |    |   |  2006* |   |
|                                                                |   | (in                  thousands)         |       |                                                                        |                                       |                           |                                        |    | (in                  thousands)        |                                       |                                     |                                        |   |         |       | (in                  thousands) |        |
| Rental                  income                                      |   | $                                                                          | 4,192      |                                                                        |                                       | $                              | 4,084                                       |    |                                                                      | $                                          | 108                                      |                                        |   | * *     | *2.6*      | *%*                             |        | $            | 4,642      |                                     |   | $            | 3,923      |    |   | $      | 719     |   |   | * * | *18.3* | *%* |   | $ | 8,834 |   |   | $ | 8,007 |   |
| Reimbursements                                                      |   |                                                                       | 1,227      |                                                                        |                                       |                           | 1,345                                       |    |                                                                      |                                       | (118                                     | )                                           |   | * *     | *-8.8*     | *%*                             |        |         |       |                                     |   |         |       |    |   |   | -       |   |   |   |   |   |   |   | 1,227 |   |   |   | 1,345 |   |
| Other                                                               |   |                                                                       | 45         |                                                                        |                                       |                           | 11                                          |    |                                                                      |                                       | 34                                       |                                        |   | * *     | *309.1*    | *%*                             |        |         | 189        |                                     |   |         | 65         |    |   |   | 124     |   |   | * * | *190.8* | *%* |   |   | 234 |   |   |   | 76 |   |
| Total                  Revenue                                      |   |                                                                       | 5,464      |                                                                        |                                       |                           | 5,440                                       |    |                                                                      |                                       | 24                                       |                                        |   | * *     | *0.4*      | *%*                             |        |         | 4,831      |                                     |   |         | 3,988      |    |   |   | 843     |   |   | * * | *21.1* | *%* |   |   | 10,295 |   |   |   | 9,428 |   |
|                                                                |   |                                                                       |       |                                                                        |                                       |                           |                                        |    |                                                                      |                                       |                                     |                                        |   |         |       |                            |        |         |       |                                     |   |         |       |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  expenses                                 |   |                                                                       | 2,123      |                                                                        |                                       |                           | 2,020                                       |    |                                                                      |                                       | 103                                      |                                        |   | * *     | *5.1*      | *%*                             |        |         | 1,992      |                                     |   |         | 1,576      |    |   |   | 416     |   |   | * * | *26.4* | *%* |   |   | 4,115 |   |   |   | 3,596 |   |
| **Net                  operating income**                           |   | **$**                                                                      | **3,341**  |                                                                        |                                       | **$**                          | **3,420**                                   |    |                                                                      | **$**                                      | **(79**                                  | **)**                                       |   | *** *** | ***-2.3*** | ***%***                         |        | **$**        | **2,839**  |                                     |   | **$**        | **2,412**  |    |   | **$**  | **427** |   |   | *** *** | ***17.7*** | ***%*** |   | ** ** | **6,180** |   |   | ** ** | **5,832** |   |
| Average                                                             |   |                                                                       |       |                                                                        |                                       |                           |                                        |    |                                                                      |                                       |                                     |                                        |   |         |       |                            |        |         |       |                                     |   |         |       |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Occupancy                  %                                        |   | *** ***                                                               | ***91.0*** | ***%***                                                                     |                                       | *** ***                   | ***90.2***                                  | ***%*** |                                                                      |                                       |                                     |                                        |   | *** *** | ***0.8***  | ***%***                         |        | *** *** | ***95.9*** | ***%***                                  |   | *** *** | ***96.4*** | ***%*** |   |   |    |   |   | *** *** | ***-0.5*** | ***%*** |   |   |   |   |   |   |   |   |
|                                                                |   |                                                                       |       |                                                                        |                                       |                           |                                        |    |                                                                      |                                       |                                     |                                        |   |         |       |                            |        |         |       |                                     |   |         |       |    |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |

|   | Reconciliation                  to consolidated net income:                            |                                  |   |   |   |   |   |
|--------|----------------------------------------------------------------------------------------|---------------------------------------|--------|--------|--------|--------|--------|
|   | Deferred                  rents - straight lining                                      |                                  |   | 72     |   |   |   | 79 |   |
|   | Amortization                  of acquired leases                                       |                                  |   | 75     |   |   |   | 69 |   |
|   | Net                  investment income                                                 |                                  |   | 157    |   |   |   | 37 |   |
|   | General                  and administrative expenses                                   |                                  |   | (474   | )      |   |   | (253 | ) |
|   | Depreciation                                                                      |                                  |   | (1,323 | )      |   |   | (1,195 | ) |
|   | Financing                  costs                                                       |                                  |   | (3,010 | )      |   |   | (2,784 | ) |
|   | Distributions                  to certain minority interests                           |                                  |   | -      |   |   |   | - |   |
|   | Minority                  interest                                                     |                                  |   | (129   | )      |   |   | (209 | ) |
|   |       Income                  from continuing operations |                                  |   | 1,548  |   |   |   | 1,576 |   |
|   | Income                  from discontinued operations                                   |                                  |   | 3,695  |   |   |   | 53 |   |
|   |                                                                                   | ** Net                  income** |   | $      | 5,243  |   |   | $ | 1,629 |   |

|     *                  Restated (See Notes 1 & 4 for more details.) |   |   |   |   |   |   |   |   |   |   |
|---------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                        |   |   |   |   |   |   |   |   |   |   |

