**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington
      D.C. 20549**





**SCHEDULE
      14A**


**(Rule
      14a-101)**





**INFORMATION
      REQUIRED IN PROXY STATEMENT**


**SCHEDULE
      14A INFORMATION**





**Proxy
      Statement Pursuant to Section 14(a) of the**


**Securities
      Exchange Act of 1934**





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      by
      the Registrant þ


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      by
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      appropriate box:





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      Proxy Statement


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      for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))


þ  Definitive
      Proxy Statement


o  Definitive
      Additional Materials


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      Material Pursuant to Rule 14a-11(c) or Rule 14a-12





FIRST
      REAL ESTATE INVESTMENT TRUST OF NEW JERSEY





(Name
      of
      Registrant as Specified in its Charter)


(Name
      of
      Person(s) Filing Proxy Statement, if other than the Registrant)


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      of Filing Fee (Check the appropriate box):





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      fee
      required


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                of each class of securities to which transaction
                applies:





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                number of securities to which transaction
                applies:





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                unit price or other underlying value of transaction computed pursuant
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                calculated and state how it was
                determined):





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      and the date of its filing.




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**PROXY
      STATEMENT**




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


**505
      Main Street, P.O. Box 667**


**Hackensack,
      New Jersey 07602**




**-----------------------------------------**




**NOTICE
      OF ANNUAL MEETING OF HOLDERS**


**OF
      SHARES OF BENEFICIAL INTEREST**


**April
      4, 2007**




**-----------------------------------------**




TO
      THE
      HOLDERS OF SHARES OF BENEFICIAL INTEREST OF


FIRST
      REAL ESTATE INVESTMENT TRUST OF NEW JERSEY




The
      Annual Meeting of the holders (the “Shareholders”) of shares of beneficial
      interest without par value (the “Shares”) of First Real Estate Investment Trust
      of New Jersey (the “Trust”) will be held on Wednesday, April 4, 2007, at the
      Trust’s executive offices, 505 Main Street, Hackensack, New Jersey at 7:30 p.m.,
      Eastern Daylight Savings Time, for the following purposes:




1.
            To
                elect two (2) Trustees for terms of three (3) years or until their
                successors have been elected and qualified;




2.
            To
                consider and act upon an amendment to the First Real Estate Investment
                Trust of New Jersey Equity Incentive Plan (the “Equity Incentive Plan”)
                reserving an additional 300,000 Shares for issuance thereunder;




3.
            To
                consider and act upon an amendment to the Equity Incentive Plan extending
                the term of the Equity Incentive Plan until September 10, 2018;
                and




4.
            To
                transact such other business as may properly come before the meeting
                or
                any adjournment thereof.




The
      Shareholders of record at the close of business on February 19, 2007 are
      entitled to notice of and to vote at the meeting.


JOHN
                      A. AIELLOSecretary






Hackensack,
      New Jersey


February
      28, 2007




**YOU
      ARE CORDIALLY INVITED TO ATTEND THE MEETING. TO ENSURE YOUR REPRESENTATION
      AT
      THE MEETING, HOWEVER, YOU ARE URGED TO SIGN AND DATE THE ACCOMPANYING PROXY
      AND
      MAIL IT AT ONCE IN THE ENCLOSED ENVELOPE. PROMPT RESPONSE IS HELPFUL AND YOUR
      COOPERATION WILL BE APPRECIATED.**












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




**---------------**




**PROXY
      STATEMENT**




**---------------**




**General
      Information**




This
      Proxy Statement is furnished to the holders (the “Shareholders”) of shares of
      beneficial interest without par value (the “Shares”) of First Real Estate
      Investment Trust of New Jersey (the “Trust”) in connection with the solicitation
      of proxies for use at the Annual Meeting of the Shareholders to be held on
      Wednesday, April 4, 2007 and any adjournment or postponement thereof (the
“Annual Meeting”), pursuant to the accompanying Notice of Annual Meeting of
      Holders of Shares of Beneficial Interest. The Shares represent beneficial
      interests in the Trust, and the Shares are the only authorized, issued and
      outstanding class of equity of the Trust. A form of proxy for use at the Annual
      Meeting is also enclosed. The Trust anticipates mailing this Proxy Statement
      to
      its Shareholders beginning on February 28, 2007. The executive offices of the
      Trust are located at 505 Main Street, Hackensack, New Jersey 07602.




Shareholders
      may revoke the authority granted by their execution of proxies at any time
      before the effective exercise of proxies by filing written notice of such
      revocation with the Secretary of the Annual Meeting. Presence at the Annual
      Meeting does not of itself revoke the proxy. All Shares represented by executed
      and unrevoked proxies will be voted in accordance with the instructions therein.
      Proxies submitted without indication will be voted FOR the nominees for Trustee
      named in this Proxy Statement, FOR the amendment of the First Real Estate
      Investment Trust of New Jersey Equity Incentive Plan (the “Equity Incentive
      Plan”) reserving an additional 300,000 Shares for issuance thereunder, and FOR
      the amendment of the Equity Incentive Plan extending the term of the Equity
      Incentive Plan until September 10, 2018. The Board of Trustees of the Trust
      (the
“Board of Trustees”) is not aware, at the date hereof, of any matters to be
      presented at the Annual Meeting other than the election of Trustees and the
      amendments to the Equity Incentive Plan as described in this Proxy Statement,
      but if any other matter incident to the Annual Meeting is properly presented,
      the persons named in the proxy will vote thereon according to their best
      judgment.




The
      cost
      of preparing, assembling and mailing the proxy materials is to be borne by
      the
      Trust. Proxies for use at the Annual Meeting are being solicited by the Board
      of
      Trustees. It is not anticipated that any compensation will be paid for
      soliciting proxies and the Trust does not intend to employ specially engaged
      personnel in the solicitation of proxies. It is contemplated that proxies will
      be solicited principally through the mail. Members of the Board of Trustees
      and
      executive officers of the Trust (“Executive Officers”) may also, without
      additional compensation, solicit proxies, personally or by mail, special letter,
      telephone, telegraph, facsimile transmission or other electronic means.




**Voting
      Securities**




The
      only
      voting securities entitled to vote at the Annual Meeting are the Shares. Each
      Share entitles its owner to one vote on an equal basis. 6,750,652 Shares were
      issued and







outstanding
      on the record date, February 19, 2007. Only Shareholders of record on the books
      of the Trust at the close of business on February 19, 2007 are entitled to
      notice of and to vote at the Annual Meeting. The holders of a majority of the
      outstanding Shares, present in person or represented by proxy, will constitute
      a
      quorum at the Annual Meeting. Abstentions and broker non-votes will be counted
      for purposes of determining whether a quorum is present at the Annual
      Meeting.




A
      plurality of the votes cast at the Annual Meeting by the holders of Shares
      present in person or represented by proxy and entitled to vote is required
      in
      order to elect the nominees for Trustee. The proxy card provides space for
      a
      Shareholder to withhold his or her vote for a nominee to the Board of Trustees.
      The affirmative vote of a majority of the Shares present in person or
      represented by proxy and entitled to vote is required to approve each amendment
      to the Equity Incentive Plan.




All
      votes
      will be tabulated by the inspector of election appointed for the Annual Meeting
      who will separately tabulate affirmative and negative votes, authority withheld
      for the nominees for Trustee, abstentions and broker non-votes. Any proxy
      submitted and containing any abstention or a broker non-vote will not be counted
      as a vote cast with respect to the election of Trustees, the amendments to
      the
      Equity Incentive Plan or any other matter to which it relates.




2


**Security
      Ownership of Certain Beneficial Owners and Management**




The
      following table sets forth information, as of February 19, 2007 with respect
      to
      beneficial ownership, as defined in Rule 13d-3 of the Securities Exchange Act
      of
      1934, as amended (the “Exchange Act”), of beneficial interests in the Trust, as
      represented by the Shares, for each Trustee, nominee for Trustee, and Executive
      Officer of the Trust. The only persons who beneficially own five percent (5%),
      or more, of the Shares are four (4) Trustees named in the table
      below.




**Amount
      and Nature of Beneficial Ownership**




**Name
                of Beneficial Owner**
            
            **(A)**
              **Aggregate**
              **Number
                of Shares Beneficially**
              **Owned
                (l)**
            
            **(B)**
              **Number
                of Shares Acquirable within**
              **60
                Days (2)**
            
            **(C)**
              **Aggregate**
              **Number
                of Shares**
              **Deemed
                to be**
              **Beneficially**
              **Owned**
              **(Column
                A plus**
              **Column
                B)**
            
            **(D)**
              **Percent**
              **of
                Class**Robert
                S. Hekemian (3)
            
            
            447,019(4
            )
            
            
            --
            
            
            
            447,019
            
            
            
            6.6
            %Donald
                W. Barney (3)
            
            
            255,840
                (5
            )
            
            
            84,000
            
            
            
            339,840
            
            
            
            5.0
            %Herbert
                C. Klein, Esq. (6)
            
            
            359,512
                (7
            )
            
            
            --
            
            
            
            359,512
            
            
            
            5.3
            %Ronald
                J. Artinian (6)
            
            
            469,516
                (8
            )
            
            
            --
            
            
            
            469,516
            
            
            
            7.0
            %Alan
                L. Aufzien (6)
            
            
            32,000
            
            
            
            --
            
            
            
            32,000
            
            
            
            (9
            )John
                A. Aiello, Esq. (10)
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --All
                Trustees, Nominees for
              Trustee
                and Executive Officers as
              a
                group (6 persons)
            
            
            1,563,887
            
            
            
            84,000
            
            
            
            1,647,887
            
            
            
            24.1
            %




(1)
            Except
                as otherwise indicated, all of the Shares are held beneficially and
                of
                record.




(2)
            Shares
                subject to currently exercisable options granted under the Trust’s Equity
                Incentive Plan.




(3)
            A
                Trustee and Executive Officer of the
                Trust.




(4)
            Includes
                74,392 Shares held by Mr. Hekemian’s wife, with respect to which Mr.
                Hekemian disclaims beneficial ownership. Also includes (i) 87,472
                Shares
                held by the Hekemian & Co., Inc. Pension Plan of which Mr. Hekemian is
                a trustee and a participant, (ii) an aggregate of 105,364 Shares
                which are
                held by certain partnerships in which Mr. Hekemian is a partner, (iii)
                14,196 Shares held in certain trusts for which Mr. Hekemian is a
                trustee
                and one trust in which Mr. Hekemian is a beneficiary, and (iv) 46,740
                Shares held by the Robert and Mary Jane Hekemian Foundation, Inc.
                of which
                Mr. Hekemian is the President, all of such Shares
                with




3


respect
      to which Mr. Hekemian disclaims beneficial ownership thereof except to the
      extent of his pecuniary interest in the pension plan, partnerships and
      trusts.




(5)
            Includes
                (i) 46,928 Shares held by Mr. Barney’s wife, with respect to which Mr.
                Barney disclaims beneficial ownership, and (ii) 68,988 Shares held
                by the
                Estate of Irene B. Barney, of which Mr. Barney is the executor.




(6)
            A
                Trustee of the Trust.




(7)
            Includes
                189,156 Shares held by Mr. Klein’s wife and 27,000 Shares held in the
                Krieger charitable trust of which Mr. Klein’s wife is trustee, with
                respect to both of which Mr. Klein disclaims beneficial ownership.
                Also
                includes 3,240 Shares held by The Herbert & Jacqueline Klein Family
                Foundation, Inc.




(8)
            Includes
                95,048 Shares which are in a family trust with respect to which Mr.
                Artinian disclaims beneficial ownership except to the extent of his
                pecuniary interest in such trust. Also includes 3,800 Shares which
                are
                held by Mr. Artinian’s son and 1,100 Shares which are held by Mr.
                Artinian’s daughter, with respect to which Mr. Artinian disclaims
                beneficial ownership.




(9)
            Shares
                beneficially owned do not exceed one percent (1%) of the Trust’s issued
                and outstanding Shares.




(10)
            An
                Executive Officer of the Trust.




4


**ELECTION
      OF TRUSTEES**




The
      Board
      of Trustees governs the Trust. The Declaration of Trust provides that the Board
      of Trustees will consist of not fewer than five (5) nor more than nine (9)
      Trustees.




The
      Board
      of Trustees has fixed the number of Trustees at five (5). The term of two (2)
      Trustees shall expire at the Annual Meeting. In order to allow the Board of
      Trustees to be able to strike a balance with respect to the number of Trustees
      whose terms are expiring at each annual meeting of the Shareholders, the
      Declaration of Trust authorizes the Board of Trustees to designate whether
      the
      term of a nominee for Trustee shall either be two (2) years or three (3) years
      at the time a Trustee is nominated for election.




**Nominees**




Consistent
      with the recommendation of the Nominating Committee, the Board of Trustees
      has
      nominated each of Ronald J. Artinian and Alan L. Aufzien for election at the
      Annual Meeting to a three (3) year term as a Trustee to commence at the Annual
      Meeting.




Ronald
      J.
      Artinian and Alan L. Aufzien are currently members of the Board of Trustees,
      with their terms of office scheduled to expire as of the date of the Annual
      Meeting. Please see the section captioned “Board of Trustees” below for a
      description of the business experience of and other relevant information with
      respect to Ronald J. Artinian and Alan L. Aufzien.




It
      is the
      intention of the persons named in the accompanying proxy to vote, unless
      otherwise instructed, in favor of the election of Ronald J. Artinian and Alan
      L.
      Aufzien to three (3) year terms as Trustees. Should Mr. Artinian or Mr. Aufzien
      be unable to serve, the proxies will be voted for the election of such other
      person or persons as shall be determined by the persons named in the proxy
      in
      accordance with their judgment, and any such person elected in the place of
      Mr.
      Artinian or Mr. Aufzien shall be elected to a three (3) year term as a Trustee.
      Management of the Trust is not aware of any reason why Mr. Artinian or Mr.
      Aufzien, if elected, would be unable to serve as a Trustee.




