SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
    SECURITIES EXCHANGE ACT OF 1934
For Quarterly period ended   April 30, 2003
                             --------------
                                       or

[ ] TRANSITION   REPORT  PURSUANT  TO  SECTION  13 OR 15 (d)  OF THE  SECURITIES
    EXCHANGE ACT OF 1934

For the transition period from                            to
                                -------------------------    ------------------.
Commission File No.: 2-27018


                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                              (I.R.S. Employer
incorporation or organization)                               Identification No.)


           505 Main Street, P.O. Box 667, Hackensack, New Jersey 07602
           -----------------------------------------------------------
               (Address of principal executive offices) (Zip Code)


         Registrant's telephone number, including area code 201-488-6400
                                                            ------------


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.
[XX]Yes [__] No

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).
[_] Yes [XX] No

As of June 13, 2003 there were 3,155,576  shares of beneficial  interest  issued
and outstanding.





<PAGE>


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

                                      INDEX
                                      -----


Part I: Financial Information

     Item 1: Unaudited Condensed Consolidated Financial Statements.

               a.)  Condensed  Consolidated  Balance Sheets as at April 30, 2003
                    and October 31, 2002;

               b.)  Condensed Consolidated  Statements of Income,  Comprehensive
                    Income  and  Undistributed  Earnings  for the Six and  Three
                    Months Ended April 30, 2003 and 2002;

               c.)  Condensed Consolidated  Statements of Cash Flows for the Six
                    Months Ended April 30, 2003 and 2002;

               d.)  Notes to Condensed Consolidated Financial Statements.

     Item 2:  Management's  Discussion  and Analysis of Financial  Condition and
          Results of Operations.

     Item 3: Quantitative and Qualitative Disclosures of Market Risk.

     Item 4: Controls and Procedures.



Part II: Other Information

     Item 4. Submission of Matters to a Vote of Security Holders.

     Item 6: Exhibits and Reports on Form 8-K.

Certifications.






<PAGE>










Item 1: Financial Statements

<TABLE>
<CAPTION>
         FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

                                                            April 30,   October 31,
                                                              2003         2002
                                                              ----         ----
                                                           (Unaudited)  (See Note 1)
                                                           -----------  ------------
                                                         (In Thousands   of Dollars)
                                                         ---------------------------
                                     ASSETS
                                     ------
<S>                                                         <C>           <C>
Real estate, at cost, net of accumulated
 depreciation                                               $ 73,933      $ 74,687
Investment in affiliates                                       2,144         3,283
Cash & cash equivalents                                       12,451        11,930
Tenants' security accounts                                       815           788
Sundry receivables                                             2,761         2,555
Prepaid expenses and other assets                              1,387         1,306
Deferred charges, net                                          1,149         1,166
                                                            --------      --------
                                    Totals                  $ 94,640      $ 95,715
                                    ------                  ========      ========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------
Liabilities:
 Mortgages payable                                          $ 67,925      $ 68,393
 Accounts payable and accrued expenses                           835           778
 Dividends payable                                             1,092         2,090
 Tenants' security deposits                                    1,127         1,122
 Deferred revenue                                                161           332
 Interest rate swap contract                                     308          --
                                                            --------      --------
                               Total liabilities              71,448        72,715
                                                            --------      --------

Minority interest                                              1,114         1,097
                                                            --------      --------

Commitments and contingencies

Shareholders' equity:
 Shares of beneficial interest without par value:
  4,000,000 shares authorized
  3,119,576 shares issued and outstanding                     19,314        19,314
 Undistributed earnings                                        3,072         2,589
 Accumulated other comprehensive loss                           (308)         --
                                                            --------      --------
                          Total shareholders' equity          22,078        21,903
                                                            --------      --------
                                    Totals                  $ 94,640      $ 95,715
                                                            ========      ========
</TABLE>

See Notes to Consolidated Financial Statements.



<PAGE>
<TABLE>
<CAPTION>
         FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
               SIX AND THREE MONTHS ENDED APRIL 30, 2003 AND 2002

                                                       Six Months               Three Months
                                                     Ended April 30,           Ended April 30,
                                                    2003        2002          2003         2002
                                                    ----        ----          ----         ----
                                                            (In Thousands of Dollars,
                                                            Except Per Share Amounts)

<S>                                               <C>          <C>           <C>          <C>
Revenue:
     Rental income                                $ 8,010      $ 7,806       $ 4,032      $ 3,922
     Reimbursements                                 1,469        1,355           805          610
     Equity in income of affiliates                   221          109           140           58
     Net Investment Income                             94          123            41           55
     Sundry income                                     99          167            43          120
                                                  -------      -------       -------      -------
                               Totals               9,893        9,560         5,061        4,765
                                                  -------      -------       -------      -------
Expenses:
     Operating expenses                             2,107        1,670         1,149          849
     Management fees                                  400          395           199          195
     Real estate taxes                              1,175        1,183           554          592
     Financing costs                                2,338        2,441         1,144        1,225
     Depreciation                                   1,067        1,071           535          536
     Minority interest                                132           92            83           45
                                                  -------      -------       -------      -------
                               Totals               7,219        6,852         3,664        3,442
                                                  -------      -------       -------      -------
Income from continuing operations
     before state income taxes                      2,674        2,708         1,397        1,323
Provision for state income taxes                        8           10             1            5
                                                  -------      -------       -------      -------
Income from continuing operations                   2,666        2,698         1,396        1,318
     Discontinued operations                           --          (24)           --           18
                                                  -------      -------       -------      -------
             Net Income                           $ 2,666      $ 2,674       $ 1,396      $ 1,336
                                                  =======      =======       =======      =======
-------------------------------------------------------------------------------------------------
Basic earnings (loss) per share:
     Earnings before discontinued operations      $  0.85      $  0.87       $  0.45      $  0.42
     Discontinued operations                           --        (0.01)           --         0.01
                                                  -------      -------       -------      -------
                                                  $  0.85      $  0.86       $  0.45      $  0.43
                                                  -------      -------       -------      -------
Diluted earnings (loss) per share:
     Earnings before discontinued operations      $  0.81      $  0.85       $  0.43      $  0.41
     Discontinued operations                           --        (0.01)           --         0.01
                                                  -------      -------       -------      -------
                                                  $  0.81      $  0.84       $  0.43      $  0.42
-------------------------------------------------------------------------------------------------
Basic weighted average shares outstanding           3,120        3,120         3,120        3,120
Diluted weighted average shares outstanding         3,277        3,178         3,284        3,188
-------------------------------------------------------------------------------------------------
</TABLE>

See Notes to Consolidated Financial Statements.