----

*Index*

|     |   |   | Nine                  Months Ended July 31,  |   |
|----------|--------|--------|---------------------------------------------------|--------|
|     |   |   | 2007                                              |   |   | 2006 |   |
|     |   |   | Commercial                                        |   |   |   |   |   | Same |   |   | Commercial |   |   |   |   |   | Same |   |
| ($000)   |   |   | Properties                                        |   |   | Damascus |   |   | Properties |   |   | Properties |   |   | Damascus |   |   | Properties |   |
| Revenues |   |   | $                                                 | 16,198 |   |   | $ | 610 |   |   | $ | 15,588 |   |   | $ | 15,941 |   |   | $ | 891 |   |   | $ | 15,050 |   |
|     |   |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses |   |   |                                              | 6,425  |   |   |   | 316 |   |   |   | 6,109 |   |   |   | 6,116 |   |   |   | 331 |   |   |   | 5,785 |   |
|     |   |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOI      |   |   | $                                                 | 9,773  |   |   | $ | 294 |   |   | $ | 9,479 |   |   | $ | 9,825 |   |   | $ | 560 |   |   | $ | 9,265 |   |
|     |   |   |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|     |   |       | Nine                  Months Ended July 31, |   |
|----------|--------|------------|---------------------------------------------|--------|
|     |   |       | 2007                                        |   |   | 2006* |   |
|     |   |       | Residential                                 |   |   | The |   |   | Same |   |   | Residential |   |   | The |   |   | Same |   |
| ($000)   |   | Properties |                                        |   | Boulders |   |   | Properties |   |   | Properties |   |   | Boulders |   |   | Properties |   |
| Revenues |   |       | $                                           | 13,886 |   |   | $ | 1,703 |   |   | $ | 12,183 |   |   | $ | 11,677 |   |   | $ | 46 |   |   | $ | 11,631 |   |
|     |   |       |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses |   |       |                                        | 6,120  |   |   |   | 733 |   |   |   | 5,387 |   |   |   | 5,360 |   |   |   | 30 |   |   |   | 5,330 |   |
|     |   |       |                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOI      |   |       | $                                           | 7,766  |   |   | $ | 970 |   |   | $ | 6,796 |   |   | $ | 6,317 |   |   | $ | 16 |   |   | $ | 6,301 |   |

|                                                       |   |       |   | Three                  Months Ended July 31,         |     |
|------------------------------------------------------------|--------|------------|--------|------------------------------------------------------|----------|
|                                                       |   |       |   | 2007         |     |   | 2006* |   |
|                                                       |   |       |   | Residential                                          |     |   | The |   |   | Same |   |   | Residential |   |   | The |   |   | Same |   |
| ($000)                                                     |   | Properties |   |                                                 | Boulders |   |   | Properties |   |   | Properties |   |   | Boulders |   |   | Properties |   |
| Revenues                                                   |   |       | $      | 4,831                                                |     |   | $ | 635 |   |   | $ | 4,196 |   |   | $ | 3,988 |   |   | $ | 46 |   |   | $ | 3,942 |   |
|                                                       |   |       |   |                                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                                                   |   |       |   | 1,992                                                |     |   |   | 265 |   |   |   | 1,727 |   |   |   | 1,576 |   |   |   | 23 |   |   |   | 1,553 |   |
|                                                       |   |       |   |                                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOI                                                        |   |       | $      | 2,839                                                |     |   | $ | 370 |   |   | $ | 2,469 |   |   | $ | 2,412 |   |   | $ | 23 |   |   | $ | 2,389 |   |
| *                  Restated (See Note 4 for more details.) |   |       |   |                                                 |     |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

