**HACKENSACK,      NJ,**

**Results      of Operations:**

|                                                                            | Nine                  Months Ended                                                                      |   |                                                                                  |   | Three                  Months Ended                                       |   |                                                                      |
|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|
|                                                                            | July                  31,                                                                     |   | Increase                                                                              |   | July                  31,                                       |   | Increase                                                                  |
|                                                                            | 2007                                                                                                    |   | 2006                                                                                  |   | (decrease)                                                                |   | 2007                                                                      |   | 2006 |   | (decrease) |
|                                                                            |  (in                  thousands, except per share)         |
| Commercial                  revenues:                                           |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |
| Same                  properties (1)                                            |  $                  16,610                                                                         |   |  $                  16,462                                                       |   |  $     148                                  |   |  $  5,610                                                  |   |  $                  5,588 |   |  $      22 |
| New                  properties                                                 |              -                         |   |               - |   |             - |   |             - |   |             - |   |             - |
|                                                                            |      16,610                                                                    |   |      16,462                                                  |   |          148                 |   |       5,610                                 |   |      5,588 |   |           22 |
| Residential                  revenues:                                          |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |
| Same                  properties (1)                                            |      12,183                                                                    |   |        11,631                                      |   |         552                       |   |       4,196                                 |   |      3,942 |   |         254 |
| New                  properties                                                 |        1,703                                                         |   |             46            |   |       1,657                                 |   |         635                       |   |            46 |   |         589 |
|                                                                            |     13,886                                                                          |   |       11,677                                            |   |      2,209                                       |   |       4,831                                 |   |      3,988 |   |         843 |
|       Total                  Real Estate Revenues |    30,496                                                                                |   |      28,139                                                  |   |      2,357                                       |   |     10,441                                            |   |      9,576 |   |         865 |
|                                                                            |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |
| Operating                  expenses:                                            |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |
|   Real                  estate operations                             |     12,545                                                                          |   |       11,476                                            |   |       1,069                                 |   |        4,114                           |   |      3,596 |   |          518 |
|   General                  and administrative                         |        1,277                                                         |   |           779                       |   |         498                       |   |         474                       |   |         253 |   |          221 |
|   Depreciation                                                        |       3,972                                                               |   |       3,456                                             |   |          516                 |   |       1,323                                 |   |        1,195 |   |          128 |
|       Total                  operating expenses   |     17,794                                                                          |   |        15,711                                      |   |      2,083                                       |   |        5,911                           |   |      5,044 |   |         867 |
|                                                                            |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |
|       Operating                  Income           |     12,702                                                                          |   |      12,428                                                  |   |         274                       |   |      4,530                                       |   |      4,532 |   |            (2) |
|                                                                            |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |
| Investment                  income                                              |          382                                               |   |            150                 |   |         232                       |   |          157                 |   |            37 |   |          120 |
|                                                                            |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |
|   Financing                  costs                                    |     (9,099)                                                                         |   |      (8,291)                                                 |   |       (808)                                 |   |     (3,010)                                           |   |    (2,784) |   |       (226) |
|   Minority                  interest in earnings of subsidiaries      |        (386)                                                         |   |         (366)                                 |   |          (20)                |   |        (129)                           |   |       (209) |   |           80 |
|   Distribution                  to certain minority interests         |         (150)                                                   |   |           (90)                      |   |          (60)                |   |             - |   |             - |   |             - |
| 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 |
|                                                                            |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |
| Basic                  earnings per share:                                      |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |
|   Continuing                  operations                              | $0.51                                                                                                   |   | $0.59                                                                                 |   | ($0.08)                                                                   |   | $0.23                                                                     |   | $0.24 |   | ($0.01) |
|   Discontinued                  operations                            | $0.56                                                                                                   |   | $0.02                                                                                 |   | $0.54                                                                     |   | $0.55                                                                     |   | $0.01 |   | $0.54 |
| Net                  income                                                     | $1.07                                                                                                   |   | $0.61                                                                                 |   | $0.46                                                                     |   | $0.78                                                                     |   | $0.25 |   | $0.53 |
|                                                                            |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |
| Diluted                  earnings per share:                                    |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |
|   Continuing                  operations                              | $0.50                                                                                                   |   | $0.56                                                                                 |   | ($0.06)                                                                   |   | $0.22                                                                     |   | $0.23 |   | ($0.01) |
|   Discontinued                  operations                            | $0.54                                                                                                   |   | $0.02                                                                                 |   | $0.52                                                                     |   | $0.54                                                                     |   | $0.01 |   | $0.53 |
| Net                  income                                                     | $1.04                                                                                                   |   | $0.58                                                                                 |   | $0.46                                                                     |   | $0.76                                                                     |   | $0.24 |   | $0.52 |
|                                                                            |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |
| Weighted                  average shares outstanding:                           |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |
|   Basic                                                               | 6,752                                                                                                   |   | 6,530                                                                                 |   |                                                                      |   | 6,756                                                                     |   | 6,548 |   |   |
|   Diluted                                                             | 6,919                                                                                                   |   | 6,787                                                                                 |   |                                                                      |   | 6,925                                                                     |   | 6,888 |   |   |
|                                                                            |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |
| (1)                  Properties operated since the beginning of fiscal 2006.    |                                                                                                    |   |                                                                                  |   |                                                                      |   |                                                                      |   |   |   |   |

----

| **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 |
|                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **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 |

----

|     |   | 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 |
|     |   |                                                                                                                    |   |   |   |   |   |   |   |   |   |   |

----

**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 |

----

**DIVIDENDS**

***The      statements in this report that relate to future earnings or performance are      forward-looking. Actual results might differ materially and be adversely      affected by such factors as longer than anticipated lease-up periods or the      inability of tenants to pay increased rents. Additional information about these      factors is contained in the Trust’s filings with the SEC including the Trust’s      most recent filed report on Form 10-K and Form 10-Q.***

***First      Real Estate Investment Trust**is a publicly traded (over-the-counter –symbol FREVS) REIT organized in 1961. It has approximately $242 million      (historical cost basis) of assets. Its portfolio of residential and commercial      properties extends from Eastern L.I. to Maryland, with the largest concentration      in Northern New Jersey.*

**For      additional information contact Shareholder Relations at (201)      488-6400**