The
      Board
      of Trustees recommends a vote **FOR** the
      election of Ronald J. Artinian and Alan L. Aufzien to three (3) year terms
      as
      Trustees.




**Board
      of Trustees**




The
      members of the Board of Trustees of the Trust are:


**Name**
            **Age**
            **Year
                First Elected to**
              **the
                Board of Trustees**Robert
                S. Hekemian
            75
            1980Donald
                W. Barney
            66
            1981Herbert
                C. Klein, Esq.
            76
            1961Ronald
                J. Artinian
            58
            1992Alan
                L. Aufzien
            77
            1992







5


**Robert
      S. Hekemian** has been
      active in the real estate industry for more than fifty-three (53) years. Mr.
      Hekemian has served as Chairman of the Board and Chief Executive Officer of
      the
      Trust since 1991, and as a Trustee since 1980. From 1981 to 1991, Mr. Hekemian
      was President of the Trust. From June 24, 2002 through January 15, 2003, Mr.
      Hekemian served as Chief Financial Officer of the Trust. As Chairman and Chief
      Executive Officer of the Trust, Mr. Hekemian provides the general, day to day,
      management of the Trust. His current term as a member of the Board of Trustees
      is scheduled to expire in April 2008. Mr. Hekemian devotes approximately fifty
      percent (50%) to sixty percent (60%) of his time to perform his duties as an
      Executive Officer of the Trust. Since 1983, Mr. Hekemian has also been the
      Chairman of the Board and Chief Executive Officer of Hekemian & Co., Inc., a
      real estate brokerage and management company which manages the Trust’s
      properties (“Hekemian & Co.”). See the section entitled “Certain
      Relationships and Related Party Transactions” in this Proxy Statement. Mr.
      Hekemian is a director of Pascack Community Bank. He is also a director, a
      partner and an officer in numerous private real estate corporations and
      partnerships.




**Donald
      W. Barney** has
      served as President of the Trust since 1993, as Treasurer and Chief Financial
      Officer of the Trust since 2003, and as a Trustee since 1981. His current term
      as a member of the Board of Trustees is scheduled to expire in April 2009.
      Mr.
      Barney devotes approximately fifteen percent (15%) of his time to perform his
      duties as an Executive Officer of the Trust. Mr. Barney was associated with
      Union Camp Corporation, a diversified manufacturer of paper, packaging products,
      chemicals and wood products, from 1969 through 1998 in various positions,
      including Vice President and Treasurer. Mr. Barney is a director of Hilltop
      Community Bank. He is also a partner and director in several private real estate
      investment companies.




**Herbert
      C. Klein, Esq.,** has
      served continuously as a Trustee since 1961 except for the two (2) year period
      from January 1993 to January 1995, when Mr. Klein served as an elected member
      of
      the United States Congress, House of Representatives, for the 8th Congressional
      District of New Jersey. His current term as a member of the Board of Trustees
      is
      scheduled to expire in April 2009. From 1991 through the end of 1992, Mr. Klein
      served as President of the Trust. Mr. Klein has been an attorney since 1956
      with
      a practice devoted to real estate, corporate matters and government relations.
      Since January 1999, Mr. Klein has been a Partner in the law firm of Nowell
      Amoroso Klein Bierman P.A., with offices located in Hackensack, New Jersey
      and
      New York City. See section entitled “Certain Relationships and Related Party
      Transactions” in this Proxy Statement. Mr. Klein is a former member of the New
      Jersey State Assembly. Mr. Klein is a partner and principle in numerous private
      investment real estate companies.




**Ronald
      J. Artinian** has
      served as a Trustee since 1992. His current term as a member of the Board of
      Trustees is scheduled to expire in April 2007. From 1989 to 1998, Mr. Artinian
      was an investment banker with Smith Barney, Inc., including positions as a
      Managing Director and National Sales Manager. Mr. Artinian retired from Smith
      Barney in January 1998 in order to pursue other business interests as a private
      investor.




**Alan
      L. Aufzien** has
      served as a Trustee since 1992. His current term as a member of the Board of
      Trustees is scheduled to expire in April 2007. Since 1986, Mr. Aufzien has
      been
      Chairman and Managing Partner of The Norall Organization, an investment company.
      From 1980 to 1998, Mr. Aufzien was a partner in the Meadowlands Basketball
      Association, t/a New Jersey Nets (Member of the National Basketball
      Association), and was its Chairman and Chief Executive Officer, and then its
      Secretary and Treasurer, as well as a member of its Board of




6


Directors.
      Since 1986, Mr. Aufzien has also been the Chairman and Chief Executive Officer
      of New York Harbour Associates, a real estate developer.




**Meetings
      of the Board of Trustees**




During
      the fiscal year ended October 31, 2006, the Board of Trustees held eleven (11)
      meetings. During fiscal 2006, each incumbent member of the Board of Trustees
      attended more than seventy-five percent (75%) **** of
      the
      aggregate number of (i) meetings of the Board of Trustees, and (ii) meetings
      of
      the committees of the Board of Trustees on which he served. John A. Aiello,
      Secretary and Executive Secretary of the Trust, attends meetings of the Board
      of
      Trustees and each of its committees in a non-voting capacity.




**Trustee
      Attendance at Annual Meeting**




The
      Trust
      encourages all of the Trustees to attend the Annual Meeting, and expects that
      all Trustees will attend the Annual Meeting absent a valid reason such as a
      scheduling conflict. All of the Trustees attended the Annual Meeting of
      Shareholders held on April 11, 2006.




**Committees
      of the Board of Trustees**




The
      Board
      of Trustees has three (3) standing committees: Executive Committee, Nominating
      Committee and Audit Committee.




**(a)**
            **Executive
                Committee**




The
      Executive Committee of the Board of Trustees is authorized to make policy and
      certain business decisions during any interval between meetings of the Board
      of
      Trustees. All decisions of the Executive Committee are reported to the Board
      of
      Trustees on a regular basis. During fiscal 2006, the members of the Executive
      Committee were, and currently are, identical to the current members of the
      Board
      of Trustees, and accordingly, it was not necessary for the Executive Committee
      to separately meet during fiscal 2006. Mr. Hekemian is the Chairman of the
      Executive Committee.




**(b)**
            **Nominating
                Committee**




The
      Nominating Committee is authorized to identify, evaluate and recommend to the
      Board of Trustees prospective nominees for Trustee, periodically review the
      Trust’s governance guidelines and make recommendations to the Board of Trustees
      from time to time as to matters of governance. The Nominating Committee also
      periodically reviews the performance of the Board of Trustees and its members
      and makes recommendations to the Board of Trustees on the number, function,
      and
      composition of the Board of Trustees and the committees of the Board of
      Trustees, and on the terms of the Trustees. The Nominating Committee’s charter
      is included as Appendix A to the proxy statement for the 2006 annual meeting
      which can be viewed at *www.sec.gov* .




The
      Nominating Committee is authorized to review the qualifications of various
      persons to determine whether they might make good candidates for consideration
      for membership on the Board of Trustees. This would include a review of the
      nominee’s business judgment, skill and experience, the nominee’s understanding
      of the Trust’s business and industry and other related




7


industries,
      the nominee’s integrity, reputation and independence, and such other factors as
      the Nominating Committee determines are relevant in light of the needs of the
      Board of Trustees and the Trust and its Shareholders. With respect to any
      nominee up for re-election to the Board of Trustees, the Nominating Committee
      is
      authorized to consider the nominee’s performance on the Board of Trustees before
      nominating the Trustee for re-election at an annual meeting. The Trust does
      not
      pay a fee to any third party to identify or assist in identifying or evaluating
      potential nominees.




The
      Nominating Committee will also consider candidates for Trustee recommended
      by
      the Shareholders. The process by which a Shareholder may suggest a candidate
      to
      be nominated for election to the Board of Trustees can be found in the section
      of this Proxy Statement entitled “Shareholder Proposals and Recommendations for
      Nomination of Trustees.” The Nominating Committee will apply the same criteria
      described above in reviewing and evaluating the qualifications of any candidate
      recommended by a Shareholder; provided, that it remains in the sole discretion
      of the Nominating Committee whether any such potential nominee suggested by
      a
      Shareholder is recommended by the Nominating Committee to the Board of
      Trustees.




The
      current members of the Nominating Committee of the Board of Trustees are Robert
      S. Hekemian and Herbert C. Klein. Although Mr. Klein meets the requirements
      for
      independence set forth in the definition of “independent director” promulgated
      by the National Association of Securities Dealers, Inc. (“NASD) and approved by
      the Securities and Exchange Commission (“SEC”), Mr. Hekemian is not considered
      independent under the NASD’s definition of “independent director” since he is an
      Executive Officer of the Trust. In 2006, the Nominating Committee acted by
      unanimous written consent to recommend to the Board of Trustees that Ronald
      J.
      Artinian and Alan L. Aufzien be nominated for re-election as a Trustee at the
      Annual Meeting to three (3) year terms.




**(c)**
            **Audit
                Committee**




The
      current members of the Audit Committee of the Board of Trustees are Ronald
      J.
      Artinian, Alan L. Aufzien and Herbert C. Klein. Mr. Artinian is the Chairman
      of
      the Audit Committee. Each of Mr. Artinian and Mr. Aufzien satisfies the audit
      committee qualifications under the NASD listing standards and is independent,
      as
      independence for audit committee members is defined in the NASD listing
      standards. Although Mr. Klein meets the requirements for independence set forth
      in the NASD definition of “independent director,” he does not meet the criteria
      for independence set forth in Exchange Act Rule 10A-3(b)(1) because the law
      firm
      of Nowell, Amoroso, Klein, Bierman, P.A., in which Mr. Klein is currently a
      partner, has received and will continue to receive legal fees from the Trust
      for
      legal services provided and to be provided to the Trust. See the Section of
      this
      Proxy Statement entitled “Certain Relationships and Related Party Transactions.”
Accordingly, Mr. Klein does not satisfy the independence requirement for
      qualification as an audit committee member under the NASD listing standards.
      Mr.
      Klein had resigned from the Audit Committee in January 2003, upon a
      determination that he would not satisfy the independence requirement of the
      audit committee qualifications under the NASD listing standards. However, the
      Board of Trustees reappointed Mr. Klein to the Audit Committee in June 2003
      since the Board of Trustees believes that his background and experience and
      the
      valuable contributions that he makes to the Audit Committee sufficiently
      mitigate any concerns arising out of the fact that he does not satisfy the
      independence requirement of the audit committee qualifications under the NASD
      listing standards.




8


The
      Audit
      Committee held six (6) meetings during fiscal 2006. The Audit Committee selects
      the independent registered public accounting firm (the “Independent Auditors”)
      to audit the books and accounts of the Trust. In addition, the Audit Committee
      reviews and pre-approves the scope and costs of all services (including
      non-audit services) provided by the Independent Auditors. The Audit Committee
      also monitors the effectiveness of the audit effort and financial reporting
      and
      inquires into the adequacy of the Trust’s financial and operating controls.




Based
      on
      its review of the criteria of an Audit Committee Financial Expert under the
      rule
      adopted by the SEC, the Board of Trustees believes that the members of the
      Trust’s Audit Committee may not qualify as Audit Committee Financial
      Experts.




Each
      of
      Mr. Artinian, Mr. Aufzien and Mr. Klein has made significant contributions
      and
      provided valuable service to the Trust and its Shareholders as members of the
      Audit Committee. The Board of Trustees believes that each of Mr. Artinian,
      Mr.
      Aufzien and Mr. Klein has demonstrated that he is capable of (i) understanding
      accounting principles generally accepted in the United States of America
      (“GAAP”), (ii) assessing the general application of GAAP principles in
      connection with the accounting for estimates, accruals and reserves, (iii)
      understanding financial statements and analyzing and evaluating the Trust’s
      financial statements, (iv) understanding internal controls and procedures for
      financial reporting, and (v) understanding audit committee functions, all of
      which are attributes of an Audit Committee Financial Expert under the rule
      adopted by the SEC. Given the business experience and acumen of Mr. Artinian,
      Mr. Aufzien and Mr. Klein and their long standing service as members of the
      Board of Trustees and its various committees, including the Trust’s Audit
      Committee, the Board of Trustees believes that each of Mr. Artinian, Mr. Aufzien
      and Mr. Klein is qualified to carry out all duties and responsibilities of
      the
      Trust’s Audit Committee.




The
      Board
      of Trustees believes that one of its members, Mr. Barney, would qualify as
      an
      Audit Committee Financial Expert. Mr. Barney resigned from the Audit Committee
      in connection with his appointment to the office of Treasurer of the Trust
      and
      his assumption of the role of Chief Financial Officer of the Trust. As Chief
      Financial Officer of the Trust, Mr. Barney has made and will continue to make
      the certifications required under the Sarbanes-Oxley Act of 2002 and the related
      rules adopted by the SEC with respect to (i) the Trust’s financial statements
      and other financial information included in periodic reports filed with the
      SEC,
      (ii) the Trust’s disclosure controls and procedures regarding the disclosure to
      the certifying officers of material information relating to the Trust, and
      (iii)
      the Trust’s internal controls and the adequacy of the design and operation of
      such internal controls. As a certifying officer of the Trust, Mr. Barney will
      meet with and make reports to the Audit Committee with respect to the items
      which are the subject matter of his certifications. The Board of Trustees
      believes that it is important to maintain independence between the Audit
      Committee and the certifying officers of the Trust, and that the significance
      and importance of maintaining such an independent relationship outweigh the
      importance of having a person who technically satisfies the definition of an
      Audit Committee Financial Expert serve on the Audit Committee.