|                                                                                    |   | Nine                    Months Ended |   |   | Three                    Months Ended |   |
|-----------------------------------------------------------------------------------------|--------|--------------------------------------|--------|--------|---------------------------------------|--------|
|                                                                                    |   | July                    31,          |   |   | July                    31,           |   |
|                                                                                    |   | 2007                                 |   |   | 2006                                  |   |   | 2007 |   |   | 2006 |   |
|                                                                                    |   | ($                    in thousands)  |   |   | ($                    in thousands)   |   |
|  Fixed                    rate mortgages                                           |   | $                                    | 7,338  |   |                                  | $      | 6,899 |   |   | $ | 2,515 |   |   | $ | 2,291 |   |
|  Variable                    rate mortgages:                                       |   |                                 |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
|       Construction                    Loan (1) - Boulders |   |                                 | 161    |   |                                  |   | 402 |   |   |   | - |   |   |   | 247 |   |
|       Acquisition                    loan - Rotunda       |   |                                 | 1,184  |   |                                  |   | 1,055 |   |   |   | 396 |   |   |   | 383 |   |
|       Other                                               |   |                                 | 217    |   |                                  |   | 145 |   |   |   | 32 |   |   |   | 47 |   |
|                                                                                    |   |                                 | 8,900  |   |                                  |   | 8,501 |   |   |   | 2,943 |   |   |   | 2,968 |   |
|  Amortization                    of Mortgage Costs                                 |   |                                 | 199    |   |                                  |   | 192 |   |   |   | 67 |   |   |   | 63 |   |
|  Total                    Financing Costs                                          |   |                                 | 9,099  |   |                                  |   | 8,693 |   |   |   | 3,010 |   |   |   | 3,031 |   |
|       Less                    amount capitalized          |   |                                 | -      |   |                                  |   | (402 | ) |   |   | - |   |   |   | (247 | ) |
|  Financing                    costs expensed                                       |   | $                                    | 9,099  |   |                                  | $      | 8,291 |   |   | $ | 3,010 |   |   | $ | 2,784 |   |
|                                                                                    |   |                                 |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |
| (1)                    Mortgages not in place at beginning of fiscal 2006.              |   |                                 |   |   |                                  |   |   |   |   |

----

*Index*

~~.~~

----

*Index*

| **Fiscal                  Year**             | **2008** | **2010** | **2013** | **2014** | **2016** | **2017** | **2019** | **2022** |
|----------------------------------------------|----------|----------|----------|----------|----------|----------|----------|----------|
| *($                  in millions)*           |     |     |     |     |     |     |     |     |
| Mortgage                  "Balloon" Payments | $28.4    | $12.3    | $8.0     | $26.1    | $24.7    | $22.0    | $28.3    | $14.4    |

|                               |   | July                  31, |   | October                  31, |
|------------------------------------|--------|---------------------------|--------|------------------------------|
| *($                  in Millions)* |   | 2007                      |   | 2006                         |
| Fair                  Value        |   | $184.4                    |   | $184.4                       |
|                               |   |                      |   |                         |
| Carrying                  Value    |   | $190.0                    |   | $180.7                       |