<PAGE>



         FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARY
   CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND UNDISTRIBUTED EARNINGS
               SIX AND THREE MONTHS ENDED APRIL 30, 2003 AND 2002
<TABLE>
<CAPTION>

                                                               Six Months                Three Months
                                                             Ended April 30,             Ended April 30,
                                                           2003          2002          2003          2002
                                                           ----          ----          ----          ----
                                                                    (In Thousands of Dollars)
                        COMPREHENSIVE INCOME
<S>                                                      <C>           <C>           <C>           <C>
Net income                                               $ 2,666       $ 2,674       $ 1,396       $ 1,336
Other comprehensive income (loss):
     Unrealized loss on interest rate swap contract         (308)                        (72)
                                                         -------       -------       -------       -------
Comprehensive income                                     $ 2,358       $ 2,674       $ 1,324       $ 1,336
                                                         =======       =======       =======       =======

                       UNDISTRIBUTED EARNINGS
Balance, beginning of period                             $ 2,589       $ 2,274       $ 2,767       $ 2,676
Net income                                                 2,666         2,674         1,396         1,336
Less dividends                                            (2,183)       (1,872)       (1,091)         (936)
                                                         -------       -------       -------       -------
Balance, end of period                                   $ 3,072       $ 3,076       $ 3,072       $ 3,076
                                                         =======       =======       =======       =======
Dividends per share                                      $  0.70       $  0.60       $  0.35       $  0.30
                                                         =======       =======       =======       =======
</TABLE>

See Notes to Consolidated Financial Statements.


<PAGE>


         FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    SIX MONTHS ENDED APRIL 30, 2003 AND 2002
<TABLE>
<CAPTION>
                                                                        2003           2002
                                                                        ----           ----
                                                                     (In Thousands of Dollars)
Operating activities:                                                 -----------------------
<S>                                                                  <C>            <C>
 Net Income                                                          $  2,666       $  2,674
 Adjustments to reconcile net income to net cash provided by
 operating activities:
  Depreciation and amortization                                         1,299          1,219
  Equity in income of affiliates                                         (221)          (109)
  Deferred revenue                                                          5           (229)
  Minority interest                                                       132             92
  Changes in operating assets and liabilities:
  Tenants' security accounts                                              (27)            45
  Sundry receivables, prepaid expenses and other assets                  (394)            66
  Accounts payable and accrued expenses                                    57           (156)
  Tenants' security deposits                                             (171)           (26)
                                                                     --------       --------
                      Net cash provided by operating activities         3,346          3,576
                                                                     --------       --------
Investing activities:
 Capital expenditures                                                    (421)          (270)
 Distributions from affiliate                                           1,360             40
 Marketable securities redeemed                                                          500
                                                                     --------       --------
                      Net cash provided by investing activities           939            270
                                                                     --------       --------
Financing activities:
 Repayment of mortgages                                                  (468)          (488)
 Dividends paid                                                        (3,181)        (2,433)
 Distribution to minority interest                                       (115)          (177)
                                                                     --------       --------
                        Net cash used in financing activities          (3,764)        (3,098)
                                                                     --------       --------
Net increase in cash and cash equivalents                                 521            748
Cash and cash equivalents, beginning of period                         11,930         13,187
                                                                     --------       --------
Cash and cash equivalents, end of period                             $ 12,451       $ 13,935
                                                                     ========       ========

Supplemental disclosure of cash flow data:
 Interest paid                                                       $  2,274       $  2,379
                                                                     ========       ========
 Income taxes paid                                                   $      8       $     10
                                                                     ========       ========
 Dividends declared but not paid                                     $  1,092       $    936
                                                                     ========       ========
</TABLE>

See Notes to Consolidated Financial Statements.



<PAGE>








         FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




Note 1 - Basis of presentation:
               The accompanying condensed consolidated financial statements have
               been  prepared  without  audit,  in  accordance  with  accounting
               principles generally accepted in the United States of America for
               interim  financial  statements  and  pursuant to the rules of the
               Securities   and  Exchange   Commission.   Accordingly,   certain
               information  and  footnotes  required  by  accounting  principles
               generally  accepted in the United  States of America for complete
               financial  statements  have been  omitted.  It is the  opinion of
               management that all adjustments  considered  necessary for a fair
               presentation  have been included,  and that all such  adjustments
               are of a normal recurring nature.

               The  consolidated  results  of  operations  for the six and three
               months ended April 30, 2003 are not necessarily indicative of the
               results to be expected for the full year. The unaudited condensed
               consolidated  financial  statements should be read in conjunction
               with the  consolidated  financial  statements  and related  notes
               included in FREIT's Annual Report on Form 10-K for the year ended
               October 31, 2002.

               Certain  accounts  in the 2002  financial  statements  have  been
               reclassified to conform to the current presentation.


Note 2 - Investment in Affiliates:
               Certain  investments,  where FREIT's ownership interest is 50% or
               less, but can exercise significant  influence,  are accounted for
               by the equity method.  Under the equity method,  the  investment,
               originally  recorded at cost,  is adjusted to  recognize  FREIT's
               share of the net  earnings  or losses of the  affiliates  as they
               occur. These investments include:





                                                                       Ownership
                                                                        Interest
                                                                        --------

                Westwood Hills, LLC                                        40%
                (owns a 210 unit apartment community
                in Westwood, NJ)

                Wayne PSC, LLC                                             40%
                (effective November 1, 2002 acquired
                the 323,000 +/- sq. ft. Preakness Shopping Center
                in Wayne, NJ)


          Summarized  combined  balance  sheets as at April 30, 2003 and October
          31,  2002,  and  income  statement  information  for the six and three
          months ended April 30, 2003 and 2002 of the above  affiliates that are
          accounted for using the equity method are as follows:



<PAGE>




                                                      April 30,     October 31,
                                                        2003           2002
                                                        ----           ----
                                                     (In thousands of dollars)
Balance sheet data:
Assets:
  Real estate and equipment, net                     $ 46,621       $ 13,673
  Other                                                 3,581          9,779
                                                     --------       --------
          Total assets                               $ 50,202       $ 23,452
                                                     ========       ========

