**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

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

**For      the Quarterly Period Ended April 30, 2007**

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

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

----

----

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

----

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

**INDEX**

**Part      I:  Financial Information**

|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       | Page   |
|-----------------------------------------------|------------------------|---------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |
|                                          | Item                1: | Unaudited                Condensed Consolidated Financial                Statements                                       |                                                                                                                                                                                                       |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |
|                                          |                   | a.)                                                                                                                       | Consolidated                Balance Sheets as at April 30, 2007 and October                31, 2006;                                                                                                       | 3      |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |
|                                          |                   | b.)                                                                                                                       | Consolidated                Statements of Income, Comprehensive Income and                Undistributed Earnings for the Six and Three Months Ended April 30,                2007                and 2006; | 4      |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |
|                                          |                   | c.)                                                                                                                       | Consolidated                Statements of Cash Flows for the Six Months Ended                April 30, 2007 and 2006;                                                                                      | 5      |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |
|                                          |                   | d.)                                                                                                                       | Notes                to Condensed Consolidated Financial                Statements.                                                                                                                        | 6      |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |
|                                          | Item                2: | Management’s                Discussion and Analysis of Financial Condition and                Results of Operations | 8                                                                                                                                                                                                          |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |
|                                          | Item                3: | Quantitative                and Qualitative Disclosures About Market                Risk                                  | 17                                                                                                                                                                                                         |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |
|                                          | Item                4: | Controls                and Procedures                                                                                    | 17                                                                                                                                                                                                         |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |
| **Part                II: Other Information** |                   |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |
|                                          | Item                4: | Submission                of Matters to a Vote of Security                Holders                                         | 17                                                                                                                                                                                                         |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |
|                                          | Item                6: | Exhibits                                                                                                                  | 18                                                                                                                                                                                                         |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |
|                                          | Signatures             |                                                                                                                      | 19                                                                                                                                                                                                         |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |
|                                          |                   |                                                                                                                      |                                                                                                                                                                                                       |   |

----

*Index*

**Part      I:  Financial Information**

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

| **FIRST                  REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND                  SUBSIDIARIES**  |
|---------------------------------------------------------------------------------------------------------------|
| CONSOLIDATED                  BALANCE SHEETS                                    |
| (Unaudited)                                                                     |
|                                                                                                          |   |   |   |   |   |   |
|                                                                                                          |   |   |   |   |   |   |
|                                                                                                          |   | April                  30, |   |   | October                  31, |   |
|                                                                                                          |   | 2007 |   |   | 2006 |   |
|                                                                                                          |   | (In                  Thousands of Dollars) |   |
| ASSETS                                                                                                        |   |   |   |   |   |   |
| Real                  estate, at cost, net of accumulated depreciation                                        |   | $ | 204,220 |   |   | $ | 204,313 |   |
| Construction                  in progress                                                                     |   |   | 3,245 |   |   |   | 2,995 |   |
| Cash                  and cash equivalents                                                                    |   |   | 13,978 |   |   |   | 9,616 |   |
| Tenants'                  security accounts                                                                   |   |   | 2,212 |   |   |   | 2,161 |   |
| Sundry                  receivables                                                                           |   |   | 3,681 |   |   |   | 3,320 |   |
| Secured                  loans receivable                                                                     |   |   | 3,109 |   |   |   | 3,109 |   |
| Prepaid                  expenses and other assets                                                            |   |   | 2,641 |   |   |   | 4,201 |   |
| Acquired                  over market leases and in-place lease costs                                         |   |   | 1,249 |   |   |   | 1,395 |   |
| Deferred                  charges, net                                                                        |   |   | 3,543 |   |   |   | 3,589 |   |
| Interest                  rate swap contract                                                                  |   |   | 58 |   |   |   | 87 |   |
| Totals                                                                                                        |   | $ | 237,936 |   |   | $ | 234,786 |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
| LIABILITIES                  AND SHAREHOLDERS' EQUITY                                                         |   |   |   |   |   |   |   |   |
| Liabilities:                                                                                                  |   |   |   |   |   |   |   |   |
| Mortgages                  payable                                                                            |   | $ | 190,516 |   |   | $ | 180,679 |   |
| Accounts                  payable and accrued expenses                                                        |   |   | 3,238 |   |   |   | 6,097 |   |
| Dividends                  payable                                                                            |   |   | 2,027 |   |   |   | 3,375 |   |
|  Tenants'                  security deposits                                                             |   |   | 2,914 |   |   |   | 2,823 |   |
| Acquired                  below market value leases and deferred revenue                                      |   |   | 3,420 |   |   |   | 3,945 |   |
| Total                  liabilities                                                                            |   |   | 202,115 |   |   |   | 196,919 |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
| Minority                  interest                                                                            |   |   | 12,916 |   |   |   | 12,895 |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
| Commitments                  and contingencies                                                                |   |   |   |   |   |   |   |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
| Shareholders'                  equity:                                                                        |   |   |   |   |   |   |   |   |
| Shares                  of beneficial interest without par value:                                             |   |   |   |   |   |   |   |   |
| 8,000,000                  shares authorized;                                                                 |   |   |   |   |   |   |   |   |
|      6,755,652                  and 6,750,652 shares issued and outstanding          |   |   | 23,187 |   |   |   | 23,150 |   |
| (Distributions                  in excess of earnings) Undistributed earnings                                 |   |   | (340 | ) |   |   | 1,735 |   |
| Accumulated                  other comprehensive income                                                       |   |   | 58 |   |   |   | 87 |   |
| Total                  shareholders' equity                                                                   |   |   | 22,905 |   |   |   | 24,972 |   |
| Totals                                                                                                        |   | $ | 237,936 |   |   | $ | 234,786 |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
|                                                                                                          |   |   |   |   |   |   |   |   |
| See                  Notes to Condensed Consolidated Financial Statements.                                    |   |   |   |   |   |   |   |   |