At
      this
      time, the Board of Trustees does not believe that it is necessary to actively
      search for an outside person to serve on the Board of Trustees who would qualify
      as an Audit Committee Financial Expert.




9


**Audit
      Committee Report**




The
      following Report of the Audit Committee does not constitute soliciting material
      and should not be deemed filed or incorporated by reference into any other
      Trust
      filing under the Securities Act of 1933, as amended, or the Exchange Act, except
      to the extent the Trust specifically incorporates this Report by reference
      therein.




The
      Audit
      Committee meets each quarter during the fiscal year with the Trust’s Independent
      Auditors and members of Hekemian & Co. and focuses on the following
      areas:




a.
            the
                adequacy of the Trust’s internal controls and financial reporting process
                and the reliability of its financial
                statements;




b.
            the
                independence and performance of the Trust’s Independent Auditors and the
                cooperation received by the Independent Auditors from Hekemian & Co;
                and




c.
            the
                Trust’s compliance with all legal and regulatory requirements with
                particular emphasis upon all disclosures made by the Trust in its
                quarterly and annual reports to the
                SEC.




The
      Audit
      Committee meets separately with Hekemian & Co. and the Trust’s Independent
      Auditors. The Independent Auditors have unrestricted access to the Audit
      Committee. The Independent Auditors make a quarterly report directly to the
      Audit Committee out of the presence of Hekemian & Co. concerning all of
      their functions as the Trust’s Independent Auditors.




The
      Board
      of Trustees has adopted a written charter setting out the audit related
      functions. The Audit Committee’s charter is included as Appendix B to the proxy
      statement for the 2006 annual meeting which can be viewed at *www.sec.gov* .
      The
      Audit Committee reviews its charter on an annual basis and updates the charter
      as necessary.




Hekemian
      & Co. has primary responsibility for the Trust’s financial statements and
      the preparation of all financial statements and the maintenance of the Trust’s
      internal controls.




The
      Independent Auditors audit the annual financial statements prepared by Hekemian
      & Co., express an opinion as to whether those financial statements fairly
      present the financial position, results of operations and cash flows of the
      Trust in conformity with GAAP and discuss with the Audit Committee any issues
      they believe should be raised.




Effective
      September 13, 2006, the Trust changed its independent registered public
      accounting firm, J.H. Cohn, LLP, and engaged a new independent registered public
      accounting firm, Eisner LLP, to serve as the Trust’s Independent Auditors. As
      reported in its reports filed with the SEC, the decision to change the Trust’s
      independent registered public accounting firm was made by the Audit Committee
      and approved by the Trust’s Board of Directors.




This
      year, the Audit Committee reviewed the Trust’s audited financial statements and
      met with both Hekemian & Co. and Eisner LLP to review all financial
      statements. Hekemian &




10


Co.
      has
      represented to the Audit Committee that the financial statements were prepared
      in conformity with GAAP.




The
      Audit
      Committee has received from and discussed with Eisner LLP the written disclosure
      and the letter required by Independence Standards Board Standard No. 1
      (Independence Discussion with Audit Committees). These items relate to that
      firm’s independence from the Trust. The Audit Committee also discussed with
      Eisner LLP any matters required to be disclosed in accord with statement on
      Auditing Standards No. 61 as amended (Communication with Audit
      Committees).




On
      the
      basis of these reviews and discussions, the Audit Committee recommended to
      the
      Board of Trustees that the Trust’s audited financial statements be included in
      the Trust’s Annual Report on Form 10-K for the fiscal year ended October 31,
      2006, for filing with the SEC.




Audit
      Committee :




Ronald
      J.
      Artinian, Chairman




Alan
      L.
      Aufzien




Herbert
      C. Klein, Esq.




11


**Executive
      Compensation**




The
      following table sets forth information concerning the compensation of all of
      the
      Executive Officers of the Trust as of October 31, 2006 for services in all
      capacities to the Trust for the fiscal years ended October 31, 2006, 2005 and
      2004. During the fiscal year ended October 31, 2006, Robert S. Hekemian served
      as Chairman of the Board and Chief Executive Officer of the Trust. Mr. Hekemian
      devotes approximately fifty percent (50%) to sixty percent (60%) of his business
      activities to the Trust. During the fiscal year ended October 31, 2006, Donald
      W. Barney served as President, Treasurer and Chief Financial Officer of the
      Trust. Mr. Barney devotes approximately fifteen percent (15%) of his business
      activities to the Trust. During the fiscal year ended October 31, 2006, John
      A.
      Aiello, Esq. served as the Secretary and the Executive Secretary of the Trust.
      Mr. Aiello devotes approximately five percent (5%) of his business activities
      to
      the Trust. With respect to all compensation, the term “paid” shall mean actually
      paid or deferred.




**SUMMARY
      COMPENSATION TABLE**




**Name
                and Principal**
            
            **Fiscal**
              **Year
                Ended**
            
            **Annual**
              **Compensation
                ($)(2)**
            
            **Other**
              **Annual**
              **Compensa-**
            
            **All
                Other**
              **Compensation
                ($)(4)****Position
                (1)**
            
            **October
                31**
            
            **Paid**
            
            **Deferred**
            
            **tion
                ($)(3)**
            
            **Paid**
            
            **Deferred**Robert
                S. Hekemian
            
            2006
            
            
            --
            
            
            
            $205,000
            
            
            
            $12,110
            
            
            
            --
            
            
            
            $99,433Chairman
                of the Board
            
            2005
            
            
            --
            
            
            
            $150,000
            
            
            
            $9,184
            
            
            
            --
            
            
            
            $83,253and
                Chief Executive
            
            2004
            
            
            --
            
            
            
            $139,625
            
            
            
            $4,626
            
            
            
            --
            
            
            
            $51,219OfficerDonald
                W. Barney
            
            2006
            
            
            --
            
            
            
            $50,000
            
            
            
            $4,598
            
            
            
            --
            
            
            
            $45,551President,
                Treasurer
            
            2005
            
            
            --
            
            
            
            $30,000
            
            
            
            $3,376
            
            
            
            --
            
            
            
            $37,737and
                Chief Financial
            
            2004
            
            
            --
            
            
            
            $25,000
            
            
            
            $2,501
            
            
            
            --
            
            
            
            $30,503OfficerJohn
                A. Aiello, Esq.
            
            2006
            
            
            $30,000
            
            
            
            --
            
            
            
            --
            
            
            
            $11,200
            
            
            
            --Secretary
            
            2005
            
            
            $25,000
            
            
            
            --
            
            
            
            --
            
            
            
            $13,200
            
            
            
            --2004
            
            
            $23,000
            
            
            
            --
            
            
            
            --
            
            
            
            $11,550
            
            
            
            --


(1)
            Represents
                the positions held by each Executive Officer on October 31,
                2006.




(2)
            Represents
                payment to the Executive Officers for their services as an Executive
                Officer of the Trust. The amounts deferred have been at the election
                of
                the Executive Officer pursuant to the terms of the Deferred Compensation
                Plan. See Section of this Proxy Statement entitled “Deferred Compensation
                Plan.”




(3)
            Amounts
                represent above-market accrued interest earned on executive officer
                fees
                payable in fiscal 2006, fiscal 2005 and fiscal 2004, but deferred
                at the
                election of the Executive Officers pursuant to the terms of the Deferred
                Compensation Plan. Payment of accrued interest is deferred until
                such time
                that the deferred executive officer fees are paid to the Executive
                Officers. See Section of this Proxy Statement entitled “Deferred
                Compensation Plan.”




(4)
            Such
                amounts represent annual retainer fees, Board of Trustees meeting
                fees,
                and other fees paid to the Executive Officers as consideration for
                their
                service on the Board of Trustees and, if applicable, its committees.
                In
                fiscal 2006, all such amounts payable to Mr. Hekemian and
                Mr.




12


Barney
      were deferred at the election of each Executive Officer pursuant to the terms
      of
      the Deferred Compensation Plan. Also includes accrued interest earned on
      deferred executive officer fees payable for service as an Executive Officer
      (other than above market accrued interest on executive officer fees payable
      in
      fiscal 2006, fiscal 2005 and fiscal 2004 which is disclosed in the “Other Annual
      Compensation” column of this Summary Compensation Table) and on deferred
      retainer fees payable for service as a Trustee and deferred meeting fees for
      attendance at meetings of the Board of Trustees or committees thereof. Payment
      of accrued interest is deferred until such time that the deferred fees are
      paid
      to the Executive Officers. See section of this Proxy Statement entitled
“Deferred Compensation Plan.”




Other
      than the annual executive officer fees and the accrued interest thereon for
      such
      fees which have been deferred, and the grant of options under the Trust’s Equity
      Incentive Plan, the Trust has not made available or paid any compensation or
      benefits to its Executive Officers, whether it be in the form of bonus,
      long-term incentive compensation, perquisites, rights, warrants, convertible
      securities, performance units, performance shares or other similar instruments.
      The Trust does not maintain any employee benefit plans, other than the Trust’s
      Equity Incentive Plan. There are no employment contracts between the Trust
      and
      any of the Executive Officers, nor is there any compensatory plan or arrangement
      between the Trust and any of the Executive Officers pursuant to which an
      Executive Officer would receive payments as the result of his resignation or
      retirement as an Executive Officer, or any other event resulting in the
      termination of his relationship with the Trust as an Executive Officer, or
      as a
      result of a change in control of the Trust. Mr. Hekemian is Chairman of the
      Board and Chief Executive Officer of Hekemian & Co, the managing agent of
      the Trust. Pursuant to the terms of the Management Agreement by and between
      Hekemian & Co. and the Trust, Hekemian & Co. is entitled to receive a
      termination fee from the Trust under certain circumstances, including the
      non-renewal of the Management Agreement by the Trust, termination of the
      Management Agreement by the Trust without cause, or termination of the
      Management Agreement by the Trust following an acquisition of the Trust. See
      the
      section of this Proxy Statement entitled “Certain Relationships and Related
      Party Transactions.”




13


**Fiscal
      Year-End Option Values**




The
      following table shows certain information, as of October 31, 2006, regarding
      the
      exercise of stock options by, and the fiscal year-end value of unexercised
      stock
      options held by, each of the Executive Officers of the Trust during the 2006
      fiscal year.




**Fiscal
                Year-End Option Values****Shares**
              **Acquired
                on**
              **Exercise
                (#)**
            
            **Value**
              **Realized**
              **($)**
            
            **Number
                of Securities**
              **Underlying
                Unexercised**
              **Options
                at Fiscal Year-End (#)**
            
            **Value
                of Unexercised**
              **In-The-Money
                Options**
              **at
                Fiscal Year End (1)****Name**
            
            
            
            
            
            **Exercisable**
            
            **Unexercisable**
            
            **Exercisable**
            
            **Unexercisable**Robert
                S.
              Hekemian
            
            
            112,000
            
            
            1,752,800
            
            
            --
            
            
            --
            
            
            --
            
            
            --Donald
                W.
              Barney
            
            
            28,000
            
            
            448,000
            
            
            84,000
            
            
            --
            
            $
            1,344,000
            
            
            --John
                A.
              Aiello,
                Esq.
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --





(1)
            The
                value of unexercised in-the-money options represents the difference
                between an option’s exercise price $7.50 and the fair market value of the
                Shares on October 31, 2006 of $23.50 per share. The actual value,
                if any,
                an Executive Officer may realize upon the exercise of an option will
                depend upon the excess of the fair market value of the Shares over
                the
                exercise price on the date the option is
                exercised.




**Fiscal
      2006 Compensation: Trustees**




During
      the fiscal year ended October 31, 2006, each Trustee, including every such
      Trustee who also served as an Executive Officer of the Trust, was entitled
      to
      receive an annual retainer fee in the amount of $15,000. The Trustees and the
      Executive Secretary were entitled to receive meeting attendance fees in the
      amount of $800 for each meeting of the Board of Trustees and its committees
      attended. The Chairman of the Board, for each Board of Trustees meeting
      attended, and the chairman of each Board of Trustees committee, for each
      committee meeting attended, were entitled to receive meeting attendance fees
      of
      $1,100. In addition, the Chairman of the Audit Committee was entitled to
      received an annual retainer fee in the amount of $5,000. The Trustees and the
      Executive Secretary were also entitled to receive property site inspection
      fees
      in the amount of $800 for each site inspection attended, plus the reimbursement
      of all reasonable and verified out-of-pocket expenses incurred in connection
      with the site visit. Each member of the Board of Trustees and the Executive
      Secretary were entitled to receive a fee of $400 for each meeting participated
      in by teleconference. The Trustees and the Executive Secretary are entitled
      to
      defer all or any part of their retainer, meeting and property site inspection
      fees pursuant to the terms of the Deferred Compensation Plan. For the fiscal
      year ended October 31, 2006, the Trustees were paid or elected to defer annual
      retainer fees, meeting attendance fees, site inspection fees and accrued
      interest, and the Executive Secretary was paid meeting attendance fees, in
      an
      aggregate amount of $586,079 **** as
      consideration for their services to the Board of Trustees and its
      committees.




14


**Fiscal
      2007 Compensation: Trustees and Executive Officers**




With
      respect to fees for the Trustees and the Executive Officers for the 2007 fiscal
      year, the Board of Trustees considered, among other things, fees paid by other
      real estate investment trusts, the duties and responsibilities of the Trustees
      and the Executive Officers and the value of the services provided by them,
      and
      the Trust’s operating results. For the 2007 fiscal year, the Board of Trustees
      approved an increase in the annual retainer fee for the Chairman of the Audit
      Committee from $5,000 to $10,000 and determined that all other fees will remain
      the same.