Liabilities and members' equity:
Liabilities:
  Mortgage payable                                   $ 44,292       $ 14,794
  Other                                                   551            455
                                                     --------       --------
          Total liabilities                            44,843         15,249
                                                     --------       --------

Members' equity:
  Westwood Hills - deficiency                          (4,007)          (797)
  Wayne PSC equity                                      9,366          9,000
                                                     --------       --------
          Total members' equity                         5,359          8,203
                                                     --------       --------

          Total liabilities and members' equity      $ 50,202       $ 23,452
                                                     ========       ========

FREIT - Investment in affiliates equity              $  2,144       $  3,283
                                                     ========       ========


<TABLE>
<CAPTION>
                                          Six Months Ended           Three Months Ended
                                               April 30,                   April 30,
                                        ---------------------       ---------------------
                                          2003          2002          2003          2002
                                          ----          ----          ----          ----
                                                      (In thousands of dollars)
Income Statement Data:
<S>                                     <C>           <C>           <C>           <C>
Rental revenue                          $ 3,974       $ 1,570       $ 2,101       $   786
Real estate operating expenses           (1,668)         (605)         (858)         (294)
                                        -------       -------       -------       -------
          Net operating Income            2,306           965         1,243           492
Financing costs, net                     (1,389)         (507)         (710)         (253)
Depreciation                               (364)         (185)         (182)          (93)
                                        -------       -------       -------       -------
          Net income                    $   553       $   273       $   351       $   146
                                        =======       =======       =======       =======

          FREIT - Equity in income      $   221       $   109       $   140       $    58
                                        =======       =======       =======       =======
</TABLE>



          On November 1, 2002, our newly formed 40% owned affiliate,  Wayne PSC,
          LLC,  completed  the  acquisition  of the  323,000  sq. ft.  Preakness
          Shopping Center in Wayne, NJ. Total acquisition costs of $35.5 million
          (including a $1.3 million capital  improvement  reserve) were financed
          in part by a $26.5 million first  mortgage  loan, and by $9 million of
          equity  contributions  provided  pro rata by the members of Wayne PSC,
          LLC, with FREIT's contribution being $3.6 million.

          During  January 2003,  Westwood  Hill placed a second  mortgage in the
          amount of $3.4  million  on its  garden  apartment  property.  The net
          proceeds of the second  mortgage was  distributed  to its members,  of
          which FREIT received approximately $1.4 million.




<PAGE>

Note 3 - Earnings per share:
               FREIT has presented  "basic" and "diluted"  earnings per share in
               the  accompanying  statements  of income in  accordance  with the
               provisions  of Statement of Financial  Accounting  Standards  No.
               128, Earnings per Share ("SFAS 128"). Basic earnings per share is
               calculated by dividing net income by the weighted  average number
               of shares  outstanding  during each period.  The  calculation  of
               diluted  earnings per share is similar to that of basic  earnings
               per share,  except that the  denominator  is increased to include
               the number of additional  shares that would have been outstanding
               if all potentially  dilutive shares,  such as those issuable upon
               the exercise of stock  options and  warrants,  were issued during
               the period.

               In computing  diluted  earnings per share for each of the six and
               three month  periods  ended April 30, 2003 and 2002,  the assumed
               exercise of all of FREIT's  outstanding  stock options,  adjusted
               for  application  of  the  treasury  stock  method,   would  have
               increased the weighted  average  number of shares  outstanding as
               shown in the table below:
<TABLE>
<CAPTION>

                                                   Six Months Ended                 Three Months Ended
                                                       April 30,                        April 30,
                                            -------------------------------  ------------------------------
                                                 2003           2002              2003           2002
                                                 ----           ----              ----           ----
<S>                                          <C>             <C>              <C>            <C>
Basic weighted average shares
          outstanding                        3,119,576       3,119,576        3,119,576      3,119,576
Shares arising from assumed
          exercise of stock options            157,074          58,851          164,865         67,957

Dilutive weighted average shares
                                            -------------------------------  ------------------------------
          outstanding                        3,276,650       3,178,427        3,284,441      3,187,533
                                            ===============================  ==============================
</TABLE>

               Basic and  diluted  earnings  per  share,  based on the  weighted
               average  number of shares  outstanding  during each  period,  are
               comprised of ordinary income.


Note 4- Equity incentive plan:
               On September  10, 1998,  the Board of Trustees  approved  FREIT's
               Equity  Incentive Plan (the "Plan") which was ratified by FREIT's
               shareholders  on April 7,  1999,  whereby  up to  460,000  of the
               Trust's  shares of  beneficial  interest  may be  granted  to key
               personnel in the form of stock options,  restricted  share awards
               and other share-based awards.

               Upon  ratification of the Plan on April 7,1999,  the Trust issued
               377,000  stock  options  which it had  previously  granted to key
               personnel on September 10, 1998. The fair value of the options on
               the date of grant was $15 per share.  The  options,  all of which
               are  outstanding  at January 31, 2003,  are  exercisable  through
               September 2008.

               In the opinion of management,  if compensation cost for the stock
               options  granted  in 1999 had been  determined  based on the fair
               value of the  options at the grant date under the  provisions  of
               SFAS 123  using  the  Black-Scholes  option  pricing  model,  the
               Trust's  pro forma net income and pro forma  basic net income per
               share  arising  from such  computation  would  not have  differed
               materially from the corresponding historical amounts.



<PAGE>


Note 5- Segment information:

               SFAS No. 131,  "Disclosures  about  Segments of an Enterprise and
               Related   Information",   established   standards  for  reporting
               financial  information  about  operating  segments in interim and
               annual financial reports and provides for a "management approach"
               in identifying the reportable segments.

               FREIT has determined that it has two reportable segments:  retail
               properties and residential properties.  These reportable segments
               offer different products, have different types of customers,  and
               are managed separately because each requires different  operating
               strategies and management expertise.  The retail segment contains
               six separate  properties  and the  residential  segment  contains
               eight properties. The accounting policies of the segments are the
               same as those  described  in Note 1 in FREIT's  Annual  Report on
               Form 10-K.

               The chief operating  decision-making  group of the Trust's retail
               segment,  residential segment and corporate/other is comprised of
               the Board of Trustees.