----

*Index*

| **FIRST                REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND                SUBSIDIARIES**     |
|-----------------------------------------------------------------------------------------------------------------------------|
| CONSOLIDATED                STATEMENTS OF INCOME, COMPREHENSIVE INCOME                                  |
| AND                UNDISTRIBUTED EARNINGS                       |
| SIX                AND THREE MONTHS ENDED APRIL 30, 2007 AND 2006                        |
| (Unaudited)                                                     |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   | Six                Months Ended |   |   | Three                Months Ended |   |
|                                                                                                                        |   | April                30,    |   |   | April                30,    |   |
|                                                                                                                        |   | 2007 |   |   | 2006 |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                        |   | (In                Thousands of Dollars, Except Per Share Amounts)    |   |
| Revenue:                                                                                                                    |   |   |   |   | Restated |   |   |   |   |   | Restated |   |
| Rental                income                                                                                                |   | $ | 17,705 |   |   | $ | 16,242 |   |   | $ | 8,881 |   |   | $ | 8,108 |   |
| Reimbursements                                                                                                              |   |   | 2,373 |   |   |   | 2,421 |   |   |   | 1,089 |   |   |   | 1,079 |   |
| Sundry                income                                                                                                |   |   | 184 |   |   |   | 106 |   |   |   | 78 |   |   |   | 48 |   |
| Totals                                                                                                                      |   |   | 20,262 |   |   |   | 18,769 |   |   |   | 10,048 |   |   |   | 9,235 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                expenses                                                                                           |   |   | 5,599 |   |   |   | 4,990 |   |   |   | 2,661 |   |   |   | 2,423 |   |
| Management                fees                                                                                              |   |   | 880 |   |   |   | 829 |   |   |   | 440 |   |   |   | 413 |   |
| Real                estate taxes                                                                                            |   |   | 2,880 |   |   |   | 2,719 |   |   |   | 1,440 |   |   |   | 1,350 |   |
| Depreciation                                                                                                                |   |   | 2,655 |   |   |   | 2,267 |   |   |   | 1,349 |   |   |   | 1,137 |   |
| Totals                                                                                                                      |   |   | 12,014 |   |   |   | 10,805 |   |   |   | 5,890 |   |   |   | 5,323 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                income                                                                                             |   |   | 8,248 |   |   |   | 7,964 |   |   |   | 4,158 |   |   |   | 3,912 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment                income                                                                                            |   |   | 225 |   |   |   | 113 |   |   |   | 138 |   |   |   | 65 |   |
| Interest                expense including amortization                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   of                deferred financing costs                                                                      |   |   | (6,088 | ) |   |   | (5,507 | ) |   |   | (3,045 | ) |   |   | (2,772 | ) |
| Minority                interest                                                                                            |   |   | (258 | ) |   |   | (157 | ) |   |   | (120 | ) |   |   | (80 | ) |
| Distribution                to certain minority interests                                                                   |   |   | (150 | ) |   |   | (90 | ) |   |   | - |   |   |   | (90 | ) |
| Net                income                                                                                                   |   | $ | 1,977 |   |   | $ | 2,323 |   |   | $ | 1,131 |   |   | $ | 1,035 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                per share:                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                       |   | $ | 0.29 |   |   | $ | 0.36 |   |   | $ | 0.17 |   |   | $ | 0.16 |   |
| Diluted                                                                                                                     |   |   | 0.29 |   |   |   | 0.34 |   |   |   | 0.16 |   |   |   | 0.15 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding:                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                       |   |   | 6,751 |   |   |   | 6,522 |   |   |   | 6,751 |   |   |   | 6,542 |   |
| Diluted                                                                                                                     |   |   | 6,916 |   |   |   | 6,753 |   |   |   | 6,915 |   |   |   | 6,889 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| COMPREHENSIVE                INCOME                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                                   |   | $ | 1,977 |   |   | $ | 2,323 |   |   | $ | 1,131 |   |   | $ | 1,035 |   |
| Other                comprehensive income (loss):                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                gain (loss) on interest                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    rate                swap contract                                                                         |   |   | (29 | ) |   |   | 28 |   |   |   | (22 | ) |   |   | 23 |   |
| Comprehensive                income                                                                                         |   | $ | 1,948 |   |   | $ | 2,351 |   |   | $ | 1,109 |   |   | $ | 1,058 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (DISTRIBUTIONS                IN EXCESS OF EARNINGS) UNDISTRIBUTED EARNINGS                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,                beginning of period                                                                                 |   | $ | 1,735 |   |   | $ | 4,890 |   |   | $ | 556 |   |   | $ | 4,515 |   |
| Net                income                                                                                                   |   |   | 1,977 |   |   |   | 2,323 |   |   |   | 1,131 |   |   |   | 1,035 |   |
| Less                dividends declared                                                                                      |   |   | (4,052 | ) |   |   | (3,299 | ) |   |   | (2,027 | ) |   |   | (1,636 | ) |
| Balance,                end of period                                                                                       |   | $ | (340 | ) |   | $ | 3,914 |   |   | $ | (340 | ) |   | $ | 3,914 |   |
| Dividends                declared per share                                                                                 |   | $ | 0.60 |   |   | $ | 0.50 |   |   | $ | 0.30 |   |   | $ | 0.25 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                Notes to Condensed Consolidated Financial Statements.                                                    |   |   |   |   |   |   |   |   |   |

----

*Index*

| **FIRST                REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND                SUBSIDIARIES**     |
|-----------------------------------------------------------------------------------------------------------------------------|
| CONSOLIDATED                STATEMENTS OF CASH FLOWS                                          |
| SIX                MONTHS ENDED APRIL 30, 2007 AND 2006                                       |
| (Unaudited)                                                                                   |
|                                                                                                                        |   |   |   |   |   |   |
|                                                                                                                        |   | Six                Months Ended    |   |
|                                                                                                                        |   | April                30,    |   |
|                                                                                                                        |   | 2007 |   |   | 2006 |   |
|                                                                                                                        |   | (In                Thousands of Dollars) |   |
|                                                                                                                        |   |   |   |   | Restated |   |
| Operating                activities:                                                                                        |   |   |   |   |   |   |
| Net                income                                                                                                   |   | $ | 1,977 |   |   | $ | 2,323 |   |
| Adjustments                to reconcile net income to net cash provided by                                                  |   |   |   |   |   |   |   |   |
| operating                activities:                                                                                        |   |   |   |   |   |   |   |   |
|   Depreciation                                                                                                    |   |   | 2,655 |   |   |   | 2,267 |   |
|   Amortization                                                                                                    |   |   | 360 |   |   |   | 217 |   |
|   Net                amortization of acquired leases                                                              |   |   | (151 | ) |   |   | (202 | ) |
|   Deferred                revenue                                                                                 |   |   | (298 | ) |   |   | (177 | ) |
|   Minority                interest                                                                                |   |   | 408 |   |   |   | 247 |   |
|  Changes                in operating assets and liabilities:                                                           |   |   |   |   |   |   |   |   |
|  Tenants'                security accounts                                                                             |   |   | (51 | ) |   |   | (96 | ) |
|    Sundry                receivables, prepaid expenses and other assets                                      |   |   | 914 |   |   |   | (131 | ) |
|    Accounts                payable, accrued expenses and other liabilities                                   |   |   | (448 | ) |   |   | (581 | ) |
|  Tenants'                security deposits                                                                             |   |   | 91 |   |   |   | 111 |   |
| Net                cash provided by operating activities                                                                    |   |   | 5,457 |   |   |   | 3,978 |   |
| Investing                activities:                                                                                        |   |   |   |   |   |   |   |   |
| Capital                improvements - existing properties                                                                   |   |   | (1,464 | ) |   |   | (1,171 | ) |
| Construction                and pre development costs                                                                       |   |   | (3,718 | ) |   |   | (7,704 | ) |
|                                                                                                                        |   |   |   |   |   |   |   |   |
| Net                cash used in investing activities                                                                        |   |   | (5,182 | ) |   |   | (8,875 | ) |
| Financing                activities:                                                                                        |   |   |   |   |   |   |   |   |
| Repayment                of mortgages                                                                                       |   |   | (18,494 | ) |   |   | (976 | ) |
| Proceeds                from mortgages                                                                                      |   |   | 28,331 |   |   |   | 9,550 |   |
| Proceeds                from exercise of stock options                                                                      |   |   | 37 |   |   |   | 469 |   |
| Dividends                paid                                                                                               |   |   | (5,400 | ) |   |   | (4,579 | ) |
| Distribution                to minority interest                                                                            |   |   | (387 | ) |   |   | (360 | ) |
| Net                cash provided by financing activities                                                                    |   |   | 4,087 |   |   |   | 4,104 |   |
| Net                increase (decrease) in cash and cash equivalents                                                         |   |   | 4,362 |   |   |   | (793 | ) |
| Cash                and cash equivalents, beginning of period                                                               |   |   | 9,616 |   |   |   | 5,672 |   |
| Cash                and cash equivalents, end of period                                                                     |   | $ | 13,978 |   |   | $ | 4,879 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |
| Supplemental                disclosure of cash flow data:                                                                   |   |   |   |   |   |   |   |   |
| Interest                paid, including capitalized construction period interest                                            |   |   |   |   |   |   |   |   |
|      of                $155 in fiscal 2006.                                                        |   | $ | 5,956 |   |   | $ | 5,533 |   |
| Income                taxes paid                                                                                            |   | $ | 18 |   |   | $ | 10 |   |
| Supplemental                schedule of non cash financing activities:                                                      |   |   |   |   |   |   |   |   |
|                  Accrued capital expenditures, construction costs and pre-development                costs             |   | $ | 34 |   |   | $ | - |   |
| Dividends                declared but not paid                                                                              |   | $ | 2,027 |   |   | $ | 1,636 |   |
|                                                                                                                        |   |   |   |   |   |   |   |   |
| See                Notes to Condensed Consolidated Financial Statements.                                                    |   |   |   |   |   |   |   |   |