**Deferred
      Compensation Plan**




Effective
      November 1, 2000, the Board of Trustees adopted a deferred compensation plan
      (the “Deferred Compensation Plan”) for its Executive Officers and its Trustees.
      Pursuant to the Deferred Compensation Plan, any Executive Officer or Trustee
      may
      elect to defer receipt of any executive officer, Trustee retainer, meeting
      attendance, or property site inspection fee. The Trust has agreed to pay any
      Executive Officer or Trustee, who elects to participate in the Deferred
      Compensation Plan, interest on any deferred fees at the rate of nine percent
      (9%) per annum, compounded quarterly. Any such deferred fee and the interest
      accrued thereon shall be paid at the later of: (i) the retirement age specified
      by the Executive Officer or Trustee in the deferral election; (ii) actual
      retirement of the Executive Officer or Trustee; or (iii) upon cessation of
      duties as an Executive Officer or Trustee of the Trust. The Deferred
      Compensation Plan provides that any such deferred fees will be paid in a lump
      sum or in annual installments over a period not to exceed ten (10) years, at
      the
      election of the Executive Officer or Trustee. The Trust will not create a cash
      sinking fund for such deferred fees. As a result, any Executive Officer or
      Trustee who elects to participate in the Deferred Compensation Plan is an
      unsecured creditor of the Trust with respect to any such deferred
      fee.




15


**Compensation
      Report**




The
      full
      Board of Trustees determines the amounts of the annual executive officer,
      Trustee retainer and meeting fees paid to the Executive Officers and Trustees
      of
      the Trust. The Board of Trustees annual review includes a review of the
      performance of the Trust and the contributions of each executive officer and
      the
      Trustees to the business of the Trust.




In
      its
      review and evaluation during the 2006 fiscal year of the annual retainer fee
      paid to Mr. Hekemian, the Trust’s Chairman of the Board and Chief Executive
      Officer, the Board of Trustees undertook a throrough analysis of compensation
      paid to the chief executive officers of various real estate investment trusts
      of
      different types, market capitalizations, management and governance systems
      as
      well as the duties and responsibilities of such chief executive officers and
      decided to increase Mr. Hekemian’s annual executive officer fee by $55,000 to
      $205,000.




During
      the 2006 fiscal year, the Board of Trustees also reviewed the annual executive
      officer fee payable to Mr. Barney, in his capacity as President, Treasurer
      and
      Chief Financial Officer of the Trust. Following its review, the Board of
      Trustees decided to increase Mr. Barney’s annual executive officer fee by
      $20,000 to $50,000 for the 2006 fiscal year.




Board
                of Trustees:Robert
                S. Hekemian
            Alan
                L. AufzienChairman
                of the BoardDonald
                W. Barney
            Ronald
                J. ArtinianHerbert
                C. Klein, Esq.


**Corporate
      Governance**




The
      Trust
      has a Code of Conduct which is applicable to all Trustees, officers and
      management employees of the Trust, including, without limitation, the Trust’s
      principal executive and senior financial officers. The Audit Committee is
      charged with administering and interpreting the Code of Conduct. Copies of
      the
      Code of Conduct will be furnished without charge upon written request received
      from any holder of record or beneficial owner of Shares of the Trust. Request
      should be directed to Shareholder Relations, First Real Estate Investment Trust
      of New Jersey, 505 Main Street, P.O. Box 667, Hackensack, New Jersey
      07602.






16




**Performance
        Graph**
  The
        graph
        below compares the cumulative total return on the Shares for the period covering
        the five (5) fiscal years ended October 31, 2006 with the performance of
        the
        Russell 2000 Index and the NAREIT Equity REIT Index. The graph assumes that
        $100
        was invested on October 31, 2001 in the Trust’s Shares, the Russell 2000 Index,
        and the NAREIT Equity REIT Index, and that all dividends were reinvested.
        The
        closing price used in the analysis for the performance graph below is $23.50
        per
        share.







**Cumulative
                  Total Return****10/31/01**
              **10/31/02**
              **10/31/03**
              **10/31/04**
              **10/31/05**
              **10/31/06**FIRST
                  REAL ESTATE INVESTMENT TRUST
              100.00
              160.55
              228.34
              327.48
              486.45
              372.09RUSSELL
                  2000
              
              100.00
              88.43
              126.78
              141.65
              158.76
              190.48NAREIT
                  EQUITY
              
              100.00
              106.37
              142.46
              185.10
              218.33
              297.72
 
   17
  **Certain
        Relationships and Related Party Transactions**
  Robert
        S.
        Hekemian, Chairman of the Board and Chief Executive Officer of the Trust,
        and
        his sons, Robert S. Hekemian, Jr., Bryan S. Hekemian and David B. Hekemian,
        are
        the sole shareholders of Hekemian and Co. Robert S. Hekemian holds a 0.2%
        interest in Hekemian & Co. The balance of the interests in Hekemian &
Co. are held by Robert Hekemian, Jr., Bryan Hekemian and David Hekemian.
        Robert
        S. Hekemian is currently the Chairman of the Board of Hekemian & Co. Each of
        Robert S. Hekemian’s sons and his brother-in-law are also officers of Hekemian
& Co. and serve in the positions set forth opposite their
        names.
  Robert
        S.
        Hekemian, Jr. (son) - President
  Bryan
        S.
        Hekemian (son) - Vice President and Secretary
  David
        B.
        Hekemian (son) - Vice President and Treasurer
  Serge
        Krikorian (brother-in-law) - Vice President-Insurance Department
  On
        April
        10, 2002, the Trust and Hekemian & Co. entered into a new Management
        Agreement, effective as of November 1, 2001, replacing the Management Agreement
        dated December 20, 1961, as extended. The initial term of the new Management
        Agreement ran from October 1, 2001 to October 31, 2003. The term of the
        Management Agreement automatically renewed on October 31, 2003 for another
        two
        (2) year period through October 31, 2005 and automatically renewed on October
        31, 2005 for another two (2) year period. The Trust may terminate the Management
        Agreement (i) without cause upon one (1) year’s prior written notice, (ii) for
        cause if Hekemian & Co. has not cured an event of default within thirty (30)
        days of receipt of notice of termination from the Trust, or (iii) in the
        event
        of an acquisition of the Trust where the Trust ceases to effectively exist
        as an
        operating entity. The Management Agreement provides for a termination fee
        in the
        event of a termination by the Trust without cause or following an acquisition
        of
        the Trust.
  Under
        the
        Management Agreement, Hekemian & Co. serves as Managing Agent for the Trust
        and the Trust’s properties which the Trust owned on November 1, 2001. The Trust
        may retain Hekemian & Co. or other managing agents to manage its properties
        acquired after November 1, 2001 and to perform various other duties such
        as
        sales, acquisitions, and development with respect to any or all of the Trust’s
        properties. However, Hekemian & Co. currently manages all properties, except
        for the Rotunda. Hekemian & Co. is not the exclusive advisor for the Trust
        to locate and recommend to the Trust investments deemed suitable for the
        Trust,
        and it is not required to offer potential acquisition properties exclusively
        to
        the Trust before acquiring those properties for Hekemian & Co.’s own account
        or for others, including shareholders and employees of Hekemian &
Co.
  The
        Trust
        retained Hekemian & Co. to manage the Preakness Shopping Center which was
        acquired on November 1, 2002 by WaynePSC, an affiliate of the Trust, and
        the
        Damascus Shopping Center which was acquired on July 31, 2003 by Damascus
        Centre,
        LLC, a limited liability company in which the Trust owns a seventy percent
        (70%)
        equity interest. In fiscal 2004, the Trust retained Hekemian & Co. to manage
        The Pierre Towers, an apartment complex acquired on April 15, 2004 by S And
        A
        Commercial Limited Partnership (“S&A”), a limited partnership in which the
        Trust owns a sixty-five percent (65%) equity interest. In fiscal
        2005,
   18
  although
        the Trust did not retain Hekemian & Co. to manage the Rotunda, a mixed use
        (office/retail) property in Baltimore, Maryland, which was acquired in July
        2005
        by Grande Rotunda, LLC (“Grande Rotunda”), a limited liability company in which
        the Trust owns a sixty percent (60%) equity interest, the Trust did retain
        Hekemian & Co. to provide supervisory and management services.
  Pursuant
        to the terms of the Management Agreement, the Trust pays Hekemian & Co.
        certain basic management fees, mortgage fees, administrative fees, other
        miscellaneous fees and leasing commissions as compensation for its services.
        The
        Management Agreement includes a detailed schedule of such fees and commissions
        for those services which the Managing Agent may be called upon to perform.
        During the fiscal year ended October 31, 2006, the Trust paid or accrued
        to
        Hekemian & Co. management fees in the approximate aggregate amount of
        $1,577,000, which includes the management fees with respect to Damascus Centre,
        LLC, Westwood Hills, WaynePSC and S&A described in more detail below. In
        addition, the Trust paid or accrued to Hekemian & Co. development and
        construction fees in connection with The Boulders at Rockaway, New Jersey,
        in
        the approximate aggregate amount of $532,600 **** and
        leasing fees in the approximate aggregate amount of $190,000.
  From
        time
        to time, the Trust engages Hekemian & Co. to provide certain additional
        services, such as consulting services related to development and financing
        activities of the Trust. Separate fee arrangements are negotiated between
        the
        Trust and Hekemian & Co. with respect to such services. The Trust also
        reimburses Hekemian & Co. for the salaries, payroll taxes, insurance costs
        and certain other costs of personnel employed at the Trust’s properties by
        Hekemian & Co. on behalf of the Trust.
  The
        Trust’s investments in real estate may be in the form of wholly owned fee
        interests or, if the circumstances warrant, joint venture interests. From
        time
        to time, in order to diversify risk, rather than acquire wholly owned fee
        interests in real estate, the Trust will invest in a joint venture with other
        parties and the joint venture will acquire the real estate. The Trust has
        invested in joint ventures with employees and affiliates of Hekemian & Co.
        and Trustees of the Trust. To the extent that the Trust invests in real estate
        requiring development and potentially more risk in order to reach its investment
        objectives, it may make such investments on a joint venture basis in order
        to
        diversify risk.
  The
        Trust
        owns a sixty percent (60%) equity interest in and is the managing member
        of
        Grande Rotunda. Rotunda 100, LLC, a New Jersey limited liability company
        owns a
        forty percent (40%) interest in Grande Rotunda. Members of the immediate
        family
        of Robert S. Hekemian and other employees of Hekemian & Co. have majority
        managing control in Rotunda 100, LLC. In July 2005, Grande Rotunda completed
        the
        acquisition of The Rotunda, a mixed-use (office/retail) property in Baltimore,
        Maryland. The purchase price of this property was approximately $31 million
        (inclusive of transaction costs), which was financed in part from an acquisition
        loan in the amount of $22.5 million, and the balance in cash contributed
        by the
        members of Grande Rotunda in proportion to their membership interests. As
        an
        incentive to the employees of Hekemian & Co. to identify and provide real
        estate investment opportunities for the Trust, the Trust agreed to advance
        to
        the employees of Hekemian & Co., who are members of Rotunda 100, LLC
        (including certain members of the immediate family of Robert S. Hekemian),
        fifty
        percent (50%) of the amount of the equity capital required to be contributed
        by
        them to Rotunda 100, LLC in connection with the acquisition of Grande Rotunda.
        During the fiscal year ended October 31, 2005, the Trust loaned an aggregate
        amount of $1.7 million to those
   19
  Hekemian
        & Co. employees (including $1.5 million to certain members of the immediate
        family of Robert S. Hekemian) with respect to their equity capital
        contributions. These loans bear a floating rate of interest of LIBOR (London
        Inter-Bank Offer Rate) plus 225 basis points adjusted quarterly and are secured
        by such employees’ membership interests in Rotunda 100, LLC. **** During
        the fiscal year ended October 31, 2006, accrued and unpaid interest under
        the
        notes aggregated approximately $118,000.
  The
        Trust
        owns a seventy percent (70%) membership interest in Damascus Centre, LLC
        which
        is the owner of the Damascus Shopping Center in Damascus, Maryland. During
        fiscal 2005, the Trust’s Board, in order to incentivize employees of Hekemian
& Co., authorized an investor group, comprised principally of Hekemian
        employees (including certain members of the immediate family of Robert S.
        Hekemian) (“Hekemian Group”), to acquire a thirty percent (30%) equity interest
        in Damascus Centre, LLC. The sale of equity to the Hekemian Group was completed
        on October 31, 2006, at a sales price of $3,224,000, of which the Trust financed
        approximately $1,451,000. The Trust agreed to advance to the Hekemian Group
        up
        to fifty percent (50%) of the amount of the equity purchase price required
        to be
        paid by them (including $1.3 million to certain members of the immediate
        family
        of Robert S. Hekemian). These advances were in the form of secured loans
        that
        bear interest that floats at 225 basis points over LIBOR, in effect from
        time-to-time. During the fiscal year ended October 31, 2006, Damascus Centre,
        LLC paid Hekemian & Co. $55,000 in management fees, which is included in the
        $1,577,000 mentioned above.
  The
        Trust
        owns a forty percent (40%) membership interest in Westwood Hills, LLC (“Westwood
        Hills”) which is the owner of a 210 unit residential apartment complex in
        Westwood, New Jersey. In addition, certain Trustees (Robert S. Hekemian,
        Donald
        W. Barney, Herbert C. Klein, Esq. and Ronald J. Artinian) and members of
        the
        immediate families of certain Trustees (Robert S. Hekemian and Herbert C.
        Klein,
        Esq.) beneficially own thirty-five percent (35%) of the membership interests
        in
        Westwood Hills. Pursuant to the terms of an operating agreement, the Trust
        is
        the Managing Member of Westwood Hills. Hekemian & Co. currently serves as
        the Managing Agent for Westwood Hills. During the fiscal year ended October
        31,
        2006, Westwood Hills paid Hekemian & Co. $168,000 **** in
        management fees, which is included in the $1,577,000 mentioned
        above.
  The
        Trust
        owns a forty percent (40%) equity interest in WaynePSC, LLC, a New Jersey
        limited liability company (“WaynePSC”). H-TPKE, LLC, a New Jersey limited
        liability company, acquired a sixty percent (60%) equity interest in WaynePSC.
        Members of the immediate family of Robert S. Hekemian who are also officers
        of
        Hekemian & Co. and other employees of Hekemian & Co. control
        approximately seventy-three (73%) of the membership interests in H-TPKE,
        LLC.
        The Trust is the Managing Member of WaynePSC. WaynePSC owns a 323,000 +/-
        sq.
        ft. community shopping center located in Wayne, New Jersey, known as the
        Preakness Shopping Center. Hekemian & Co. is the Managing Agent for the
        Preakness Shopping Center. During the fiscal year ended October 31, 2006,
        WaynePSC paid Hekemian & Co. an annual property management fee in the
        approximate amount of $228,000, which is included in the $1,577,000 mentioned
        above, and leasing fees in the amount of $32,000.
  The
        Trust
        owns a sixty-five percent (65%) equity interest in and is the managing and
        general partner of S&A. The remaining thirty-five percent (35%) of equity
        interests in S&A are owned by members of the immediate family of Robert S.
        Hekemian, who are also officers of Hekemian & Co. and by other employees of
        Hekemian & Co. and/or affiliates of Hekemian &
   20
  Co.
        The
        Trust, in accordance with its investment policy, allowed the minority owners
        of
        S&A to make a cash contribution to S&A of approximately $1.3 million
        that increased their ownership interest in S&A from approximately
        twenty-five percent (25%) to thirty-five percent (35%). This additional
        investment, which approximates market value, was made in February 2005. On
        April
        15, 2004, S&A purchased The Pierre Towers, a residential apartment complex
        located in Hackensack, New Jersey. During the fiscal year ended October 31,
        2006, Pierre Towers, LLC on behalf of S&A paid Hekemian management fees in
        the amount of $291,000, which is included in the $1,577,000 mentioned above.
  The
        law
        firm of Nowell Amoroso Klein Bierman, P.A. was retained by the Trust during
        fiscal 2006 to furnish legal services and received $18,000 **** in
        legal
        fees from the Trust for its services. Mr. Klein, a Trustee, is a partner
        in the
        law firm.
  The
        law
        firm of Giordano, Halleran & Ciesla, P.C. was retained by the Trust during
        fiscal 2006 to furnish legal services. Mr. Aiello, an Executive Officer of
        the
        Trust, is an officer and shareholder in the law firm. During fiscal 2006,
        Giordano, Halleran & Ciesla, P.C. received $47,600 in fees from the Trust
        for its services. In addition, Mr. Aiello paid to the law firm the amount
        of
        $41,200, representing retainer and meeting fees which Mr. Aiello received
        in
        connection with his services as Secretary and Executive Secretary of the
        Trust
        during fiscal 2006.
   21
  **APPROVAL
        OF THE AMENDMENTS TO THE**
 **EQUITY
        INCENTIVE PLAN**
  On
        February 15, 2007, the Board of Trustees approved, subject to shareholder
        approval, (i) an amendment to the Trust’s Equity Incentive Plan to increase the
        number of Shares of the Trust currently reserved for issuance thereunder
        from
        408,500 (as adjusted to account for the October 2001 and March 2004 share
        splits
        and prior option exercises) to 708,500 Shares, an increase of 300,000 Shares;
        and (ii) an amendment to the Trust’s Equity Incentive Plan to extend the term of
        the Equity Incentive Plan, which will expire on September 10, 2008, until
        September 10, 2018. The Trust is seeking Shareholder approval of the amendments
        to the Equity Incentive Plan as directed by the Board of Trustees.
  The
        Trust’s Board approved the Equity Incentive Plan at its meeting on September 10,
        1998, subject to approval by the Trust’s Shareholders. The Shareholders of the
        Trust approved the Equity Incentive Plan at their annual meeting on April
        7,
        1999, and the Equity Incentive Plan became effective as of that date. The
        general nature and purpose of the Equity Incentive Plan is to enhance the
        ability of the Trust to attract and retain the services of employees and
        other
        persons who have made or are expected to make significant contributions to
        the
        business of the Trust and its subsidiaries by providing such persons with
        an
        opportunity to acquire Shares of the Trust, or receive other stock-based
        awards.
  The
        Equity Incentive Plan originally provided that 230,000 Shares would be reserved
        for issuance thereunder. After giving effect to the October 2001 and March
        2004
        shares splits and taking into account prior option exercises, 408,500 Shares
        remain reserved for issuance under the Equity Incentive Plan. As of February
        19,
        2007, options to purchase 242,500 Shares are outstanding under the Equity
        Incentive Plan, including options granted to the Executive Officers and Trustees
        of the Trust, with only 166,000 Shares remaining available for stock options
        and
        other stock-based awards to be granted thereunder. The Trust currently has
        no
        other stock option plans that have Shares available for the grant of stock
        options and other stock-based awards to officers, employees and trustees.
        The
        Board considers an increase in the number of Shares available for stock options
        and other stock-based awards to be granted under the Equity Incentive Plan
        and
        the extension of the term of the Equity Incentive Plan as necessary to fulfill
        the purposes that the Trust seeks to achieve with the Equity Incentive Plan.
        The
        Shareholders will be asked at the annual meeting to adopt and approve the
        amendment to increase the number of Shares of the Trust reserved for issuance
        under the Equity Incentive Plan and the amendment to extend the term of the
        Equity Incentive Plan. The Board of Directors approval for the amendment
        to the
        Equity Incentive Plan to extend the term thereof until September 10, 2018
        is
        conditioned on the approval by the Shareholders to increase the number of
        Shares
        of the Trust reserved for issuance thereunder.
  The
        Board
        of Trustees administers the Equity Incentive Plan and may grant options under
        the Equity Incentive Plan in 2007 to eligible participants, which include the
        Trust’s Executive Officers and members of the Board. No determinations have been
        made by the Board with respect to the granting of options in 2007.
  