               FREIT assesses and measures  segment  operating  results based on
               net operating income ("NOI").  NOI is based on operating  revenue
               and expenses directly  associated with the operations of the real
               estate properties, but excludes deferred rents (straight lining),
               depreciation,  and  financing  costs.  NOI  is not a  measure  of
               operating  results  or cash flows from  operating  activities  as
               measured  by  accounting  principles  generally  accepted  in the
               United States of America,  and is not  necessarily  indicative of
               cash available to fund cash needs and should not be considered an
               alternative to cash flows as a measure of liquidity.

               Real estate rental revenue, operating expenses, NOI and recurring
               capital  improvements for the reportable  segments are summarized
               below and reconciled to  consolidated  net income for the six and
               three months ended April 30, 2003 and 2002. Asset  information is
               not reported  since the Trust does not use this measure to assess
               performance.



<PAGE>
<TABLE>
<CAPTION>

                                            Six Months Ended          Three Months Ended
                                                April 30,                   April 30,
                                           2003          2002          2003         2002
                                           ----          ----          ----         ----
                                                      (in thousands of dollars)
Real estate revenue:
<S>                                      <C>           <C>           <C>           <C>
Retail                                   $ 6,230       $ 6,023       $ 3,199       $ 2,990
Residential                                3,253         3,118         1,641         1,576
                                         -------       -------       -------       -------
              Totals                       9,483         9,141         4,840         4,566
                                         -------       -------       -------       -------
Real estate operating expenses:
Retail                                     1,957         1,764           985           896
Residential                                1,387         1,278           669           646
                                         -------       -------       -------       -------
              Totals                       3,344         3,042         1,654         1,542
                                         -------       -------       -------       -------
Net operating income:
Retail                                     4,273         4,259         2,214         2,094
Residential                                1,866         1,840           972           930
                                         -------       -------       -------       -------
              Totals                     $ 6,139       $ 6,099       $ 3,186       $ 3,024
                                         =======       =======       =======       =======

Recurring capital improvements:
Residential                              $   167       $   125       $    63       $    46
                                         =======       =======       =======       =======

Reconciliation to consolidated
  net income:
Segment NOI                              $ 6,139       $ 6,099       $ 3,186       $ 3,024
Deferred rents - straight-lining              95           187            47            94
Net investment income                         94           123            41            55
Equity in income of affiliates               221           109           140            58
General and administrative expenses         (346)         (216)         (256)         (107)
Depreciation                              (1,067)       (1,071)         (535)         (536)
Discontinued operatons                        --           (24)           --            18
Financing costs                           (2,338)       (2,441)       (1,144)       (1,225)
Minority interest                           (132)          (92)          (83)          (45)
                                         -------       -------       -------       -------

              Net Income                 $ 2,666       $ 2,674       $ 1,396       $ 1,336
                                         =======       =======       =======       =======
</TABLE>





Note 6- Interest Rate Swap Contract:
               During  November  2002,  FREIT  negotiated  to  lower  the  fixed
               interest rate on a first mortgage  secured by its  Patchogar,  NY
               property and was offered a lower,  floating  interest rate by the
               lender. To reduce the impact of interest rate fluctuations, FREIT
               entered into an interest rate swap. In accordance  with SFAS 133,
               FREIT  recorded  a  liability  for the net  present  value of the
               increase in interest cost over the remaining terms of the debt of
               $308,000  at  April  30,   2003.   Such  amount  is  included  in
               comprehensive income.




<PAGE>







Note 7- Discontinued operations:
               On August 9, 2002, FREIT sold the Sheridan  Apartments in Camden,
               NJ for cash of $1,050,000 and recognized a gain of  approximately
               $475,000. FREIT had owned and operated the property since 1964.

               Summarized operating results included in discontinued  operations
               in the accompanying consolidated statements of income for the six
               and  three  months  ended  April  30,  2002  is  as  follows  (in
               thousands):


                                         Six Months Ended    Three Months Ended
                                          April 30, 2002       April 30, 2002
                                          --------------       --------------
                  Revenue                     $ 328                $169
                  Expenses                     (352)               (151)
                                              -----                ----
                  Net Income (Loss)           $ (24)                $18
                                              =====                ====

Note 8- Subsequent event:
               On May 23, 2003,  in  accordance  with FREIT's  Equity  Incentive
               Plan,  options to purchase 36,000 of FREIT's shares of beneficial
               interest were exercised at the option price of $15.00 per share.


                                      * * *


<PAGE>




                     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.
--------------------------------------------------------------------------------

Overview

FREIT is an equity real estate  investment  trust ("REIT") that owns a portfolio
of residential  apartment and retail properties.  Our revenues consist primarily
of fixed rental income from both of our residential and retail  properties,  and
additional  rent in the form of expense  reimbursements  derived from our income
producing  retail  properties.  We  also  receive  income  from  our  40%  owned
affiliate,  Westwood  Hills,  LLC  ("Westwood  Hills")  that owns a  residential
apartment  property,  and  beginning in fiscal  2003,  income from our 40% owned
affiliate Wayne PSC, LLC ("WaynePCS")  that owns the Preakness  shopping center.
Our policy has been to acquire real property for long-term investment.

SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES
The  Securities  and Exchange  Commission  ("SEC")  recently  issued  disclosure
guidance for "Critical Accounting Policies." The SEC defines Critical Accounting
Policies as those that require the application of  Management's  most difficult,
subjective,  or complex  judgments,  often because of the need to make estimates
about the  effect of matters  that are  inherently  uncertain  and may change in
subsequent periods.

Our discussion and analysis of our financial condition and results of operations
are based upon our consolidated  financial statements,  the preparation of which
takes into account  estimates  based on judgments  and  assumptions  that affect
certain amounts and disclosures.  Accordingly,  actual results could differ from
these estimates. The accounting policies and estimates used and outlined in Note
1 to our Consolidated Financial Statements included in our annual report on Form
10-K, have been applied  consistently as at April 30, 2003 and October 31, 2002,
and for the six and three months ended April 30, 2003 and 2002.  We believe that
the  following  accounting  policies or  estimates  require the  application  of
Management's most difficult, subjective, or complex judgments:



<PAGE>

Revenue Recognition: Base rents, additional rents based on tenants' sales volume
and  reimbursement  of the  tenants'  share of certain  operating  expenses  are
generally  recognized when due from tenants.  The straight-line basis is used to
recognize  base rents under  leases if they  provide for varying  rents over the
lease terms.  Straight-line  rents  represent  unbilled rents  receivable to the
extent  straight-line rents exceed current rents billed in accordance with lease
agreements.  Before FREIT can recognize revenue, it is required to assess, among
other things, its collectibility. If we incorrectly determine the collectibility
of revenue, our net income and assets could be overstated.