----

*Index*

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

|                                                                   |   | Six                  Months Ended    |      |   | Three                  Months Ended          |   |
|------------------------------------------------------------------------|--------|-----------------------------------------------------|-----------|--------|----------------------------------------------|--------|
|                                                                   |   | April                  30,           |      |   | April                  30,    |   |
|                                                                   |   | 2007                                                |      |   | 2006                                         |   |   | 2007 |   |   | 2006 |   |
| Basic                  weighted average shares outstanding             |   |                                                | 6,750,873 |   |                                         |   | 6,521,985 |   |   |   | 6,751,101 |   |   |   | 6,542,402 |   |
|                                                                   |   |                                                |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Shares                  arising from assumed exercise of stock options |   |                                                | 165,091   |   |                                         |   | 231,151 |   |   |   | 164,016 |   |   |   | 346,726 |   |
| Dilutive                  weighted average shares outstanding          |   |                                                | 6,915,964 |   |                                         |   | 6,753,136 |   |   |   | 6,915,117 |   |   |   | 6,889,128 |   |
|                                                                   |   |                                                |      |   |                                         |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

|                                                           |   | Six                  Months Ended                                                    |   |   | Three                  Months Ended          |   |
|----------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                                           |   | April                  30,                                            |   |   | April                  30,    |   |
|                                                           |   | 2007                                                                                 |   |   |                                         | 2006*  |   |   | 2007 |   |   |   | 2006* |   |
|                                                           |   | (In                  Thousands of Dollars)        |   |
| Real                  estate rental revenue:                   |   |                                                                                 |   |   |                                         |   |   |   |   |   |   |   |   |   |
| Commercial                                                     |   | $                                                                                    | 10,735 |   |                                         | $      | 10,500 |   |   | $ | 5,272 |   |   | $ | 5,125 |   |
| Residential                                                    |   |                                                                                 | 9,262  |   |                                         |   | 7,896 |   |   |   | 4,642 |   |   |   | 3,962 |   |
| Totals                                                         |   |                                                                                 | 19,997 |   |                                         |   | 18,396 |   |   |   | 9,914 |   |   |   | 9,087 |   |
|                                                           |   |                                                                                 |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Real                  estate operating expenses:               |   |                                                                                 |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                                     |   |                                                                                 | 4,303  |   |                                         |   | 4,096 |   |   |   | 2,138 |   |   |   | 2,021 |   |
| Residential                                                    |   |                                                                                 | 4,253  |   |                                         |   | 3,916 |   |   |   | 1,990 |   |   |   | 1,884 |   |
| Totals                                                         |   |                                                                                 | 8,556  |   |                                         |   | 8,012 |   |   |   | 4,128 |   |   |   | 3,905 |   |
|                                                           |   |                                                                                 |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Net                  operating income:                         |   |                                                                                 |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                                     |   |                                                                                 | 6,432  |   |                                         |   | 6,404 |   |   |   | 3,134 |   |   |   | 3,104 |   |
| Residential                                                    |   |                                                                                 | 5,009  |   |                                         |   | 3,980 |   |   |   | 2,652 |   |   |   | 2,078 |   |
| Totals                                                         |   | $                                                                                    | 11,441 |   |                                         | $      | 10,384 |   |   | $ | 5,786 |   |   | $ | 5,182 |   |
|                                                           |   |                                                                                 |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Recurring                  capital improvements-residential    |   | $                                                                                    | 239    |   |                                         | $      | 458 |   |   | $ | 65 |   |   | $ | 119 |   |
|                                                           |   |                                                                                 |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Reconciliation                  to consolidated net income:    |   |                                                                                 |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Segment                  NOI                                   |   | $                                                                                    | 11,441 |   |                                         | $      | 10,384 |   |   | $ | 5,786 |   |   | $ | 5,182 |   |
| Deferred                  rents - straight lining              |   |                                                                                 | 114    |   |                                         |   | 171 |   |   |   | 59 |   |   |   | 85 |   |
| Amortization                  of acquired leases               |   |                                                                                 | 151    |   |                                         |   | 202 |   |   |   | 75 |   |   |   | 63 |   |
| Net                  investment income                         |   |                                                                                 | 225    |   |                                         |   | 113 |   |   |   | 138 |   |   |   | 65 |   |
| Minority                  interest in earnings of subsidiaries |   |                                                                                 | (258   | )      |                                         |   | (157 | ) |   |   | (120 | ) |   |   | (80 | ) |
| Distribution                  to certain minority interests    |   |                                                                                 | (150   | )      |                                         |   | (90 | ) |   |   | - |   |   |   | (90 | ) |
| General                  and administrative expenses           |   |                                                                                 | (803   | )      |                                         |   | (526 | ) |   |   | (413 | ) |   |   | (281 | ) |
| Depreciation                                                   |   |                                                                                 | (2,655 | )      |                                         |   | (2,267 | ) |   |   | (1,349 | ) |   |   | (1,137 | ) |
| Financing                  costs                               |   |                                                                                 | (6,088 | )      |                                         |   | (5,507 | ) |   |   | (3,045 | ) |   |   | (2,772 | ) |
| Net                  income                                    |   | $                                                                                    | 1,977  |   |                                         | $      | 2,323 |   |   | $ | 1,131 |   |   | $ | 1,035 |   |
|                                                           |   |                                                                                 |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| *                  Restated                                    |   |                                                                                 |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