   22
  **SUMMARY
        OF MATERIAL PROVISIONS OF THE EQUITY INCENTIVE PLAN**
  Set
        forth
        below is a discussion of the material terms of the Equity Incentive Plan.
        Such
        discussion is qualified by reference to the full text of the Equity Incentive
        Plan which is attached hereto as Appendix
        A .
        The
        Trust will also furnish without charge a copy of the Equity Incentive Plan
        to
        any Shareholder of the Trust upon receipt of a request for a copy of the
        Equity
        Incentive Plan. Requests may be directed to the Trust’s Secretary at 505 Main
        Street, P.O. Box 667, Hackensack, New Jersey 07602.
  ***Administration.*** The
        Equity Incentive Plan is administered by the Board of Trustees. When the
        Board
        of Trustees deems it to be appropriate, it will take into account the
        suggestions and recommendations of the Executive Committee. The Board of
        Trustees has complete authorization to make all determinations necessary
        or
        advisable for the administration of the Equity Incentive Plan, including
        who
        will participate, the granting of awards and the number and type of awards,
        as
        well as the terms, conditions and limitations applicable to the
        awards.
  ***Term
        of Plan.*** Unless
        otherwise amended, the Equity Incentive Plan will terminate on September
        10,
        2008. While no award will be granted under the Equity Incentive Plan following
        its termination, any award outstanding at the time of termination of the
        Equity
        Incentive Plan will continue to exist pursuant to its terms.
  ***Eligibility.*** The
        Board
        of Trustees may grant awards under the Equity Incentive Plan to members of
        the
        Board of Trustees, the Executive Officers of the Trust, and such other persons
        or entities, including consultants and employees of consultants, who, in
        the
        opinion of the Board of Trustees, have made or are in a position to make
        a
        significant contribution to the success of the Trust (each a
“Participant”).
  ***Awards
        under the Equity Incentive Plan.*** The
        types
        of awards which can be issued to Participants under the Equity Incentive
        Plan
        include options (“Options”), restricted share awards (“Restricted Share
        Awards”), and other share based awards (“Other Share Based
        Awards”).
  (i)  Options .
        An
        Option granted to a Participant means a nonqualified option which shall not
        qualify as an incentive stock option under Section 422 of the Internal Revenue
        Code of 1986, as amended (the “Code”). Options granted provide the optionee with
        the opportunity to acquire Shares upon the exercise of the Options and the
        payment of the exercise price to the Trust. An Option shall have an exercise
        price equal to the fair market value of the Shares on the date of the grant
        of
        the Option. For purposes of the Equity Incentive Plan, “fair market value” is
        defined as the arithmetic mean of the highest and lowest selling prices of
        the
        Shares quoted on the OTC Bulletin Board Service provided by the NASD or as
        reported by a nationally recognized broker/dealer which makes a market in
        the
        Shares. If there are no sales of Shares on the grant date but there were
        sales
        on a date within a reasonable period before such date, fair market value
        is
        determined by taking the mean between the highest and lowest selling prices
        of
        the Shares on the nearest date before the grant date. If actual sales are
        not
        available during a reasonable period before the grant date, the fair market
        value may be determined by taking the mean between the *bona
        fide* closing
        bid and asked prices for the Shares on the grant date, or if such information
        is
        not available on such date, the mean between the *bona
        fide* closing
        bid and asked prices for the Shares which are available for the nearest date
        before the grant date, if such date is within a reasonable period of the
        grant
        date. In the event that the Board of Trustees determines that the fair market
        value of the Shares cannot be determined on the basis of
   23
  selling
        prices or bid and asked prices pursuant to any of the methods set forth above,
        then the best estimate of the fair market value of the Shares shall be
        established by the Board of Trustees acting in good faith and using all
        available financial data and other relevant factors affecting the fair market
        value of the Shares.
  (ii)  Restricted
        Share Awards .
        A
        Restricted Share Award provides a Participant with an opportunity to acquire
        Shares subject to certain restrictions, conditions and forfeiture provisions
        as
        the Board of Trustees may determine, including, without limitation, restrictions
        on transfer and conditions based on continuous service with the Trust,
        achievement of business objectives, and individual and Trust performance.
        Subject to the conditions specified by the Board of Trustees, a Participant
        receiving a Restricted Share Award has all the rights of a Shareholder of
        the
        Trust with respect to the Shares, including the right to vote the Shares
        and the
        right to receive any dividends thereon. The consideration, if any, required
        to
        be paid by the Participant in exchange for Restricted Share Awards shall
        be
        determined by the Board of Trustees, but in no event shall any required
        consideration be greater than the fair market value of the Shares on the
        date of
        grant of the award.
  (iii)  Other
        Share Based Awards .
        Other
        Share Based Awards may include the grant and issuance of Shares as bonuses
        or in
        lieu of cash compensation. The consideration, if any, required to be paid
        by the
        Participant in exchange for Other Share Based Awards shall be determined
        by the
        Board of Trustees, but in no event shall any required consideration be greater
        than the fair market value of the Shares on the date of grant of the
        award.
  (iv)  Trustees’
        Fees .
        A
        Trustee may request to receive payment of all or a portion of the Trustee’s
        annual retainer fee and meeting fees in the form of Shares; provided, that
        such
        request must be approved by the Board of Trustees.
  ***Other
        Information.*** The
        maximum number of Shares which may be awarded to any Participant pursuant
        to all
        awards granted to such Participant under the Equity Incentive Plan shall
        not
        exceed thirty percent (30%) of the number of Shares reserved for issuance.
        The
        maximum number of Shares awarded to any Participant pursuant to Restricted
        Share
        Awards and Other Share Based Awards shall not exceed ten percent (10%) of
        the
        number of Shares reserved for issuance under the Equity Incentive Plan. There
        shall be no limit on the number of Shares that a Trustee may acquire in lieu
        of
        Trustees’ fees. The exercise price of an Option or the consideration for any
        other award shall be paid in cash; provided, that the Board of Trustees may
        allow, in its sole discretion, payment through the delivery of Shares owned
        by
        the grantee.
  In
        the
        event there is any change in the Shares of the Trust through a split or
        combination of the Shares, or by reason of a merger, consolidation or
        reorganization of the Trust, including a change in the Trust’s form of business
        entity, or if there is a Share dividend, outstanding awards granted under
        the
        Equity Incentive Plan shall apply to the securities of the Trust or any other
        entity to which a holder of the number of Shares of the Trust subject to
        awards
        would have been entitled by reason of any such action or transaction.
        Outstanding awards shall also be amended as to price and other terms if
        necessary to reflect the foregoing events, and the Board of Trustees, in
        its
        discretion, may make other adjustments to such awards and their terms and
        conditions which the Board of Trustees deems necessary to protect such awards
        from dilution or diminution in value. In the event of a cash dividend, there
        shall be no adjustment to an award or its terms, unless such cash dividend
        is
        attributable to the sale by the Trust of a property or properties or to a
        refinancing by the Trust, in which case the Board of Trustees, in its
        discretion, may amend an
   24
  award
        and
        its terms and conditions in order to protect such award from dilution or
        diminution in value.
  In
        the
        event of (i) a “change in control” (as such term is defined in the Equity
        Incentive Plan), or (ii) a sale of all or substantially all of the Trust’s
        assets (other than a sale of assets to a subsidiary or other affiliated entity
        of the Trust), all outstanding Options shall become exercisable (to the extent
        not already exercisable) immediately before or contemporaneously with the
        occurrence of the change in control or sale of all or substantially all of
        the
        Trust’s assets, and each outstanding Restricted Share Award shall immediately
        become free of all restrictions, conditions and forfeiture
        provisions.
  In
        the
        event of the dissolution or liquidation of the Trust, all outstanding Options
        shall terminate as of the date fixed by the Board of Trustees; provided,
        however, that not less than thirty (30) days written notice of the date so
        fixed
        shall be given to each Participant who shall have the right during such period
        to exercise the Option as to all or any part of the Shares covered by the
        Option. Each outstanding Restricted Share Award shall immediately become
        free of
        all restrictions, conditions and forfeiture provisions.
  ***Certain
        Federal Income Tax Consequences of the Equity Incentive Plan.*** The
        following description of certain federal income tax consequences of the Equity
        Incentive Plan is based upon current statutes, regulations and interpretations
        and does not include state or local income tax consequences applicable to
        a
        person who receives an award under the Equity Incentive Plan.
  The
        grant
        of an Option generally will not result in income for the Participant or in
        a
        deduction for the Trust. The exercise of an Option will result in ordinary
        income for the Participant and a business deduction for the Trust measured
        by
        the difference between the fair market value of the Shares received at the
        time
        of exercise and the Option’s exercise price. The Trust will have the right to
        deduct from any cash payment under the Equity Incentive Plan taxes that are
        required to be withheld and to condition the obligation to deliver or vest
        Shares under the Equity Incentive Plan upon the Participant paying the Trust
        such amount as the Trust may request to satisfy any liability for applicable
        withholding taxes.
  If
        the
        Shares issued pursuant to a Restricted Share Award are subject to restrictions
        resulting in a “substantial risk of forfeiture” pursuant to the meaning of such
        term under Section 83 of the Code, the grant of the Restricted Share Award
        will
        not result in income to the Participant or in a business deduction for the
        Trust. If there are no such restrictions, conditions, limitations or forfeiture
        provisions, the Participant will recognize ordinary income and the Trust
        will be
        entitled to a business deduction upon receipt of the Shares. Dividends paid
        to
        the Participant while the Shares remain subject to any restrictions will
        be
        treated as ordinary income. At the time the restrictions lapse, the Participant
        will recognize ordinary income and the Trust will be entitled to a business
        deduction measured by the fair market value of the Shares at the time of
        lapse
        less the amount of consideration, if any, paid by the Participant for the
        Restricted Share Award.
  As
        to the
        Other Share Based Awards, any Participant who receives Shares as bonus
        compensation or in lieu of cash compensation shall recognize ordinary income
        and
        the Trust will be entitled to a business deduction, measured by the fair
        market
        value of the Shares issued to the Participant.
   25
  The
        Trust
        believes that compensation income recognized by any of its Executive Officers
        pursuant to the Equity Incentive Plan will qualify as performance-based
        compensation and, for purposes of deduction by the Trust, will be exempt
        from
        the $1 million deduction limit imposed by Section 162(m) of the
        Code.
  The
        Equity Incentive Plan is not a qualified plan under Section 401(a) of the
        Code.
  ***Plan
        Benefits.*** The
        following table sets forth information as of February 19, 2007 regarding
        the
        total number of Shares underlying options granted pursuant to the Equity
        Incentive Plan to the persons and groups of persons identified in this table.
        The information presented in the table has been adjusted to give effect to
        the
        October 2001 and March 2004 share splits.
  **Name
                  and Position**
              