Valuation of Long-Lived  Assets:  We  periodically  assess the carrying value of
long-lived  assets whenever we determine that events or changes in circumstances
indicate  that  their  carrying  amount  may  not  be  recoverable.  When  FREIT
determines  that the carrying  value of long-lived  assets may be impaired,  the
measurement  of any  impairment  is based on a projected  discounted  cash flows
method  determined by FREIT's  management.  While we believe that our discounted
cash flow methods are  reasonable,  different  assumptions  regarding  such cash
flows may significantly affect the measurement of impairment.

In October 2001, the Financial  Accounting  Standards  Board (the "FASB") issued
Statement of Financial  Accounting  Standards ("SFAS") No. 144,  "Accounting for
the  Impairment  or Disposal of  Long-Lived  Assets."  SFAS No. 144 requires the
reporting of  discontinued  operations  to include  components of an entity that
have  either  been  disposed of or are  classified  as held for sale.  FREIT has
adopted  SFAS No.  144. On August 9, 2002 FREIT sold its  Camden,  NJ  property.
FREIT has  reclassified the net income (loss) from the operation of the property
as Discontinued  Operations for all periods presented.  The adoption of SFAS No.
144 did not have an impact on net income,  but only impacted the presentation of
this property within the consolidated statements of income.

We  feel  that  net  income  from  continuing  operations  (which  excludes  the
operations  of the  Camden  property)  is the most  significant  element  of net
income.  Accordingly,  all  references  and  comparisons  refer to  income  from
continuing  operations  unless  otherwise  stated.  All  references to per share
amounts  are on a  diluted  basis  (unless  otherwise  indicated)  and  refer to
earnings per share from continuing operations.

Results of Operations:
Six months and Quarters Ended April 30, 2003 and 2002
<TABLE>
<CAPTION>

Summary Income Statement & Component Data
                                            Six Months Ended                           Quarter Ended
                                                April 30,             Increase            April 30,         Increase
                                         ---------------------                     --------------------
                                           2003           2002       (Decrease)       2003        2002     (Decrease)
                                           ----           ----       ----------       ----        ----     ----------
Revenue                                                                       ($000)
<S>                                      <C>           <C>           <C>           <C>          <C>          <C>
  Real estate operations                 $ 9,578       $ 9,328       $   250       $ 4,880      $ 4,652      $   228
  Equity in income of affiliates             221           109           112           140           58           82
  Net investment income                       94           123           (29)           41           55          (14)
                                         -------       -------       -------       -------      -------      -------
  Total revenue                            9,893         9,560           333         5,061        4,765          296
                                         -------       -------       -------       -------      -------      -------

Expenses
  Real estate operations                   4,543         4,205           338         2,265        2,115          150
  Financing costs                          2,338         2,441          (103)        1,144        1,225          (81)
  General & administrative expenses          346           216           130           256          107          149
                                         -------       -------       -------       -------      -------      -------
     Total expenses                        7,227         6,862           365         3,665        3,447          218
                                         -------       -------       -------       -------      -------      -------
  Income from continuing operations        2,666         2,698           (32)        1,396        1,318           78
  Discontinued Operations                                  (24)           24                         18          (18)
                                         -------       -------       -------       -------      -------      -------
 Net Income                              $ 2,666       $ 2,674       $    (8)      $ 1,396      $ 1,336      $    60
                                         =======       =======       =======       =======      =======      =======
</TABLE>




<PAGE>

Revenue for the quarter ended April 30, 2003 ("Current  Quarter") increased 6.2%
to $5,061,000  from $4,765,000 for the prior year's quarter ended April 30, 2002
("Prior  Year's  Quarter").  Income from  continuing  operations for the Current
Quarter  increased  5.9% to  $1,396,000  from  $1,318,000  for the Prior  Year's
Quarter.

Income  from  continuing  operations  for the six months  ended  April 30,  2003
("Current Six Months") was $2,666,000 on revenue of $9,893,000. This compares to
income  from  continuing  operations  for the six months  ended  April 30,  2002
("Prior Year's Six Months") of $2,698,000 on revenue of $9,560,000.

The consolidated  results of operations for the six and three months ended April
30, 2003 are not  necessarily  indicative  of the results to be expected for the
full year.

REAL ESTATE OPERATIONS:
NOI as used in this discussion  reflects operating revenue and expenses directly
associated  with the  operations  of the real estate  properties,  but  excludes
straight  lining of rents,  depreciation  and financing costs (See Note 5 to the
condensed consolidated financial statements).

RETAIL SEGMENT: FREIT's retail properties consist of six (6) properties totaling
approximately  686,000 sq. ft. Four are multi-tenanted  shopping centers and two
are single tenanted stores. Their operations are summarized below:

     Retail Segment                    Six Months Ended       Three Months Ended
                                            April 30,              April 30,
                                       2003          2002      2003      2002
                                       ----          ----      ----      ----
                                               (in thousands of dollars)
     Revenues
      Minimum & Percentage Rents    $   4,697     $  4,541    $ 2,370    $2,282
      Reimbursements                    1,528        1,395        836       628
      Other                                 5           87         (7)       80
                                    ---------     --------   --------    ------
       Total Revenues                   6,230        6,023      3,199     2,990
                                    ---------     --------   --------    ------

     Operating Expenses                 1,957        1,764        985       896

                                    ---------     --------   --------    ------
       Net operating income         $   4,273     $  4,259    $ 2,214    $2,094
                                    =========     ========   ========    ======

     Average Occupancy %                 93.0%        97.3%     93.01%     97.3%
                                    =========     ========   ========    ======

Minimum and  percentage  rents at FREIT's retail  properties  increased 3.4% and
3.9% during the Current Six Months and Current Quarter respectively  compared to
the comparable prior periods. The increase in rents resulted from increased base
rents,  and rents from  tenant's that were not in occupancy for the full quarter
last year. The increase in  reimbursements  is principally  the result of higher
expenses that are passed through to tenants,  plus back billings of reimbursable
expenses.  These revenue  increases have occurred even though overall  occupancy
has fallen - see below.

The increases in operating expenses are principally weather related, with higher
snow  removal  costs  and  utility  costs  accounting  for  124% and 184% of the
increases for the Current Six Months and Current Quarter respectively.