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

| Cautionary                Statement Identifying Important Factors That Could Cause FREIT’s Actual                Results to Differ From                Those Projected in Forward Looking Statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Readers                of this discussion are advised that the discussion should be read                in                conjunction with the unaudited condensed consolidated financial statements                of FREIT (including related notes thereto) appearing elsewhere in                this                Form 10-Q, and the consolidated financial statements included in                FREIT’s                most recently filed Form 10-K. Certain statements in this discussion                may                constitute “forward-looking statements” within the meaning of the Private                Securities Litigation Reform Act of 1995. Forward-looking statements                reflect FREIT’s current expectations regarding future results of                operations, economic performance, financial condition and achievements                of                FREIT, and do not relate strictly to historical or current facts.                FREIT                has tried, wherever possible, to identify these forward-looking statements                by using words such as “believe,”  “expect,” “anticipate,”                “intend, “ “plan,” “ estimate,” or words of similar                meaning. |
| Although                FREIT believes that the expectations reflected in such forward-looking                statements are based on reasonable assumptions, such statements are                subject to risks and uncertainties, which may cause the actual results                to                differ materially from those projected.  Such factors include,                but are not limited to the following: general economic and business                conditions, which will, among other things, affect demand for rental                space, the availability of prospective tenants, lease rents and the                availability of financing; adverse changes in FREIT’s real estate markets,                including, among other things, competition with other real estate                owners,                risks of real estate development and acquisitions; governmental actions                and initiatives; and environmental/safety                requirements.                                                                                                                                                                                                                                                                                                                                            |

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

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

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

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

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

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

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

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

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

----

*Index*

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

----

*Index*

**Results        of Operations:**

| **NET                    INCOME COMPONENTS**                                   |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |
|--------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------|-----------|--------|------------------------------------------------------------------|--------|-----------|--------|--------|--------|----------|--------|--------|--------|-----------|--------|--------|--------|
|                                                                           |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |
|                                                                           |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |
|                                                                           |   | Six                    Months Ended                                                                        |      |   | Three                    Months Ended             |   |
|                                                                           |   | April                    30,                                                                |      |   | April                    30,       |   |
|                                                                           |   | 2007                                                                                                                      |      |   |                                                             | 2006*  |      |   | Change |   |     | 2007   |   |   |      | 2006*  |   |   | Change |   |
|                                                                           |   | *(thousands                    of dollars)*              |      |
| **Commercial                    Properties**                                   |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |
| Same                    Properties                    (1)                      |   | $                                                                                                                         | 6,504     |   |                                                             | $      | 6,397     |   |   | $      | 107      |   |   | $      | 3,186     |   |   | $      | 3,073 |   |   | $ | 113 |   |
| Damascus                    Center - undergoing renovation                     |   |                                                                                                                      | 193       |   |                                                             |   | 380       |   |   |   | (187     | )      |   |   | 82        |   |   |   | 179 |   |   |   | (97 | ) |
| Total                    Commercial Properties                                 |   |                                                                                                                      | 6,697     |   |                                                             |   | 6,777     |   |   |   | (80      | )      |   |   | 3,268     |   |   |   | 3,252 |   |   |   | 16 |   |
|                                                                           |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
| **Residential                    Properties**                                  |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Same                    Properties                    (1)                      |   |                                                                                                                      | 4,409     |   |                                                             |   | 3,988     |   |   |   | 421      |   |   |   | 2,338     |   |   |   | 2,085 |   |   |   | 253 |   |
| Boulders                    at Rockaway                                        |   |                                                                                                                      | 600       |   |                                                             |   | (8        | )      |   |   | 608      |   |   |   | 314       |   |   |   | (7 | ) |   |   | 321 |   |
| Total                    Residential Properties                                |   |                                                                                                                      | 5,009     |   |                                                             |   | 3,980     |   |   |   | 1,029    |   |   |   | 2,652     |   |   |   | 2,078 |   |   |   | 574 |   |
|                                                                           |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Total                    income from real estate operations                    |   |                                                                                                                      | 11,706    |   |                                                             |   | 10,757    |   |   |   | 949      |   |   |   | 5,920     |   |   |   | 5,330 |   |   |   | 590 |   |
|                                                                           |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
| **Financing                    costs:**                                        |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Fixed                    rate mortgages                                        |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Same                    Properties                    (1)                      |   |                                                                                                                      | (4,535    | )      |                                                             |   | (4,689    | )      |   |   | 154      |   |   |   | (2,220    | )      |   |   | (2,337 | ) |   |   | 117 |   |
| Boulders                    at Rockaway                                        |   |                                                                                                                      | (540      | )      |                                                             |   | (6        | )      |   |   | (534     | )      |   |   | (284      | )      |   |   | (6 | ) |   |   | (278 | ) |
| Floating                    Rate - Rotunda                                     |   |                                                                                                                      | (817      | )      |                                                             |   | (702      | )      |   |   | (115     | )      |   |   | (398      | )      |   |   | (358 | ) |   |   | (40 | ) |
| Corporate                    interest - Line / Floating                        |   |                                                                                                                      | (196      | )      |                                                             |   | (110      | )      |   |   | (86      | )      |   |   | (143      | )      |   |   | (71 | ) |   |   | (72 | ) |
| Total                    financing costs                                       |   |                                                                                                                      | (6,088    | )      |                                                             |   | (5,507    | )      |   |   | (581     | )      |   |   | (3,045    | )      |   |   | (2,772 | ) |   |   | (273 | ) |
|                                                                           |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Investment                    income                                           |   |                                                                                                                      | 225       |   |                                                             |   | 113       |   |   |   | 112      |   |   |   | 138       |   |   |   | 65 |   |   |   | 73 |   |
|                                                                           |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Corporate                    expenses                                          |   |                                                                                                                      | (461      | )      |                                                             |   | (405      | )      |   |   | (56      | )      |   |   | (301      | )      |   |   | (219 | ) |   |   | (82 | ) |
| Accounting                                                                     |   |                                                                                                                      | (342      | )      |                                                             |   | (121      | )      |   |   | (221     | )      |   |   | (112      | )      |   |   | (62 | ) |   |   | (50 | ) |
| Minority                    interest in earnings of subsidiaries               |   |                                                                                                                      | (258      | )      |                                                             |   | (157      | )      |   |   | (101     | )      |   |   | (120      | )      |   |   | (80 | ) |   |   | (40 | ) |
| Distribution                    to Westwood Hills minority interests           |   |                                                                                                                      | (150      | )      |                                                             |   | (90       | )      |   |   | (60      | )      |   |   | -         |   |   |   | (90 | ) |   |   | 90 |   |
|                                                                           |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
| **Depreciation:**                                                              |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
| Same                    Properties                    (1)                      |   |                                                                                                                      | (2,386    | )      |                                                             |   | (2,267    | )      |   |   | (119     | )      |   |   | (1,203    | )      |   |   | (1,137 | ) |   |   | (66 | ) |
| Boulders                    at Rockaway                                        |   |                                                                                                                      | (269      | )      |                                                             |   |      |   |   |   | (269     | )      |   |   | (146      | )      |   |   |   |   |   |   | (146 | ) |
| Total                    depreciation                                          |   |                                                                                                                      | (2,655    | )      |                                                             |   | (2,267    | )      |   |   | (388     | )      |   |   | (1,349    | )      |   |   | (1,137 | ) |   |   | (212 | ) |
|                                                                           |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
| **Net                    Income**                                              |   | **$**                                                                                                                     | **1,977** |   |                                                             | **$**  | **2,323** |   |   | **$**  | **(346** | **)**  |   | **$**  | **1,131** |   |   | **$**  | **1,035** |   |   | **$** | **96** |   |
|                                                                           |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |
| (1)                    Properties operated since the beginning of fiscal 2006. |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |   |
|    *                    Restated                                |   |                                                                                                                      |      |   |                                                             |   |      |   |   |   |     |   |   |   |      |   |   |   |   |   |   |   |   |   |