----

*Index*

**FUNDS      FROM OPERATIONS (“FFO”):**

|                                                                                 |                                                      |   |                                                                                                |   |   |                                                  |   |   |   |   |   |        |
|--------------------------------------------------------------------------------------|-----------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------|--------|--------|--------|--------|--------|-------------|
| **Funds                  From Operations ("FFO")**                                   |                                                      |   |                                                                                                |   |   |                                                  |   |   |   |   |   |        |
|                                                                                 |                                                      |   | Nine                  Months Ended                                                   |   |   | Three                  Months Ended    |   |
|                                                                                 |                                                      |   | July                  31,                                                            |   |   | July                  31,              |   |
|                                                                                 |                                                      |   | 2007                                                                                                |   |   |  2006*                                           |   |   | 2007   |   |   |  2006* |   |
|                                                                                 |                                                      |   | ($                  in thousands)            |   |
|                                                                                 |                                                      |   |                                                                                                |   |   |                                                  |   |   |   |   |   |        |   |   |   |
| Net                  income                                                          |                                                      |   | $                                                                                                   | 7,220  |   |                                                  | $      | 3,952  |   |   | $      | 5,243       |   |   | $ | 1,629 |   |
| Depreciation                                                                         |                                                      |   |                                                                                                | 3,972  |   |                                                  |   | 3,456  |   |   |   | 1,323       |   |   |   | 1,195 |   |
| Amortization                  of deferred mortgage costs                             |                                                      |   | 199                                                                                                 |   |   |                                                  | 192    |   |   |   | 67     |        |   |   | 63 |   |
| Deferred                  rents (Straight lining)                                    |                                                      |   | (186                                                                                                | )      |   |                                                  | (250   | )      |   |   | (72    | )           |   |   | (79 | ) |
| Amortization                  of acquired leases                                     |                                                      |   | (226                                                                                                | )      |   |                                                  | (271   | )      |   |   | (75    | )           |   |   | (69 | ) |
| Capital                  Improvements - Apartments                                   |                                                      |   | (314                                                                                                | )      |   |                                                  | (234   | )      |   |   | (77    | )           |   |   | (90 | ) |
| Discontinued                  operations                                             |                                                      |   | (3,771                                                                                              | )      |   |                                                  | (121   | )      |   |   | (3,695 | )           |   |   | (53 | ) |
| Minority                  interests:                                                 |                                                      |   |                                                                                                |   |   |                                                  |   |   |   |   |   |        |   |   |   |   |   |
| Equity                  in earnings of affiliates                                    |                                                      |   | 536                                                                                                 |   |   |                                                  | 456    |   |   |   | 129    |        |   |   | 209 |   |
| Distributions                  to minority interests                                 |                                                      |   | (541                                                                                                | )      |   |                                                  | (420   | )      |   |   | (155   | )           |   |   | (60 | ) |
|                                                                                 |                                                      |   |                                                                                                |   |   |                                                  |   |   |   |   |   |        |   |   |   |   |   |
|                                                                                 | **FFO**                                                   |   | $                                                                                                   | 6,889  |   |                                                  | $      | 6,760  |   |   | $      | 2,688       |   |   | $ | 2,745 |   |
|                                                                                 |                                                      |   |                                                                                                |   |   |                                                  |   |   |   |   |   |        |   |   |   |   |   |
|                                                                                 | *** Per                  Share - Basic***            |   | *$*                                                                                                 | *1.02* |   |                                                  | *$*    | *1.04* |   |   | *$*    | *0.40*      |   |   | *$* | *0.42* |   |
|                                                                                 | *** Per                  Share - Diluted***          |   | *$*                                                                                                 | *1.00* |   |                                                  | *$*    | *1.00* |   |   | *$*    | *0.39*      |   |   | *$* | *0.40* |   |
|                                                                                 |                                                      |   |                                                                                                |   |   |                                                  |   |   |   |   |   |        |   |   |   |   |   |
|                                                                                 | **Weighted                  Average Shares Outstanding:** |   |                                                                                                |   |   |                                                  |
|                                                                                 | * Basic*                                             |   |                                                                                                | 6,752  |   |                                                  |   | 6,530  |   |   |   | 6,756       |   |   |   | 6,548 |   |
|                                                                                 | * Diluted*                                           |   |                                                                                                | 6,919  |   |                                                  |   | 6,787  |   |   |   | 6,925       |   |   |   | 6,888 |   |
|                                                                                 |                                                      |   |                                                                                                |   |   |                                                  |   |   |   |   |   |        |   |   |   |   |   |
|  *  Restated                  (See Notes 1 & 4 for more details.) |                                                      |   |                                                                                                |   |   |                                                  |   |   |   |   |   |        |   |   |   |   |

----

*Index*

----

*Index*

**Item      3: Quantitative and Qualitative Disclosures About Market      Risk**

**Item      4: Controls and Procedures**

**Part      II:  Other Information**

**Item      6: Exhibits**

| Exhibit                Index                                                                                             |
|--------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                     |   |
|                                                                                                                     | Page |
|                                                                                                                     |   |
| Exhibit                31.1 - Section 302 Certification of Chief                Executive Officer                        | 21 |
|                                                                                                                     |   |
| Exhibit                31.2 - Section 302 Certification of Chief                Financial Officer                        | 22 |
|                                                                                                                     |   |
| Exhibit                32.1 - Certification of Chief Executive Officer                pursuant to 18 U.S.C. Section 1350 | 23 |
|                                                                                                                     |   |
| Exhibit                32.2 - Certification of Chief Financial Officer                pursuant to 18 U.S.C. Section 1350 | 24 |

----

*Index*

**SIGNATURES**

|                                    | **FIRST                REAL ESTATE INVESTMENT**                                                                                                        |
|-----------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                    | **           TRUST                OF NEW JERSEY**                                               |
|                                    |                        (Registrant) |
|                                    |                                                                                                                                                   |
| Date:                September 10, 2007 |                                                                                                                                                   |
|                                    | /s/                Robert S. Hekemian                                                                                                                  |
|                                    |           (Signature)                                                                                |
|                                    | Robert                S. Hekemian                                                                                                                      |
|                                    | Chairman                of the Board and Chief Executive Officer                                                                                       |
|                                    | (Principal                Executive Officer)                                                                                                           |
|                                    |                                                                                                                                                   |
|                                    |                                                                                                                                                   |
|                                    | /s/                Donald W. Barney                                                                                                                    |
|                                    |           (Signature)                                                                                |
|                                    | Donald                W. Barney                                                                                                                        |
|                                    | President,                Treasurer and Chief Financial Officer                                                                                        |
|                                    | (Principal                Financial/Accounting Officer)                                                                                                |