In February  2003,  without any notice,  a major  tenant in one of our  shopping
centers closed their store and ceased paying rent and additional rent, and is in
default of both monetary and non-monetary provisions of their lease. Annual rent
and other charges from this tenant approximate $480,000 per year. As of the date
of this report  negotiations with the tenant are proceeding.  It is too early to
determine the effect to FREIT of this tenant's default.


<PAGE>

As was previously reported, Stop & Shop closed its 28,000 sq. ft. supermarket in
Westwood Plaza Shopping Center and continued  fulfilling its rental  obligations
with no plans to reopen the store.  Effective  July 31,  2002,  FREIT and Stop &
Shop  reached a Lease  Termination  Agreement.  Since this date no rent has been
received for this space. FREIT has entered into a ten-year lease with TJMaxx for
all of this space.  The terms of the lease are for market rents that will be far
in excess of the rent pursuant to the terminated  Stop & Shop lease.  The income
from this lease will increase income,  cash flow, and value. TJMaxx opened their
store for business late May 2003 and commenced paying rent.



RESIDENTIAL SEGMENT: FREIT operates seven (7) multi-family apartment communities
totaling  507  apartment  units.  The  NOI  of  our  residential  properties  is
summarized below.

     Residential Segment           Six Months Ended        Three Months Ended
                                       April 30,                April 30,
                                  2003          2002        2003         2002
                                  ----          ----        ----         ----
                                            (in thousands of dollars)

     Revenues
      Rents                       $3,218       $3,079       $1,622       $1,554
      Other                           35           39           19           22
                                  ------       ------       ------       ------
       Total Revenues              3,253        3,118        1,641        1,576
                                  ------       ------       ------       ------

     Operating Expenses            1,387        1,278          669          646

                                  ------       ------       ------       ------
       Net operating income       $1,866       $1,840       $  972       $  930
                                  ======       ======       ======       ======

     Average Occupancy %            96.2%        96.4%        96.7%        96.4%
                                  ======       ======       ======       ======

     Recurring capital
       improvements               $  167       $  125       $   63       $   46
                                  ======       ======       ======       ======




Residential  revenue has increased  4.3% and 4.1% for the Current Six Months and
Current Quarter  respectively  compared to the comparable prior periods.  Higher
monthly rents, in spite of scattered  concessions  were the principal reason for
the  increase.  Revenue is  principally  composed  of monthly  apartment  rental
income.  Total  apartment  rental  income is a factor of  occupancy  and monthly
apartment rents. For instance, at rental rates and occupancy levels at April 30,
2003,  a 1%  increase  or  decrease  in average  occupancy  will cause an annual
$66,700  increase or reduction  in revenues,  while a 1% increase or decrease in
rental  rates  will  cause an annual  $64,600  increase  or  decrease  in annual
revenues.

Average  occupancy  for the Current Six Months was down  slightly from the Prior
Year's Six Month  period,  while average  occupancy for the Current  Quarter was
slightly higher than for the Prior Year's Quarter.

During the Current Six Months and Current Quarter operating  expenses  increased
8.5% and 3.5% respectively over prior year's comparable periods. As a percentage
of revenue,  operating expenses for the Current Six Months were 42.6% of revenue
compared  to 41% for the Prior  Year's  Six  Months  period.  Increases  in snow
removal  and  utility  costs,  because of the  recent  severe  winter,  which we
experienced, were the principal reasons for the expense increase.







<PAGE>

EQUITY IN INCOME OF AFFILIATES

Prior to  October  31,  2002  FREIT  shared  in the  earnings  of its 40%  owned
affiliate, Westwood Hills which owns a 210 unit apartment community in Westwood,
NJ.  Effective  November 1, 2002,  FREIT also shares in the  earnings of its 40%
owned  affiliate,  Wayne PSC,  which  purchased  the 323,000  sq. ft.  Preakness
Shopping  Center  in  Wayne,  NJ, on  November  1,  2002.  The  following  table
summarizes the operations at these affiliates:

<TABLE>
<CAPTION>
                                           Six Months Ended       Three Months Ended
                                               April 30,              April 30,
                                          ------------------      ------------------
Income Statement Data:                     2003       2002         2003       2002
                                           ----       ----         ----       ----
                                                   (In thousands of dollars)
<S>                                       <C>        <C>          <C>       <C>
Rental revenue
  Westwood Hills                          $1,612     $1,570       $  806    $  786
  Wayne PSC                                2,362                   1,295
                                          ------     ------       ------    ------
          Total revenue                    3,974      1,570        2,101       786
                                          ------     ------       ------    ------

Real estate operating expenses
  Westwood Hills                             846        790          399       387
  Wayne PSC                                1,186                     641
                                          ------     ------       ------    ------
          Total real estate expenses       2,032        790        1,040       387
                                          ------     ------       ------    ------

Income before financing costs
  Westwood Hills                             766        780          407       399
  Wayne PSC                                1,176         --          654        --
                                          ------     ------       ------    ------
          Total income before
           financing costs                 1,942        780        1,061       399

Financing costs
  Westwood Hills                             580        507          303       253
  Wayne PSC                                  809                    407
                                          ------     ------       ------    ------
          Total financing costs            1,389        507          710       253
                                          ------     ------       ------    ------

Net income
  Westwood Hills                             186        273          104       146
  Wayne PSC                                  367         --          247        --
                                          ------     ------       ------    ------
          Net income                      $  553     $  273       $  351    $  146
                                          ======     ======       ======    ======

FREIT's share of net income               $  221     $  109       $  140    $   58
                                          ======     ======       ======    ======
Occupancy:
Westwood Hills                              96.2%      96.4%        96.7%     96.4%
                                          ------     ------       ------    ------
Wayne PSC                                   87.1%                   96.3%
                                          ------                  ------

</TABLE>

Net income at Westwood Hills fell 31.8% to $186,000 for the Current Six Months
from $273,000 for the Prior Year's Six Months. The reduction results from two
factors: 1) while revenues increased 2.7% over last year, the increase was
insufficient to cover the 7.1% increase in expenses directly related to the
severity of the recent winter and, 2) the additional financing costs during the
Current Six Months resulting from the new $3.4 million second mortgage added in
January 2003. The effect of this financing will be to add approximately $212,000
of financing costs to Westwood Hills operations in fiscal 2003. While FREIT
bears 40% of this additional financing cost, this cost will be offset by the
income FREIT earns on its share of the net financing proceeds of approximately
$1.4 million that was distributed.