              **Total
                  Number of Shares**
                **Underlying**
                **Options
                  Granted**Robert
                  S. Hekemian
                Chairman
                  of the Board, Chief Executive Officer and Trustee
              
              
              112,000Donald
                  W. Barney
                President,
                  Treasurer, Chief Financial Officer and Trustee
              
              
              112,000Herbert
                  C. Klein, Esq.
                Trustee
              
              
              112,000
              (1)Ronald
                  J. Artinian
                Trustee
              
              
              72,000
              (1)Alan
                  L. Aufzien
                TrusteeTrustee
              
              
              26,000John
                  A. Aiello
                Secretary
                  and Executive Secretary
              
              
              0Executive
                  Officer Group
              
              
              224,000Non-Executive
                  Officer Trustee Group
              
              
              210,000Non-Executive
                  Officer and Non-Trustee Group
              
              
              320,000
              (2)**TOTAL**
              
              
              **754,000**__________________
 (1)
              Includes
                  Shares issued as a result of the March 2004 share split in respect
                  of
                  Shares acquired upon the exercise of options by the holder
                  thereof.
  (2)
              Represents
                  options granted to employees of Hekemian & Co., all of whom have
                  provided services to the Trust.
   26
  ***Vote
        Required.*** Each
        amendment of the Equity Incentive Plan requires the affirmative vote, in
        person
        or by proxy, of a majority of the Shares present and entitled to vote at
        the
        annual meeting.
   INASMUCH
        AS EACH OF THE TRUSTEES HAS BEEN AND MAY BE GRANTED OPTIONS UNDER THE EQUITY
        INCENTIVE PLAN, THE BOARD OF TRUSTEES WILL NOT MAKE ANY RECOMMENDATION TO
        THE
        TRUST’S SHAREHOLDERS REGARDING THEIR APPROVAL OF THE ADOPTION OF THE AMENDMENTS
        TO THE EQUITY INCENTIVE PLAN.
   27
  **OTHER
        MATTERS**
  The
        Board
        of Trustees does not know of any other business which will be presented for
        consideration at the Annual Meeting. Except as the Board of Trustees may
        otherwise permit, only the business set forth and discussed in the Notice
        of
        Meeting and this Proxy Statement may be acted on at the Annual Meeting. If
        any
        other business incident to the Annual Meeting is properly presented at the
        Annual Meeting, or any adjournment thereof, the proxy holders will vote in
        regard thereto according to their discretion insofar as such proxies are
        not
        limited to the contrary.
  **RELATIONSHIP
        WITH INDEPENDENT AUDITORS**
  The
        Audit
        Committee makes selection of the Independent Auditors for the Trust. Effective
        September 13, 2006, the Trust changed independent registered public accounting
        firms from J.H. Cohn, LLP to Eisner LLP for the current fiscal year. . All
        audit
        and non-audit services provided by the Trust’s independent registered public
        accounting firm are pre-approved by the Audit Committee which gives due
        consideration to the potential impact of non-audit services on auditor
        independence. None of the engagements of J.H. Cohn, LLP and Eisner LLP,
        respectively, which were pre-approved by the Audit Committee, made use of
        the de
        minimis exception for pre-approval contained in the rules of the SEC which
        permit limited engagements for non-audit services involving amounts under
        a
        specified threshold.
  In
        accord
        with Independent Standard Board Standards No. 1 (Independence Discussion
        with
        Audit Committees) the Trust received a letter and verbal communication from
        Eisner LLP that it knows of no state of facts which would impair its status
        as
        the Trust’s Independent Auditors. The Audit Committee has considered whether the
        non-audit services provided by Eisner LLP are compatible with maintaining
        its
        independence and has determined that the nature and substance of any such
        limited non-audit services have not impaired Eisner LLP’s status as the Trust’s
        Independent Auditors.
  **Audit
        Fees**
  J.H.
        Cohn, LLP billed the Trust a total of $253,700 during fiscal 2006 and a total
        of
        $80,878 **** during
        fiscal 2005 for professional services rendered in connection with audit services
        rendered to the Trust. Eisner LLP billed the Trust a total of $130,000 during
        fiscal 2006 for professional services rendered in connection with audit services
        rendered to the Trust.
  **Audit-Related
        Fees**
  Neither
        J.H. Cohn, LLP nor Eisner LLP billed the Trust for any audit related services
        during fiscal 2006 or fiscal 2005.
  **Tax
        Fees**
  J.H.
        Cohn, LLP did not bill the Trust for tax return preparation during fiscal
        2006
        but did bill the Trust $9,003 **** for
        tax
        return preparation during fiscal 2005. Eisner LLP did not bill the Trust
        for any
        tax return preparation in 2006 or 2005.
   28
  **All
        Other Fees**
  Neither
        J.H. Cohn, LLP nor Eisner LLP billed the Trust for any other services during
        fiscal 2006 or fiscal 2005.
  **Presence
        at Annual Meeting**
  Representatives
        of Eisner LLP will be present at the Annual Meeting and will have an opportunity
        to make a statement if the representatives desire to do so and will be available
        to respond to appropriate questions.
  **ANNUAL
        REPORT**
  The
        Annual Report to Shareholders (the “Annual Report”) for the fiscal year ended
        October 31, 2006 accompanies this Proxy Statement. The Trust’s Annual Report on
        Form 10-K for the fiscal year ended October 31, 2006 which the Trust has
        filed
        with the SEC, excluding exhibits, is included in the Annual Report. Eisner
        LLP
        has audited the financial statements of the Trust for the fiscal year ended
        October 31, 2006, which financial statements are contained in the Annual
        Report.
        Such Annual Report, including the audited financial statements contained
        therein, is not incorporated in this Proxy Statement and is not deemed to
        be
        part of the proxy soliciting material.
  **COMPLIANCE
        WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT**
  Section
        16(a) of the Exchange Act requires the Trust’s Executive Officers and Trustees,
        and persons who own more than ten percent (10%) of the Shares, to file reports
        of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC.
        Executive Officers, Trustees and greater than ten percent (10%) Shareholders
        are
        required by SEC regulation to furnish the Trust with copies of all Forms
        3, 4
        and 5 they file.
  Based
        solely on the Trust’s review of the copies of such forms it has received, the
        Trust believes that all of its Trustees, Executive Officers and greater than
        ten
        percent (10%) Shareholders complied with all filing requirements applicable
        to
        them with respect to reports required to be filed by Section 16(a) of the
        Exchange Act during fiscal 2006.
  **Shareholder
        Communications with Trustees**
  The
        Board
        of Trustees has adopted a formal process to be followed by those Shareholders
        who wish to communicate directly with the Board of Trustees or any individual
        Trustee, or group of Trustees of the Trust. A Shareholder can contact the
        Board
        of Trustees or any individual Trustee or group of Trustees, by sending a
        written
        communication to: The Board of Trustees, or any specifically identified
        Trustee(s), First Real Estate Investment Trust of New Jersey, c/o Secretary,
        505
        Main Street, P.O. Box 667, Hackensack, New Jersey 07602. A Shareholder’s letter
        should also indicate that he or she is a Shareholder of the Trust. Any such
        communication received by the Secretary of the Trust will be distributed
        to the
        Board of Trustees, or a member or members thereof, as appropriate depending
        on
        the facts and circumstances described in the communication received. If a
        Shareholder communication is addressed to one or more Trustees, but not the
        entire Board of Trustees, the Secretary of the Trust shall notify any Trustees
        to whom such communication was not addressed that such communication was
        received and shall provide
   29
  a
        copy of
        such communication upon request. Communications which are primarily commercial
        in nature or related to an improper or irrelevant topic will not be forwarded
        to
        the Board of Trustees or any Trustee. If the Secretary of the Trust believes
        that the management of the Trust can adequately handle the Shareholder’s inquiry
        or request, the Secretary will forward such communication to the appropriate
        person(s). At each meeting of the Board of Trustees, a summary of all
        communications received since the last Board of Trustees’ meeting which the
        Secretary elected not to forward to the Board of Trustees or a Trustee(s)
        shall
        be presented, and all such communications shall be made available to the
        Trustees upon request.
  **SHAREHOLDER
        PROPOSALS AND RECOMMENDATIONS**
 **FOR
        NOMINATION OF TRUSTEES**
  Shareholder
        proposals for presentation at the Trust’s 2008 Annual Meeting of Shareholders
        must be received by the Trust at its principal executive offices for inclusion
        in its proxy statement and form of proxy relating to that meeting no later
        than
        October 31, 2007. A Shareholder wishing to submit a proposal should write
        to the
        Trust’s Secretary and include a detailed description of such proposal. The
        Nominating Committee or the Board of Trustees will also consider candidates
        for
        nomination as Trustees who are recommended by one or more Shareholders applying
        the same criteria for nominees described in the section of this Proxy Statement
        entitled “Committees of the Board of Trustees - Nominating Committee.” A
        Shareholder who wishes to suggest a candidate for nomination as a Trustee
        should
        write to the Trust’s Secretary and include the following information: (1) the
        name and contact information for the candidate; (2) a statement of the
        candidate’s business experience and educational background; (3) a detailed
        description describing any relationship between the candidate and the proposing
        Shareholder; (4) a statement by the Shareholder explaining why he or she
        believes that the candidate is qualified to serve on the Board of Trustees
        and
        how his or her service would benefit the Trust and its Shareholders; and
        (5) a
        statement that the candidate is willing to be considered and willing to serve
        as
        a Trustee of the Trust if nominated and elected. A Shareholder wishing to
        suggest to the Nominating Committee a candidate for election at the Trust’s 2008
        Annual Meeting of Shareholders must submit the required information to the
        Trust
        and such information must be received by the Trust no later than October
        31,
        2007.
  THE
        BOARD
        OF TRUSTEES OF THE TRUST RECOMMENDS THAT THE SHAREHOLDERS VOTE IN FAVOR OF
        THE
        NOMINEES, RONALD
        J.
        ARTINIAN AND ALAN L. AUFZIEN , FOR
        THREE (3) YEAR TERMS TO THE BOARD OF TRUSTEES. INASMUCH
        AS EACH OF THE TRUSTEES HAS BEEN AND MAY BE GRANTED OPTIONS UNDER THE EQUITY
        INCENTIVE PLAN, THE BOARD OF TRUSTEES WILL NOT MAKE ANY RECOMMENDATION TO
        THE
        TRUST’S SHAREHOLDERS REGARDING THEIR APPROVAL OF THE ADOPTION OF THE AMENDMENT
        TO THE EQUITY INCENTIVE PLAN .
  THE
        TRUST
        SUBMITS TO THE SECURITIES AND EXCHANGE COMMISSION AN ANNUAL REPORT ON FORM
        10-K.
        COPIES OF THE REPORT WILL BE FURNISHED WITHOUT CHARGE UPON WRITTEN REQUEST
        RECEIVED FROM ANY HOLDER OF RECORD OR BENEFICIAL OWNER OF SHARES OF THE TRUST.
        REQUESTS SHOULD BE DIRECTED TO SHAREHOLDER RELATIONS, FIRST REAL ESTATE
        INVESTMENT TRUST OF NEW JERSEY, 505 MAIN STREET, P.O. BOX 667, HACKENSACK,
        NEW
        JERSEY 07602.
   30
  ALL
        SHAREHOLDERS ARE URGED TO MARK, SIGN, DATE AND SEND THEIR PROXIES WITHOUT
        DELAY
        TO REGISTRAR AND TRANSFER COMPANY, 10 COMMERCE DRIVE, CRANFORD, NEW JERSEY
        07016. PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE
        APPRECIATED.
  