----

*Index*

|                                              |   |                                                                        |       |                                                                        |   |                                                 |       |                                                                        |   |                                                        |   |       |   |                              |       |    |   |                                      |       |        |   |         |       |    |   |   |      |   |   |         |
|---------------------------------------------------|--------|-----------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------|--------|------------------------------------------------------|------------|-----------------------------------------------------------------------------|--------|-------------------------------------------------------------|--------|------------|--------|-----------------------------------|------------|---------|--------|-------------------------------------------|------------|-------------|--------|--------------|------------|---------|--------|--------|-----------|--------|--------|--------------|
| **Six                    Months Ended April 30:** |   |                                                                        |       |                                                                        |   |                                                 |       |                                                                        |   |                                                        |   |       |   |                              |       |    |   |                                      |       |        |   |         |       |    |   |   |      |   |   |         |
|                                              |   | **Commercial**            |       | **Residential**           |   | **Combined**                     |
|                                              |   | Six                    Months Ended                     |       |                                                                        |   |                                                 |       |                                                                        |   | Six                    Months Ended     |   |       |   |                              |       |    |   | Six                    Months Ended  |
|                                              |   | April                    30,                            |       | Increase                    (Decrease)                                 |   | April                    30,     |       | Increase                    (Decrease)                                 |   | April                    30,            |
|                                              |   | 2007                                                                   |       | 2006                                                                   |   |  $                                              |       | %                                                                           |   | 2007                                                   |   | 2006  |   |  $                           |       | %       |   | 2007                                 |       |  2006* |
|                                              |   | (in                    thousands)        |       |                                                                        |   |                                                 |       | (in                    thousands)        |   |                                                        |   |       |   | (in                    thousands) |
| Rental                    income                  |   | $                                                                           | 8,262      |                                                                        |   | $                                                    | 8,058      |                                                                        |   | $                                                           | 204    |       |   | * *                          | *2.5*      | *%*     |   | $                                         | 9,178      |        |   | $            | 7,811      |    |   | $      | 1,367     |   |   | * *     | *17.5* | *%* |   | $ | 17,440 |   |   | $ | 15,869 |   |
| Reimbursements                                    |   |                                                                        | 2,373      |                                                                        |   |                                                 | 2,421      |                                                                        |   |                                                        | (48    | )          |   | * *                          | *-2.0*     | *%*     |   |                                      |       |        |   |         |       |    |   |   | -         |   |   |         |   |   |   |   | 2,373 |   |   |   | 2,421 |   |
| Other                                             |   |                                                                        | 100        |                                                                        |   |                                                 | 21         |                                                                        |   |                                                        | 79     |       |   | * *                          | *376.2*    | *%*     |   |                                      | 84         |        |   |         | 85         |    |   |   | (1        | )      |   | * *     | *-1.2* | *%* |   |   | 184 |   |   |   | 106 |   |
| Total                    Revenue                  |   |                                                                        | 10,735     |                                                                        |   |                                                 | 10,500     |                                                                        |   |                                                        | 235    |       |   | * *                          | *2.2*      | *%*     |   |                                      | 9,262      |        |   |         | 7,896      |    |   |   | 1,366     |   |   | * *     | *17.3* | *%* |   |   | 19,997 |   |   |   | 18,396 |   |
|                                              |   |                                                                        |       |                                                                        |   |                                                 |       |                                                                        |   |                                                        |   |       |   |                              |       |    |   |                                      |       |        |   |         |       |    |   |   |      |   |   |         |   |   |   |   |   |   |   |   |   |   |
| Operating                    expenses             |   |                                                                        | 4,303      |                                                                        |   |                                                 | 4,096      |                                                                        |   |                                                        | 207    |       |   | * *                          | *5.1*      | *%*     |   |                                      | 4,253      |        |   |         | 3,916      |    |   |   | 337       |   |   | * *     | *8.6* | *%* |   |   | 8,556 |   |   |   | 8,012 |   |
| **Net                    operating income**       |   | **$**                                                                       | **6,432**  |                                                                        |   | **$**                                                | **6,404**  |                                                                        |   | **$**                                                       | **28** |       |   | *** ***                      | ***0.4***  | ***%*** |   | **$**                                     | **5,009**  |        |   | **$**        | **3,980**  |    |   | **$**  | **1,029** |   |   | *** *** | ***25.9*** | ***%*** |   | ** ** | **11,441** |   |   | ** ** | **10,384** |   |
| Average                                           |   |                                                                        |       |                                                                        |   |                                                 |       |                                                                        |   |                                                        |   |       |   |                              |       |    |   |                                      |       |        |   |         |       |    |   |   |      |   |   |         |   |   |   |   |   |   |   |   |   |   |
| Occupancy                    %                    |   | *** ***                                                                | ***89.7*** | ***%***                                                                     |   | *** ***                                         | ***90.6*** | ***%***                                                                     |   |                                                        |   |       |   | *** ***                      | ***-0.9*** | ***%*** |   | *** ***                              | ***94.3*** | ***%***     |   | *** *** | ***95.0*** | ***%*** |   |   |      |   |   | *** *** | ***-0.7*** | ***%*** |   |   |   |   |   |   |   |   |
|                                              |   |                                                                        |       |                                                                        |   |                                                 |       |                                                                        |   |                                                        |   |       |   |                              |       |    |   |                                      |       |        |   |         |       |    |   |   |      |   |   |         |   |   |   |   |   |   |   |   |   |   |