On November 1, 2002, Wayne PSC closed on the acquisition of the Preakness
Shopping Center. For the Current Six Months the Net Income from the Center's
operations was $367,000. FREIT's share of this income was $147,000 (40%). During
the Current Quarter the Center's income grew as Stop and Shop, one of the major
anchors, opened its super market on February 13, 2003. This is the reason
average occupancy for the current Quarter was 96.3% compared to the Current Six
Months average occupancy of 87.1%



<PAGE>

During the Current  Quarter Wayne PSC, LLC reached an agreement with a financial
institution  to refinance its $26.5 million for $32.0  million.  The term of the
new loan will be for thirteen (13) years,  with interest fixed at 6.04%, and the
loan  will  require  interest  only  payments  for the  first  three  years  and
thereafter be amortized  over a 25-year life.  While we feel this credit will be
formalized  shortly,  it is subject to the lender's  satisfaction of appraisals,
title searches, and environmental reports. If finalized,  FREIT will receive 40%
of the net financing proceeds.


FINANCING COSTS

Financing  Costs for the Current Six Months and Current  Quarter  decreased 4.2%
and 6.6% respectively  from the comparable prior period levels.  The decrease is
principally attributable to reduced interest costs resulting from lower mortgage
balances  from normal loan  amortization  and because of FREIT's  $10.9  million
floating  rate  mortgage  (Olney)   benefiting  from  the  lower  interest  rate
environment this year compared to last year.


                                  Six Months Ended  Three Months Ended
                                      April 30,           April 30,
                                 ------------------  -----------------
                                   2003      2002      2003     2002
                                   ----      ----      ----     ----
                                         (thousands of dollars)

       Fixed rate mortgages      $ 2,142   $ 2,233   $ 1,049  $ 1,115
       Floating rate mortgage        183       203        87      107

       Other                          13         5         8        3
                                 -------   --------  -------  --------
                                 $ 2,338   $ 2,441   $ 1,144  $ 1,225
                                 =======   ========  =======  ========



Interest Rate Swap Contract

To reduce interest rate  volatility,  FREIT uses "pay fixed,  receive  floating"
interest rate swaps to convert  floating  interest rates to fixed interest rates
over the terms of certain  loans.  We enter INTO  these  swap  contracts  with a
counterparty that is usually a high-quality commercial bank.

In  essence,  we agree to pay our  Counterparty  a fixed rate of  interest  on a
dollar amount of notional  principal  (which  corresponds  to our mortgage debt)
over a term  equal to the  terms of the  mortgage  note.  Our  counterparty,  in
return,  agrees to pay us a short-term  rate of interest - generally  LIBOR - on
that same notional amount over the same term as our mortgage note.

FAS 133  requires us to  mark-to-market  fixed pay interest  rate swaps.  As the
floating  interest rate varies from  time-to-time over the term of the contract,
the value of the contract will change  upward or downward.  If the floating rate
is higher than the fixed rate the value of the  contract  goes up and there is a
gain and an asset. If the floating rate is less than the fixed rate,  there is a
loss  and a  liability.  These  gains  or  losses  will not  affect  our  income
statement. Changes in the fair value of these swap contracts will be reported in
earnings of other  comprehensive  income and appear in the equity section of our
balance sheet.

This gain or loss  represents the economic  consequence of liquidating our fixed
rate swap  contracts and replacing  them with  like-duration  funding at current
market rates, something we'd likely never do.




<PAGE>

GENERAL AND ADMINISTRATIVE EXPENSES

Our G & A expenses for the Current Six Months and Current  Quarter  increased by
$130,000 and $149,000 respectively over the prior year's comparable periods. The
increase was due to increases in FREIT's  officers and  Trustee's  fees approved
during the second quarter of fiscal 2003 and applied  retroactively  to November
1, 2002.


LIQUIDITY AND CAPITAL RESOURCES

Our financial  condition  remains  strong.  Below are the cash flows provided by
(used in) operating, investing, and financing activities:

                                        ----------------------------------
       (Amounts in thousands)           For The Six Months Ended April 30,
                                        ----------------------------------
                                              2003             2002
                                              ----             ----

       Operating activities                 $  3,346        $  3,576
                                            ========        ========
       Investing activities                 $    939        $    270
                                            ========        ========
       Financing activities*                $(3,764)        $ (3,098)
                                            ========        ========

       * Including dividends paid of $3,181,000 and $2,433,000 respectively.
       -------------------------------------------------------------------------


We expect that cash provided by operating  activities  will be adequate to cover
mandatory debt service payments,  recurring  capital  improvements and dividends
necessary to retain qualification as a REIT (90% of taxable income).

As at April 30, 2003, we had cash and cash  equivalents  totaling  $12.5 million
compared  to $11.9  million at  October  31,  2002.  During  January  2003 FREIT
received approximately $1.4 million as a distribution from Westwood Hills as its
share of Westwood  Hills second  mortgage  financing  proceeds.  These funds are
available for construction, property acquisitions, and general needs.

As previously reported, we are planning the construction of 129 apartment rental
units in Rockaway,  NJ. The total capital required for this project is estimated
at $13.8 million.  We expect to finance these costs, in part, from  construction
and mortgage  financing and, in part, from funds available in our  institutional
money market investment.


At April 30, 2003 FREIT's aggregate outstanding mortgage debt was $67.9 million.
Approximately  $57.0 million  bears a fixed  weighted  average  interest rate of
6.749%, and an average life of approximately 7.2 years.

Approximately $10.9 million of mortgage debt bears an interest rate equal to 175
basis points over LIBOR and resets at our option  every 30, 60 or 90 days.  This
mortgage  note, due at the end of March 2003, has been extended for three months
pending the completion of negotiations for a permanent extension. Our lender has
proposed  an  extension  of the due date to June 2006,  with  interest  to reset
monthly at 200 basis  points over the  one-month  LIBOR.  Monthly  amoritization
payments to be fixed at $15,000.  At our option we can, at any time,  enter into
an interest rate swap and fix the interest rate.