  JOHN
                  A. AIELLOSecretary
 February
        28, 2007
  
   31






**APPENDIX
        A**
  **FIRST
        REAL ESTATE INVESTMENT TRUST**
  **OF
        NEW JERSEY**
  **EQUITY
        INCENTIVE PLAN**
  
  **1.**
              **Name
                  and Purpose of Plan.**
  1.01
              Name.The Name of this Plan is the “First Real Estate Investment Trust of New
                  Jersey Equity Incentive Plan.”
  1.02
              Purpose.The purpose of this First Real Estate Investment Trust of New Jersey
                  Equity Incentive Plan is to advance the interests of First Real
                  Estate
                  Investment Trust of New Jersey (the “Company”) by enhancing the ability of
                  the Company to (i) attract and retain members of its Board of Trustees,
                  executive officers and other persons or entities, including, without
                  limitation, employees, consultants and employees of consultants,
                  who are
                  in a position to make significant contributions to the success
                  of the
                  Company; (ii) reward such persons or entities for such contributions;
                  and
                  (iii) encourage such persons or entities to take into account the
                  long-term interests of the Company.
  **2.**
              **Definitions
                  of Terms.**
  2.01
              General
                  Definitions.The following words and phrases, when used in the Plan, unless
                  otherwise
                  specifically defined or unless the context clearly otherwise requires,
                  shall have the following respective
                  meanings:
  (a)
              “Award”
                  means a grant in the form of (i) nonqualified options to purchase
                  Shares,
                  (ii) Restricted Shares, or (iii) other Share-based
                  awards.
  (b)
              “Award
                  Agreement” means an agreement between the Company and the Participant
                  entered into with respect to Awards granted under the
                  Plan.
  (c)
              “Board”
                  means the Board of Trustees of the
                  Company.
  (d)
              “Code”
                  means the Internal Revenue Code of 1986, as amended, and the rules
                  and
                  regulations promulgated thereunder.
  (e)
              “Change
                  in Control” means (i) thirty percent (30%) or more of the Company’s Shares
                  have been acquired by any “person” (as defined by Section 3(a)(9) of the
                  Securities Exchange Act of 1934) other than directly from the Company;
                  or
                  (ii) a merger, consolidation or reorganization of the Company other
                  than a
                  merger, consolidation or reorganization which would result in the
                  Shares
                  of the Company outstanding immediately prior thereto continuing
                  to
                  represent (either by remaining outstanding or by being converted
                  into
                  shares of the surviving entity) more than seventy percent (70%)
                  of the
                  combined voting power of the Shares of the Company or such surviving
                  entity outstanding immediately after
                  such
   A
            -
            1
  merger,
        consolidation or reorganization; except that a merger, consolidation or
        reorganization effected to implement a recapitalization of the Company (or
        similar transaction) in which no “person” (as hereinabove defined) acquires more
        than thirty percent (30%) of the combined voting power of the Company’s
        outstanding Shares shall not constitute a Change in Control of the Company;
        or
        (iii) thirty percent (30%) or more of the members of the Board who were elected
        by the shareholders are persons who were not nominated or elected at the
        three
        (3) most recent annual meetings of the shareholders of the Company.
  (f)
              “Company”
                  means First Real Estate Investment Trust of New
                  Jersey.
  (g)
              “Fair
                  Market Value” on any date (“valuation date”) is defined as the arithmetic
                  mean of the highest and lowest selling prices of the Shares quoted
                  on the
                  OTC Bulletin Board® Service provided by NASD, Inc., or as reported by a
                  nationally recognized broker/dealer which makes a market in the
                  Shares, or
                  as reported by equivalent exchanges or markets as may heretofore
                  be
                  utilized by the Company, on such valuation date. If there are no
                  sales of
                  Shares on the valuation date but there were sales on a date within
                  a
                  reasonable period before the valuation date, Fair Market Value
                  is
                  determined by taking the mean between the highest and lowest selling
                  prices of the Shares on the nearest date before such valuation
                  date. If
                  actual sales are not available during a reasonable period before
                  the
                  valuation date, the Fair Market Value may be determined by taking
                  the mean
                  between the bona fide closing bid and asked prices for the Shares
                  on the
                  valuation date, or if none exist on such date, the mean between
                  the bona
                  fide closing bid and asked prices for the Shares which are available
                  for
                  the nearest date before valuation date, if such date is within
                  a
                  reasonable period of the valuation date. In the event that the
                  Board
                  determines that the Fair Market Value of the Shares cannot be determined
                  on the basis of selling or bid and asked prices pursuant to any
                  of the
                  methods set forth above, then the best estimate of the Fair Market
                  Value
                  of the Shares shall be established by the Board acting in good
                  faith and
                  using all available financial data and other relevant factors affecting
                  Fair Market Value.
  (h)
              “Just
                  Cause” shall mean: (i) a Participant’s conviction for a felony or for
                  fraud; (ii) a Participant engaging in any conduct, by way of act
                  or
                  omission, which in the opinion of the Board has the potential to
                  cause, or
                  does cause, a material adverse effect on the Company’s business; (iii) a
                  Participant failing to return from authorized leave from the Company;
                  (iv)
                  a Participant being found to be under the influence of, or to have
                  distributed, any illegal narcotic substance while on the Company’s
                  premises, including any property site of the Company; (v) a Participant
                  acting dishonestly or committing theft of Company property; or
                  (vi) the
                  work performance of a Participant failing to meet Company
                  standards.
  (i)
              “Option”
                  means a nonqualified option (which shall not qualify as an incentive
                  stock
                  option under Section 422 of the Code) to purchase
                  Shares.
   A
            -
            2
  (j)
              “Participant”
                  means those eligible to participate under the Plan, including the
                  members
                  of the Board and the executive officers of the Company, and such
                  other
                  persons or entities, including, without limitation, employees,
                  consultants, and employees of consultants, who, in the opinion
                  of the
                  Board, are in a position to make a significant contribution to
                  the success
                  of the Company or any of its Subsidiaries, and who have been selected
                  by
                  the Board to participate under the Plan (each, a “Participant” and
                  collectively, the “Participants”).
  (k)
              “Personal
                  Representative” means the person who manages the affairs of another
                  because of incapacity or death.
  (l)
              “Plan”
                  means First Real Estate Investment Trust of New Jersey Equity Incentive
                  Plan.
  (m)
              “Restricted
                  Shares” means Shares as more specifically defined in Section 5.01(b)
                  herein.
  (n)
              “Retirement”
                  means retirement from service or active employment with the Company
                  at or
                  after age 65. The determination of the Board as to an individual’s
                  Retirement shall be conclusive on all
                  parties.
  (o)
              “Share”
                  designates beneficial interest in the Company, and the Shares represent
                  the only class of equity in the
                  Company.
  (p)
              “Subsidiary”
                  means a present or future corporation, or other business organization,
                  of
                  which the Company owns or controls, or will own or control, more
                  than
                  fifty percent (50%) of the total combined voting power of all classes
                  of
                  stock or other equity interests.
  (q)
              “Trustee”
                  means a member of the Board.
  2.02
              Other
                  Definitions.In
                  addition to the above definitions, certain words and phrases used
                  in the
                  Plan and any Award Agreement entered into in connection with the
                  Plan may
                  be defined in other portions of the Plan or in such Award
                  Agreement.
  **3.**
              **Administration
                  of Plan.**
  3.01
              The
                  Board.The Plan will be administered by the Board, taking into account,
                  where
                  appropriate, the suggestions and recommendations of the Executive
                  Committee of the Board.
   A
            -
            3
  3.02
              Powers
                  of the Board.
  (a)
              The
                  Board will have full and exclusive power to interpret the Plan,
                  to adopt
                  rules, regulations and guidelines relating to the Plan, to grant
                  waivers
                  of Plan restrictions and to make all of the determinations necessary
                  for
                  its administration. Such determinations and actions of the Board,
                  and all
                  other determinations and actions of the Board made or taken under
                  authority granted by any provision of the Plan will be conclusive
                  and
                  binding on all parties.
  (b)
              The
                  Board has the authority, within the limits set forth in the Plan,
                  to (i)
                  determine the persons to whom Awards may be granted, (ii) determine
                  the
                  number of Shares to be covered by each Award, (iii) establish the
                  terms,
                  conditions and provisions of the Award to be granted, and (iv)
                  establish
                  restrictions on the Awards or subsequently waive any Award restriction
                  or
                  permit any Award restriction to
                  lapse.
  3.03
              Effective
                  Date and Term of Plan.
  (a)
              Effective
                  Date.The Plan will become effective on September 10, 1998, subject to
                  the Plan
                  being approved by the Company’s shareholders. Awards under the Plan may be
                  made prior to the approval of the Plan by the Company’s
                  shareholders.
  (b)
              Termination
                  Date.The Plan will terminate on September 10, 2008, subject to earlier
                  termination of the Plan by the Board pursuant to Section 10 herein.
                  No
                  Award may be granted under the Plan after the termination date
                  of the
                  Plan, but Awards previously granted may continue and remain outstanding
                  beyond that date pursuant to the terms of such
                  Awards.
  **4.**
              **Shares
                  Subject to the Plan.**
  4.01
              Shares
                  Subject to Plan.Subject to adjustment as provided in Section 8 herein, the aggregate
                  number of Shares reserved for issuance under the Plan shall be
                  230,000.
  4.02
              Limit
                  Upon Number of Shares Awarded.The maximum number of Shares awarded to any Participant pursuant
                  to all
                  Awards granted to such Participant under the Plan shall not exceed
                  thirty
                  percent (30%) of the number of Shares reserved for issuance hereunder.
                  The
                  maximum number of Shares awarded to any Participant pursuant to
                  Restricted
                  Shares and other Share-based awards shall not exceed ten percent
                  (10%) of
                  the number of Shares reserved for issuance hereunder. There shall
                  be no
                  limit on the number of Shares a Trustee may acquire in lieu of
                  Board fees
                  as provided for in Section 11 of this
                  Plan.
   A
            -
            4
  **5.**
              **Granting
                  of Awards.**
  5.01
              Form
                  of Award.
  (a)
              Options.The principal form of Award granted under the Plan shall be Options
                  pursuant to which the Participant would receive Shares upon the
                  exercise
                  thereof.
  (b)
              Restricted
                  Shares.The Board shall have the right to grant “Restricted Shares” which shall be
                  Shares issued subject to certain restrictions, conditions and forfeiture
                  provisions as the Board may determine, including, but not limited
                  to,
                  restrictions on transfer and conditions based on continuous service
                  with
                  the Company or any of its Subsidiaries, achievement of business
                  objectives, and individual and Company performance. Subject to
                  such
                  restrictions, conditions and forfeiture provisions as may be established
                  by the Board, any Participant receiving Restricted Shares will
                  have all
                  the rights of a shareholder of the Company with respect to the
                  Shares,
                  including the right to vote the Shares and the right to receive
                  any
                  dividends thereon.
  (c)
              Other
                  Share-based Awards.The Board shall have the right to grant other Share-based awards
                  to
                  Participants under the Plan, including the grant and issuance of
                  Shares as
                  bonuses or in lieu of cash
                  compensation.
  5.02
              Term
                  of Award.The term of any Award shall be determined by the Board; provided,
                  that the
                  maximum term shall be no longer than ten (10) years from the date
                  of grant
                  of the Award. Shares subject to Options and other Awards granted
                  under the
                  Plan which expire, terminate or are cancelled without having been
                  exercised in full become available again for grants pursuant to
                  Options or
                  other Awards.
  5.03
              Transfers.No
                  Award (other than an Award in the form of a direct issuance of
                  Shares
                  without any restrictions) may be assigned, pledged or transferred
                  other
                  than by will or by the laws of descent and distribution and, during
                  the
                  Participant’s lifetime, will be exercisable only by the Participant or, in
                  the event of a Participant’s incapacity, by the Participant’s Personal
                  Representative.
  **6.**
              **Vesting.**
  6.01
              Vesting.Options will be exercisable pursuant to the terms fixed by the
                  Board. Any
                  restrictions, conditions and forfeiture provisions imposed on Restricted
                  Shares shall lapse or terminate pursuant to their terms or the
                  terms of
                  the Plan.
  6.02
              Acceleration
                  of Vesting Period.The applicable vesting periods of Options will be accelerated,
                  and the
                  applicable restrictions, conditions and forfeiture provisions imposed
                  on
                  Restricted Shares may be terminated earlier, as provided for in
                  Sections 8
                  and 9 of the Plan, or as otherwise determined by the Board, in
                  its sole
                  discretion.
   A
            -
            5
  **7.**
              **Exercise
                  Price and Payment.**
  7.01
              Exercise
                  Price of Option.An
                  Option shall have an exercise price equal to the Fair Market Value
                  of the
                  Shares on the date of the grant of the Option.
  7.02
              Price
                  of Other Awards.With respect to other Awards granted by the Board, the consideration,
                  if
                  any, required to be paid by the Participant in exchange for such
                  Award
                  shall be determined by the Board, but in no event shall any required
                  consideration be greater than the Fair Market Value of the Shares
                  on the
                  date of grant of the Award.
  7.03
              Form
                  of Payment.Payment for the Options and any other Award issued for consideration
                  will
                  be made in cash; provided, that the Board may allow, in its sole
                  discretion, payment through the delivery of Shares owned by the
                  Award
                  recipient, duly endorsed for transfer to the Company, with a Fair
                  Market
                  Value on the date of exercise of an Option or date of issuance
                  of any
                  other Award equal to the aggregate exercise price of the Options
                  or
                  exercised portion thereof, or the full consideration to be paid
                  for any
                  other Award. If payment for the Shares acquired is to be made in
                  cash,
                  then full payment will be made at the time of the exercise of an
                  Option
                  and at the time of issuance of any other Award. If the Board permits
                  payment for the Shares acquired to be made in Shares owned by the
                  Award
                  recipient, then the Company shall provide written notice to the
                  Award
                  recipient of the number of Shares which must be delivered in full
                  payment
                  of the Option exercise price or the consideration required to be
                  paid for
                  any other Award, and the Award recipient shall deliver such number
                  of
                  Shares to the Company within two (2) business days of the receipt
                  of such
                  notice from the Company.
  **8.**
              **Adjustment
                  of Award.**
  8.01
              Adjustment
                  of and Changes in the Shares.In
                  the event there is any change in the Shares of the Company through
                  a split
                  or combination of the Shares, or by reason of a merger, consolidation
                  or
                  reorganization of the Company, including a change in the Company’s form of
                  business entity, or if there is a Share dividend, outstanding Awards
                  granted under the Plan shall apply to the securities of the Company
                  or any
                  other entity to which a holder of the number of Shares of the Company
                  subject to Awards would have been entitled by reason of any such
                  action or
                  transaction. Outstanding Awards shall be amended as to price and
                  other
                  terms if necessary to reflect the foregoing events, and the Board,
                  in its
                  discretion, may make other adjustments to such Awards and their
                  terms and
                  conditions which the Board deems necessary to protect such Awards
                  granted
                  under the Plan from dilution or diminution in value, or as may
                  otherwise
                  be deemed to be equitable under the
                  circumstances.
  8.02
              Change
                  in Control and Sale of All or Substantially All of the
                  Assets.In
                  the event of (i) a Change in Control, or (ii) a sale of all or
                  substantially all of the Company’s assets (other than a sale of assets to
                  a Subsidiary or other affiliated entity of the Company), all outstanding
                  Options shall become exercisable immediately before or contemporaneously
                  with the occurrence of a Change in Control or sale of all or substantially
                  all of the Company’s assets, and
                  each
   A
            -
            6
  outstanding
        Restricted Share shall immediately become free of all restrictions, conditions
        and forfeiture provisions upon the occurrence of a Change in Control or sale
        of
        all or substantially all of the Company’s assets.
  8.03
              Dissolution
                  or Liquidation of Company.In
                  the event of the dissolution or liquidation of the Company, the
                  outstanding Options shall terminate as of the date fixed by the
                  Board;
                  provided, however, that not less than thirty (30) days written
                  notice of
                  the date so fixed shall be given to each Participant who shall
                  have the
                  right during such period to exercise the Participant’s Options as to all
                  or any part of the Shares covered thereby. Further, in the event
                  of the
                  dissolution or liquidation of the Company, each outstanding Restricted
                  Share shall immediately become free of all restrictions, conditions
                  and
                  forfeiture provisions.
  8.04
              Adjustment
                  of Exercise Price for Cash Dividend.In
                  the event of a cash dividend, there shall be no adjustment to an
                  Award or
                  its terms, unless such cash dividend is attributable to the sale
                  by the
                  Company of a property or properties or to a refinancing by the
                  Company, in
                  which case the Board, in its discretion, may amend an Award and
                  its terms
                  and conditions in order to protect such Award from dilution or
                  diminution
                  in value, or as may otherwise be deemed to be equitable by the
                  Board under
                  the circumstances.
  **9.**
              **Death,
                  Disability, Retirement and Termination of
                  Participant.**
  9.01
              Death,
                  Retirement or Disability.In
                  the
                  event that the relationship between the Participant and the Company
                  or any
                  of its Subsidiaries is terminated by reason of the Participant’s death,
                  Retirement, or “disability” (as such term is defined in Section 22(e)(3)
                  of the Code), all of the Participant’s Options shall become immediately
                  exercisable. The Participant, the Participant’s Personal Representative or
                  the Participant’s designated beneficiary or estate, shall have the term
                  remaining on the Option from the date of death, Retirement or disability
                  to exercise all or any part of the Options.As
                  to Restricted Shares, the Board, in its discretion, may waive any
                  restriction or permit any restriction to
                  lapse.
  9.02
              Resignation.If
                  the Participant resigns from the Company or any Subsidiary, the
                  Participant shall have sixty (60) days to exercise all or any part
                  of an
                  Option which is fully vested on or before the date of termination.
                  As to
                  Restricted Shares, the Board, in its discretion, may waive any
                  restriction
                  or permit any restriction to lapse.
  9.03
              Termination
                  other than for Just Cause.In
                  the event a Participant’s employment or consulting relationship is
                  terminated by the Company for any reason other than for Just Cause,
                  each
                  Option, or any part thereof, scheduled to vest on or before the
                  succeeding
                  anniversary date of the grant of the Option following the date
                  of
                  termination shall become immediately exercisable, and the Participant
                  shall have sixty (60) days from the date of termination to exercise
                  all or
                  any part of such vested Options. As to Restricted Shares, the Board,
                  in
                  its discretion, may waive any restriction or permit any restriction
                  to
                  lapse.
   A
            -
            7
  9.04
              Termination
                  for Just Cause.If
                  the Participant’s employment or consulting relationship is terminated by
                  the Company for Just Cause, all Options and Restricted Shares held
                  by the
                  Participant will be immediately terminated and forfeited back to
                  the
                  Company (other than those Restricted Shares where all restrictions
                  have
                  lapsed and all other conditions of ownership have been satisfied),
                  respectively.
  9.05
              Removal
                  of Trustee.If
                  a Trustee is removed from the Board for any reason, all Options
                  and
                  Restricted Shares held by the Trustee will be immediately terminated
                  and
                  forfeited back to the Company (other than those Restricted Shares
                  where
                  all restrictions have lapsed and all other conditions of ownership
                  have
                  been satisfied), respectively.
  9.06
              Failure
                  to Nominate or Elect Trustee.If
                  a Trustee is not nominated for re-election to the Board or if a
                  nominated
                  Trustee is not elected to the Board by the Company’s shareholders, then
                  any such Trustee shall have thirty (30) days from the date such
                  Trustee
                  receives notice from the Company that he or she has not been nominated
                  for
                  re-election to the Board or has not been elected to the Board by
                  the
                  Company’s shareholders to exercise all or part of any Option which is
                  fully vested on or before the expiration of such thirty (30) day
                  notice
                  period. As to Restricted Shares, the Board, in its discretion,
                  may waive
                  any restriction or permit any restriction to
                  lapse.
  **10.**
              **Termination,
                  Modification and Amendment of
                  Plan.**
  The
        Plan
        may be terminated, modified or amended by the Board at any time; however,
        (i)
        any modification or amendment increasing the aggregate number of Shares which
        may be issued under the Plan will be subject to shareholder approval, and
        (ii)
        any termination, modification or amendment of the Plan which will adversely
        affect or alter the terms of any then outstanding Options or Restricted Shares
        will be subject to the consent of the holders thereof.
  **11.**
              **Trustee’s
                  Fees.**
  Subject
        to the limitations contained in Section 4.01 of this Plan on the number of
        Shares which may be issued pursuant to this Plan, the Board, in its sole
        discretion, may permit any member of the Board to receive all or a portion
        of
        the member’s annual Board retainer fee, Board meeting fees, and Board committee
        fees in the form of Shares. Any member of the Board who desires to receive
        all
        or any part of such Board fees in Shares must provide the Company with written
        notice of the member’s election to receive payment of Board fees in this form no
        later than five (5) business days prior to the date of payment of such fees.
        If
        the Board agrees to pay such fees in the form of Shares, then the number
        of
        Shares with an aggregate Fair Market Value on the scheduled date(s) for payment
        of the annual Board retainer fee and on the date of the Board or committee
        meeting for which fees are payable which is equal to the aggregate amount
        of
        such Board fees shall be issued to the Board member no later than fifteen
        (15)
        days following the date of payment of such Board fees by the Company. No
        fractional Shares will be issued in connection with any election pursuant
        to
        this Section to receive Shares in lieu of Board fees.
   A
            -
            8
  **12.**
              **Miscellaneous.**
  12.01
              Governing
                  Law.This Plan shall be governed by and construed in accordance with
                  the laws
                  of the State of New Jersey.
  12.02
              Successors
                  and Assigns.The provisions of this Plan shall be binding upon all successors
                  and
                  assigns of any such Participant including, without limitation,
                  the estate
                  of a Participant, any Personal Representative of a Participant
                  and any
                  receiver, trustee in bankruptcy or representative of the creditors
                  of a
                  Participant.
  12.03
              Tax
                  Withholding.The Company will have the right to deduct from any cash payment
                  under the
                  Plan taxes that are required to be withheld and to condition the
                  obligation to deliver or vest Shares under this Plan upon the
                  Participant’s paying the Company such amounts as the Company may request
                  to satisfy any liability for applicable withholding
                  taxes.
  12.04
              Rights
                  of a Shareholder.Except as specifically provided by the Plan, the receipt of an
                  Award will
                  not give a Participant rights as a shareholder of the
                  Company.
  A
              -
              9