|                              | Reconciliation                    to consolidated net income:  |                                    |   |   |   |   |   |
|-----------------------------------|----------------------------------------------------------------|-----------------------------------------|--------|--------|--------|--------|--------|
|                              | Deferred                    rents - straight lining            |                                    |   | 114    |   |   |   | 171 |   |
|                              | Amortization                    of acquired leases             |                                    |   | 151    |   |   |   | 202 |   |
|                              | Net                    investment income                       |                                    |   | 225    |   |   |   | 113 |   |
|                              | General                    and administrative expenses         |                                    |   | (803   | )      |   |   | (526 | ) |
|                              | Depreciation                                              |                                    |   | (2,655 | )      |   |   | (2,267 | ) |
|                              | Financing                    costs                        |                                    |   | (6,088 | )      |   |   | (5,507 | ) |
|                              | Distributions                    to certain minority interests |                                    |   | (150   | )      |   |   | (90 | ) |
|                              | Minority                    interest                      |                                    |   | (258   | )      |   |   | (157 | ) |
| *                  Restated  |                                                           | ** Net                    income** |   | $      | 1,977  |   |   | $ | 2,323 |   |

|                                                |   |                                                                        |       |                                         |                                                                  |                                                 |       |                                                                        |   |                                                 |   |       |   |                              |       |    |   |                                        |       |        |   |         |       |    |   |   |    |   |   |         |
|-----------------------------------------------------|--------|-----------------------------------------------------------------------------|------------|----------------------------------------------|-----------------------------------------------------------------------|------------------------------------------------------|------------|-----------------------------------------------------------------------------|--------|------------------------------------------------------|--------|------------|--------|-----------------------------------|------------|---------|--------|---------------------------------------------|------------|-------------|--------|--------------|------------|---------|--------|--------|---------|--------|--------|--------------|
| **Three                    Months Ended April 30:** |   |                                                                        |       |                                         |                                                                  |                                                 |       |                                                                        |   |                                                 |   |       |   |                              |       |    |   |                                        |       |        |   |         |       |    |   |   |    |   |   |         |
|                                                |   | **Commercial**                 |       |                                         | **Residential**          |                                                 |       | **Combined**                                            |
|                                                |   | Three                    Months Ended                   |       |                                         |                                                                  |                                                 |       |                                                                        |   | Three                    Months Ended           |   |       |   |                              |       |    |   | Three                    Months Ended  |
|                                                |   | April                    30,                            |       | Increase                    (Decrease)  |                                                                  | April                    30,     |       | Increase                    (Decrease)                  |   | April                    30,     |
|                                                |   | 2007                                                                   |       | 2006                                    |                                                                  |  $                                         |       | %                                                                           |   | 2007                                            |   | 2006  |   | $                                 |       | %       |   | 2007                                   |       |  2006* |
|                                                |   | (in                    thousands)        |       |                                         |                                                                  |                                                 |       | (in                    thousands)        |   |                                                 |   |       |   | (in                    thousands) |
| Rental                    income                    |   | $                                                                           | 4,126      |                                         |                                                                  | $                                                    | 4,039      |                                                                        |   | $                                                    | 87     |       |   | * *                          | *2.2*      | *%*     |   | $                                           | 4,621      |        |   | $            | 3,921      |    |   | $      | 700     |   |   | * *     | *17.9* | *%* |   | $ | 8,747 |   |   | $ | 7,960 |   |
| Reimbursements                                      |   |                                                                        | 1,089      |                                         |                                                                  |                                                 | 1,079      |                                                                        |   |                                                 | 10     |       |   | * *                          | *0.9*      | *%*     |   |                                        |       |        |   |         |       |    |   |   | -       |   |   |         |   |   |   |   | 1,089 |   |   |   | 1,079 |   |
| Other                                               |   |                                                                        | 57         |                                         |                                                                  |                                                 | 7          |                                                                        |   |                                                 | 50     |       |   | * *                          | *714.3*    | *%*     |   |                                        | 21         |        |   |         | 41         |    |   |   | (20     | )      |   | * *     | *-48.8* | *%* |   |   | 78 |   |   |   | 48 |   |
| Total                    Revenue                    |   |                                                                        | 5,272      |                                         |                                                                  |                                                 | 5,125      |                                                                        |   |                                                 | 147    |       |   | * *                          | *2.9*      | *%*     |   |                                        | 4,642      |        |   |         | 3,962      |    |   |   | 680     |   |   | * *     | *17.2* | *%* |   |   | 9,914 |   |   |   | 9,087 |   |
|                                                |   |                                                                        |       |                                         |                                                                  |                                                 |       |                                                                        |   |                                                 |   |       |   |                              |       |    |   |                                        |       |        |   |         |       |    |   |   |    |   |   |         |   |   |   |   |   |   |   |   |   |   |
| Operating                    expenses               |   |                                                                        | 2,138      |                                         |                                                                  |                                                 | 2,021      |                                                                        |   |                                                 | 117    |       |   | * *                          | *5.8*      | *%*     |   |                                        | 1,990      |        |   |         | 1,884      |    |   |   | 106     |   |   | * *     | *5.6* | *%* |   |   | 4,128 |   |   |   | 3,905 |   |
| **Net                    operating income**         |   | **$**                                                                       | **3,134**  |                                         |                                                                  | **$**                                                | **3,104**  |                                                                        |   | **$**                                                | **30** |       |   | *** ***                      | ***1.0***  | ***%*** |   | **$**                                       | **2,652**  |        |   | **$**        | **2,078**  |    |   | **$**  | **574** |   |   | *** *** | ***27.6*** | ***%*** |   | ** ** | **5,786** |   |   | ** ** | **5,182** |   |
| Average                                             |   |                                                                        |       |                                         |                                                                  |                                                 |       |                                                                        |   |                                                 |   |       |   |                              |       |    |   |                                        |       |        |   |         |       |    |   |   |    |   |   |         |   |   |   |   |   |   |   |   |   |   |
| Occupancy                    %                      |   | *** ***                                                                | ***89.9*** | ***%***                                      |                                                                  | *** ***                                         | ***90.3*** | ***%***                                                                     |   |                                                 |   |       |   | *** ***                      | ***-0.4*** | ***%*** |   | *** ***                                | ***94.7*** | ***%***     |   | *** *** | ***95.1*** | ***%*** |   |   |    |   |   | *** *** | ***-0.4*** | ***%*** |   |   |   |   |   |   |   |   |
|                                                |   |                                                                        |       |                                         |                                                                  |                                                 |       |                                                                        |   |                                                 |   |       |   |                              |       |    |   |                                        |       |        |   |         |       |    |   |   |    |   |   |         |   |   |   |   |   |   |   |   |   |   |