Our mortgages  are subject to  amortization  schedules  that are longer than the
term of the mortgages.  As such,  balloon payments for all mortgage debt will be
required as follows  (including  the  variable  rate  mortgage  at the  proposed
terms):




<PAGE>

                             Fiscal Year $ Millions
                             ----------- ----------
                              2006       $   10.0
                              2007       $   15.7
                              2008       $    5.9
                              2010       $    9.2
                              2013       $    8.0
                              2014       $    9.4


The first mortgages  secured by our  affiliates,  properties are also subject to
amoritization  schedules  that are longer  than the terms of the  mortgages.  As
such, ballon payments on our affiliates mortgage will be required as follows:

                   $ Millions
                   -----------
             2012     $20.3
             2014     $13.8


The  following  table shows the estimated  fair value and carrying  value of our
long-term debt at April 30, 2003 and October 31, 2002:

                                April 30,       October 31,
             (In Millions)           2003             2002
             -------------           ----             ----

             Fair Value             $72.7            $73.5
             Carrying Value         $67.9            $68.4

Fair values are estimated  based on market  interest rates at April 30, 2003 and
October 31, 2002 and on discounted cash flow analysis. Changes in assumptions or
estimation methods may significantly affect these fair value estimates.

FREIT expects to re-finance  the  individual  mortgages  with new mortgages when
their terms expire. To this extent we have exposure to interest rate risk on our
fixed rate debt  obligations.  If  interest  rates,  at the time any  individual
mortgage note is due, are higher than the current fixed  interest  rate,  higher
debt service may be required,  and/or re-financing proceeds may be less than the
amount of mortgage debt being retired.  For example, a one percent interest rate
increase  would  reduce  the Fair Value of our debt by $3.1  million,  and a one
percent decrease would increase the Fair Value by $3.3 million.

Additionally,  we have exposure on our floating rate debt. A one percent  change
in  rates,  up or down,  will  decrease  or  increase  income  and cash  flow by
approximately $109,000.

We  believe  that the  values of our  properties  will be  adequate  to  command
re-financing  proceeds  equal  to,  or  higher  than  the  mortgage  debt  to be
re-financed.  We  continually  review our debt levels to determine if additional
debt can prudentially be utilized for property acquisition additions to our real
estate portfolio that will increase income and cash flow to shareholders.

To create additional liquidity and lock in favorable long-term interest rates we
continue to take  advantage  of the Freddie Mac second  mortgage  program.  This
program  allows  add-ons to existing  Freddie Mac first  mortgages to the extent
justified  by  increased  values and cash flows.  Accordingly,  we have  reached
agreement  with  Freddie  Mac  to  place  second  mortgage  on  several  of  our
residential  properties.  The new second  mortgages,  which are expected to fund
within  the next  sixty  days,  will  aggregate  about $7  million at an average
interest rate of 5.59% and will be due to  co-terminus  with the existing  first
mortgages.

FREIT also has the ability to draw, if needed, against it $14 million,  two-year
revolving  line of credit.  To date, no draws have been made against this credit
line.

See "EQUITY IN INCOME OF AFFILIATES"  above for additional  potential  liquidity
from a Wayne PSC, LLC refinancing.

On May 23, 2003, in accordance with FREIT's Equity  Incentive  Plan,  options to
purchase  36,000 of FREIT's shares of beneficial  interest were exercised at the
option  price of $15.00  per  share.  Accordingly,  FREIT  issued the shares and
received payment of $540,000.

INFLATION

Inflation can impact the  financial  performance  of FREIT in various ways.  Our
retail tenant leases normally  provide that the tenants bear all or a portion of
most operating expenses,  which can reduce the impact of inflationary  increases
on FREIT.  Apartment leases are normally for a one-year term, which may allow us
to seek increased rents as leases renew or when new tenants are obtained.




<PAGE>

Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See "Liquidity and Capital Resources" above.



Item 4: Controls and Procedures

Within the ninety (90) days prior to the filing date of this quarterly report on
Form 10-Q, we carried out an evaluation of the  effectiveness  of the design and
operation of FREIT's  disclosure  controls and  procedures.  This evaluation was
carried out under the supervision and with participation of FREIT's  management,
including  FREIT's  Chairman  and Chief  Executive  Officer and Chief  Financial
Officer,  who concluded  that FREIT's  disclosure  controls and  procedures  are
effective.  There have been no significant  changes in FREIT's internal controls
or  in  other  factors,  which  could  significantly  affect  internal  controls
subsequent to the date we carried out our evaluation.

Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that information  required to be disclosed in FREIT's reports
filed or submitted  under the Exchange Act is recorded,  processed,  summarized,
and  reported,  within the time periods  specified in the SEC's rules and forms.
Disclosure  controls and procedures include,  without  limitation,  controls and
procedures  designed to ensure that  information  required  to be  disclosed  in
FREIT's reports filed under the Exchange Act is accumulated and  communicated to
management,  including  FREIT's  Chief  Executive  Officer  and Chief  Financial
Officer as appropriate, to allow timely decisions regarding required disclosure.


Part II Other Information

Item 4: Submission of Matters to a Vote of Security Holders.

The  following  matter was  submitted  to a vote of security  holders at FREIT's
Annual Meeting of Shareholders held on April 15, 2003.

The  shareholders  re-elected  Mr.  Herbert C. Klein to serve as Trustee  for an
additional three (3) year term. The balloting for election was as follows:

           NOMINEE        VOTES FOR       % OF        VOTES       ABSTAINED
                                       OUTSTANDING    WITHHELD
       ----------------   ---------    -----------    --------    ----------
       Herbert C. Klein   2,526,378        81%         21,466      571,732
       ----------------   ---------    -----------    --------    ----------


Item 6. Exhibits and Reports on Form 8-K

         NONE


                                  Exhibit Index

        Exhibit 99.1 Certification of Chief Executive Officer
        -----------------------------------------------------

        Exhibit 99.2 Certification of Chief Financial Officer
        -----------------------------------------------------



<PAGE>

                                   SIGNATURES
                                   ----------

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                            FIRST REAL ESTATE INVESTMENT
                              TRUST  OF  NEW  JERSEY
                              ----------------------
                                  (Registrant)

Date: June 16, 2003
                             /s/ Robert S. Hekemian
                             ----------------------
                                    (Signature)
                                 Robert S. Hekemian.
                            Chairman of the Board and Chief Executive Officer


                            /s/ Donald W. Barney
                            --------------------
                                (Signature)
                            Donald W. Barney
                            President, Treasurer and Chief Financial Officer
                            (Principal Financial/Accounting Officer)