**ý****PLEASE
                  MARK VOTES**
                **AS
                  IN
                  THIS EXAMPLE**
              **REVOCABLE
                  PROXY**
                **First
                  Real Estate Investment Trust of New Jersey**


**ANNUAL
                  MEETING OF HOLDERS OF SHARES OF**
                **BENEFICIAL
                  INTEREST - APRIL 4, 2007**
              
              
              **For**
              **With-**
                **hold**
              **For
                  All**
                **Except****THIS
                      PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
                      TRUSTEES**
              
              
              o
              o
              oThe
                    undersigned hereby nominates and appoints Robert S. Hekemian
                    and John A.
                    Aiello, Esq. and each of them, the true and lawful attorneys,
                    agents and
                    proxies of the undersigned, with full power of substitution,
                    to vote with
                    respect to all of the shares, representing beneficial interests,
                    of FIRST
                    REAL ESTATE INVESTMENT TRUST OF NEW JERSEY standing in the name
                    of the
                    undersigned at the close of business on February 19, 2007, at
                    the annual
                    meeting of holders of shares of beneficial interest to be held
                    at the
                    Trust’s headquarters, 505 Main Street, Hackensack, New Jersey 07602,
                    on
                    April 4, 2007 at 7:30 p.m., and at any and all adjournment or
                    adjournments
                    thereof, with all powers that the undersigned would possess if
                    personally
                    present and especially (but without limiting the general authorization
                    and
                    power hereby given) to vote as indicated hereon.
              
              1.    
                    ELECTION OF TRUSTEES
                  for
                    a three (3) year term:
                  **Ronald
                    J. Artinian and Alan L. Aufzien**
                  
                  **INSTRUCTION:
                      To withhold authority to vote for either nominee, mark “For All Except”
                      and write that nominee’s name in the space provided
                      below.****For**
              Against
              **Abstain**2.  
                    AMENDMENT
                    TO THE EQUITY INCENTIVE PLAN TO RESERVE ADDITIONAL SHARES FOR
                    ISSUANCE
                    THEREUNDER:
              o
              o
              o**For**
              Against
              **Abstain**3.  
                      AMENDMENT TO THE EQUITY INCENTIVE PLAN TO EXTEND THE TERM
                      THEREOF:
              o
              o
              o4.   
                  In
                  their discretion upon such other matters as may properly come before
                  the
                  meeting or any adjournment or adjournments thereof. The shares
                  represented
                  by this Proxy will be voted in the manner directed, and if no instructions
                  to the contrary are indicated, will be voted FOR the election of
                  the
                  nominees indicated on this Proxy and FOR each amendment to the
                  Equity
                  Incentive Plan. IMPORTANT: Please sign exactly as your name appears.
                  When
                  signing as attorney, executor, administrator, trustee or guardian,
                  please
                  set forth your full title. If signer is a corporation, please sign
                  the
                  full corporate name by a duly authorized officer. Joint owners
                  should each
                  sign.


Please
                be sure to sign and datethis Proxy in the box below
            
            DateShareholder
                sign above
            Co-holder
                (if any) sign above)







Ç**Detach
        above card, sign, date and mail in postage paid envelope
        provided.**Ç
  **First
          Real Estate Investment Trust of New Jersey**




**PLEASE
                  ACT PROMPTLY**
                **SIGN,
                  DATE & MAIL YOUR PROXY CARD
                  TODAY**


IF
        YOUR
        ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW
        AND
        RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.