|                                                  | Reconciliation                    to consolidated net income:  |                                    |   |   |   |   |   |
|-------------------------------------------------------|----------------------------------------------------------------|-----------------------------------------|--------|--------|--------|--------|--------|
|                                                  | Deferred                    rents - straight lining            |                                    |   | 59     |   |   |   | 85 |   |
|                                                  | Amortization                    of acquired leases             |                                    |   | 75     |   |   |   | 63 |   |
|                                                  | Net                    investment income                       |                                    |   | 138    |   |   |   | 65 |   |
|                                                  | General                    and administrative expenses         |                                    |   | (413   | )      |   |   | (281 | ) |
|                                                  | Depreciation                                                   |                                    |   | (1,349 | )      |   |   | (1,137 | ) |
|                                                  | Financing                    costs                        |                                    |   | (3,045 | )      |   |   | (2,772 | ) |
|                                                  | Distributions                    to certain minority interests |                                    |   | -      |   |   |   | (90 | ) |
|                                                  | Minority                    interest                      |                                    |   | (120   | )      |   |   | (80 | ) |
|                                                  |                                                           | ** Net                    income** |   | $      | 1,131  |   |   | $ | 1,035 |   |
|     *                    Restated |                                                           |                                    |   |   |   |   |   |   |   |   |

----

*Index*

|     |   |   | Six                  Months Ended April 30,       |                                                                                          |
|----------|--------|--------|---------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|
|     |   |   | 2007                                              |                                                                                          |   | 2006 |   |
|     |   |   | Residential                                                                     |                                                                                          |   | The |   |   | Same |   |   | Same |   |
| $(000)   |   |   | Properties                                                                      |                                                                                          |   | Boulders |   |   | Properties |   |   | Properties |   |
| Revenues |   |   | $                                                                               | 9,262                                                                                         |   |   | $ | 1,068 |   |   | $ | 8,194 |   |   | $ | 7,896 |   |
|     |   |   |                                                                            |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses |   |   |                                                                            | 4,253                                                                                         |   |   |   | 468 |   |   |   | 3,785 |   |   |   | 3,916 |   |
|     |   |   |                                                                            |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOI      |   |   | $                                                                               | 5,009                                                                                         |   |   | $ | 600 |   |   | $ | 4,409 |   |   | $ | 3,980 |   |
|     |   |   |                                                                            |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     |   |   |                                                                            |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     |   |   |                                                                            | Three                  Months Ended April 30,         |   |
|     |   |   |                                                                            | 2007                                                  |   |   | 2006 |   |
|     |   |   |                                                                            | Residential                                                                                   |   |   | The |   |   | Same |   |   | Same |   |
| $(000)   |   |   | Properties                                                                      |                                                                                          |   | Boulders |   |   | Properties |   |   | Properties |   |
| Revenues |   |   | $                                                                               | 4,642                                                                                         |   |   | $ | 572 |   |   | $ | 4,070 |   |   | $ | 3,962 |   |
|     |   |   |                                                                            |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses |   |   |                                                                            | 1,990                                                                                         |   |   |   | 258 |   |   |   | 1,732 |   |   |   | 1,884 |   |
|     |   |   |                                                                            |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOI      |   |   | $                                                                               | 2,652                                                                                         |   |   | $ | 314 |   |   | $ | 2,338 |   |   | $ | 2,078 |   |
|     |   |   |                                                                            |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

|                                                                     |   | Six                  Months Ended                                     |   |   | Three                  Months Ended          |   |
|--------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                                                     |   | April                  30,                             |   |   | April                  30,    |   |
|                                                                     |   | 2007                                                                  |   |   | 2006                                         |   |   | 2007 |   |   | 2006 |   |
|                                                                     |   | ($                  in thousands)       |   |
| **1st                  Mortgages**                                       |   |                                                                  |   |   |                                         |   |   |   |   |   |   |   |
|    Existing                                               |   | $                                                                     | 4,072  |   |                                         | $      | 4,336 |   |   | $ | 1,527 |   |   | $ | 2,164 |   |
|    New                  (1) - Boulders                    |   |                                                                  | 370    |   |                                         |   | 672 |   |   |   | 278 |   |   |   | 343 |   |
|    Construction                  Loan (1) - Boulders      |   |                                                                  | 161    |   |                                         |   | 155 |   |   |   | - |   |   |   | 134 |   |
| **2nd                  Mortgages**                                       |   |                                                                  |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
|    Existing                                               |   |                                                                  | 1,168  |   |                                         |   | 272 |   |   |   | 1,035 |   |   |   | 136 |   |
| Other                                                                    |   |                                                                  | 185    |   |                                         |   | 98 |   |   |   | 138 |   |   |   | 65 |   |
|                                                                     |   |                                                                  | 5,956  |   |                                         |   | 5,533 |   |   |   | 2,978 |   |   |   | 2,842 |   |
| Amortization                  of Mortgage Costs                          |   |                                                                  | 132    |   |                                         |   | 129 |   |   |   | 67 |   |   |   | 64 |   |
|                                                                     |   |                                                                  |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Financing Costs                                   |   |                                                                  | 6,088  |   |                                         |   | 5,662 |   |   |   | 3,045 |   |   |   | 2,906 |   |
|      Less                  amount capitalized   |   |                                                                  |   |   |                                         |   | (155 | ) |   |   | - |   |   |   | (134 | ) |
| Financing                  costs expensed                                |   | $                                                                     | 6,088  |   |                                         | $      | 5,507 |   |   | $ | 3,045 |   |   | $ | 2,772 |   |
|                                                                     |   |                                                                  |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
| (1)                  Mortgages not in place at beginning of fiscal 2006. |   |                                                                  |   |   |                                         |   |   |   |   |   |   |   |   |

----

*Index*

~~.~~

----

*Index*

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

|                           | April                30, | October                31, |
|--------------------------------|--------------------------|----------------------------|
| *(In                Millions)* | 2007                     | 2006                       |
| Fair                Value      | $193.8                   | $184.4                     |
| Carrying                Value  | $190.5                   | $180.7                     |

----

*Index*

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

| **Funds                  From Operations ("FFO")**       |                                                         |   |                                                                                                |   |   |                                         |   |   |   |   |   |   |
|----------------------------------------------------------|--------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                     |                                                         |   | Six                  Months Ended                                                    |   |   | Three                  Months Ended          |   |
|                                                     |                                                         |   | April                  30,                                                           |   |   | April                  30,    |   |
|                                                     |                                                         |   | 2007                                                                                                |   |   |                                         | 2006*  |   |   | 2007   |   |   |   | 2006* |   |
|                                                     |                                                         |   | ($                  in thousands)            |   |
|                                                     |                                                         |   |                                                                                                |   |   |                                         |   |   |   |   |   |   |   |   |   |
| Net                  income                              |                                                         |   | $                                                                                                   | 1,977  |   |                                         | $      | 2,323  |   |   | $      | 1,131  |   |   | $ | 1,035 |   |
| Depreciation                                             |                                                         |   |                                                                                                | 2,655  |   |                                         |   | 2,267  |   |   |   | 1,349  |   |   |   | 1,137 |   |
| Amortization                  of deferred mortgage costs |                                                         |   | 132                                                                                                 |   |   |                                         | 129    |   |   |   | 67     |   |   |   | 64 |   |
| Deferred                  rents (Straight lining)        |                                                         |   | (114                                                                                                | )      |   |                                         | (171   | )      |   |   | (59    | )      |   |   | (85 | ) |
| Amortization                  of acquired leases         |                                                         |   | (151                                                                                                | )      |   |                                         | (202   | )      |   |   | (75    | )      |   |   | (63 | ) |
| Capital                  Improvements - Apartments       |                                                         |   | (239                                                                                                | )      |   |                                         | (458   | )      |   |   | (65    | )      |   |   | (119 | ) |
| Minority                  interests:                     |                                                         |   |                                                                                                |   |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Equity                  in earnings of affiliates        |                                                         |   | 408                                                                                                 |   |   |                                         | 247    |   |   |   | 120    |   |   |   | 170 |   |
| Distributions                  to minority interests     |                                                         |   | (387                                                                                                | )      |   |                                         | (360   | )      |   |   | (87    | )      |   |   | (360 | ) |
|                                                     |                                                         |   |                                                                                                |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
|                                                     | **FFO**                                                      |   | $                                                                                                   | 4,281  |   |                                         | $      | 3,775  |   |   | $      | 2,381  |   |   | $ | 1,779 |   |
|                                                     |                                                         |   |                                                                                                |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
|                                                     | *** Per                  Share - Basic***               |   | *$*                                                                                                 | *0.63* |   |                                         | *$*    | *0.58* |   |   | *$*    | *0.35* |   |   | *$* | *0.27* |   |
|                                                     | *** Per                  Share - Diluted***             |   | *$*                                                                                                 | *0.62* |   |                                         | *$*    | *0.56* |   |   | *$*    | *0.34* |   |   | *$* | *0.26* |   |
|                                                     |                                                         |   |                                                                                                |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
|                                                     | **Weighted                  Average Shares****Outstanding:** |   |                                                                                                |   |   |                                         |
|                                                     | * Basic*                                                |   |                                                                                                | 6,751  |   |                                         |   | 6,522  |   |   |   | 6,751  |   |   |   | 6,542 |   |
|                                                     | * Diluted*                                              |   |                                                                                                | 6,916  |   |                                         |   | 6,753  |   |   |   | 6,915  |   |   |   | 6,889 |   |
|                                                     |                                                         |   |                                                                                                |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |
|  *  Restated                              |                                                         |   |                                                                                                |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |

----

*Index*

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

**Item4:      Controls and Procedures**

**Part      II:  Other Information**

**Item4:  Submission      of Matters to a Vote of Security      Holders**

|                                | **Ronald                  J. Artinian** | **Alan                  L. Aufzien** |
|-------------------------------------|-----------------------------------------|--------------------------------------|
| **Votes                  For**      | 6,056,720                               | 6,056,520                            |
| **Votes                  Withheld** | 91,100                                  | 91,300                               |

| **Name**                                | **Term                  Expires** |
|-----------------------------------------|-----------------------------------|
| Robert                  S. Hekemian     | April                  2008       |
| Donald                  W. Barney       | April                  2009       |
| Herbert                  C. Klein, Esq. | April                  2009       |

|                                 | **Additional                  Shares** | **Extending                  Plan Term** |
|--------------------------------------|----------------------------------------|------------------------------------------|
| **Votes                  For**       | 4,485,523                              | 4,484,923                                |
| **Votes                  Against**   | 345,395                                | 341,795                                  |
| **Abstain**                          | 186,928                                | 191,128                                  |
| **Broker                  Non-Vote** | 1,129,974                              | 1,129,974                                |

----

*Index*

**Item6:      Exhibits**

|                                                                                                                                                                                                           | Page   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                           |   |
| Exhibit              3.1 - Amended and Restated Declaration of              Trust (includes amendments through September 1998), with Amendments              dated January 21, 2004 and May 15, 2007 |   |
|                                                                                                                                                                                                           |   |
| Exhibit                31.1 - Section 302 Certification of Chief                Executive Officer                                                                                                              | 20     |
|                                                                                                                                                                                                           |   |
| Exhibit                31.2 - Section 302 Certification of Chief                Financial Officer                                                                                                              | 21     |
|                                                                                                                                                                                                           |   |
| Exhibit                32.1 - Certification of Chief Executive Officer                pursuant to 18 U.S.C. Section 1350                                                                                       | 22     |
|                                                                                                                                                                                                           |   |
| Exhibit                32.2 - Certification of Chief Financial Officer                pursuant to 18 U.S.C. Section 1350                                                                                       | 23     |

----

*Index*

**SIGNATURES**

|                               |                                                                                                                                                 |   |
|------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                               | **FIRST                REAL ESTATE INVESTMENT**                                                                                                 |
|                               | **                        TRUST OF NEW JERSEY**                                                              |   |
|                               |                                     (Registrant) |   |
|                               |                                                                                                                                                 |   |
| Date:                June 11, 2007 |                                                                                                                                                 |   |
|                               | /s/                Robert S. Hekemian                                                                                                                |   |
|                               | (Signature)                                                                                                                                          |   |
|                               | Robert                S. Hekemian                                                                                                                    |   |
|                               | Chairman                of the Board and Chief Executive Officer                                                                                |
|                               | (Principal                Executive Officer)                                                                                                         |   |
|                               |                                                                                                                                                 |   |
|                               |                                                                                                                                                 |   |
|                               | /s/                Donald W. Barney                                                                                                                  |   |
|                               | (Signature)                                                                                                                                          |   |
|                               | Donald                W. Barney                                                                                                                      |   |
|                               | President,                Treasurer and Chief Financial Officer                                                                                 |
|                               | (Principal                Financial/Accounting Officer)                                                                                         |
|                               |                                                                                                                                                 |   |