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**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** |
|---|-------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | New                Jersey                                                     |   | 22-1697095                                          |   |
|--------|-------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|
|   | (State                or other jurisdiction of incorporation or organization) |   | (I.R.S.                Employer Identification No.) |   |

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

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

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----

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

**INDEX**

| Part                I: Financial Information                                                                                                              |   | Page                                                                                                                                                                                                                 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                      |   |                                                                                                                                                                                                                 |   |   |
| Item                1: Unaudited Condensed Consolidated Financial Statements                                                                              |   |                                                                                                                                                                                                                 |
|                                                                                                                                                      |   |                                                                                                                                                                                                                 |   |   |
|                                                                                                                                                      | a.)    | Condensed                Consolidated Balance Sheets                as                at July 31, 2006 and October 31, 2005;                                                                                         |   | 3 |
|                                                                                                                                                      |   |                                                                                                                                                                                                                 |   |   |
|                                                                                                                                                      | b.)    | Condensed                Consolidated Statements of Income,                Comprehensive Income and Undistributed Earnings for the Nine and                Three                Months Ended July 31, 2006 and 2005; |   | 4 |
|                                                                                                                                                      |   |                                                                                                                                                                                                                 |   |   |
|                                                                                                                                                      | c.)    | Condensed                Consolidated Statements of Cash                Flows                for the Nine Months Ended July 31, 2006 and 2005;                                                                       |   | 5 |
|                                                                                                                                                      |   |                                                                                                                                                                                                                 |   |   |
|                                                                                                                                                      | d.)    | Notes                to Condensed Consolidated Financial Statements.                                                                                                                                                 |   | 6 |
|                                                                                                                                                      |   |                                                                                                                                                                                                                 |   |   |
| Item                2: Management's                Discussion and Analysis of Financial                Condition                and Results of Operations |   | 11                                                                                                                                                                                                                   |
|                                                                                                                                                      |   |                                                                                                                                                                                                                 |   |   |
| Item                3: Quantitative                and Qualitative Disclosures About Market                Risk.                                          |   | 20                                                                                                                                                                                                                   |
|                                                                                                                                                      |   |                                                                                                                                                                                                                 |   |   |
| Item                4: Controls                and Procedures.                                                                                            |   | 21                                                                                                                                                                                                                   |
|                                                                                                                                                      |   |                                                                                                                                                                                                                 |   |   |
| Part                II: Other Information                                                                                                                 |   | 21                                                                                                                                                                                                                   |
|                                                                                                                                                      |   |                                                                                                                                                                                                                 |   |   |
| Item                6: Exhibits                                                                                                                           |   |                                                                                                                                                                                                                 |

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

|                                                                                                                                                              |   | July                31,                  |    | October                31,        |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|---------|-----------------------------------|--------|
|                                                                                                                                                              |   | 2006                                     |    | 2005                              |   |
|                                                                                                                                                              |   |  (Unaudited)                        |    |  (See                Note 1) |   |
|                                                                                                                                                              |   | (In                Thousands of Dollars) |    |
| ASSETS                                                                                                                                                            |   |                                     |    |                              |   |
| Real                estate, at cost, net of accumulated depreciation                                                                                              |   | $                                        | 188,210 |                              | $      | 188,416 |   |
| Construction                in progress                                                                                                                           |   |                                     | 16,521  |                              |   | 4,770 |   |
| Cash                and cash equivalents                                                                                                                          |   |                                     | 6,083   |                              |   | 5,672 |   |
| Tenants'                security accounts                                                                                                                         |   |                                     | 2,044   |                              |   | 1,908 |   |
| Sundry                receivables                                                                                                                                 |   |                                     | 4,254   |                              |   | 4,460 |   |
| Secured                loans receivable                                                                                                                           |   |                                     | 1,658   |                              |   | 1,658 |   |
| Prepaid                expenses and other assets                                                                                                                  |   |                                     | 5,281   |                              |   | 4,198 |   |
| Deferred                charges, net                                                                                                                              |   |                                     | 3,631   |                              |   | 3,820 |   |
| Interest                rate swap contract                                                                                                                        |   |                                     | 122     |                              |   | 96 |   |
| Totals                                                                                                                                                            |   | $                                        | 227,804 |                              | $      | 214,998 |   |
|                                                                                                                                                              |   |                                     |    |                              |   |   |   |
| LIABILITIES                AND SHAREHOLDERS' EQUITY                                                                                                               |   |                                     |    |                              |   |   |   |
| Liabilities:                                                                                                                                                      |   |                                     |    |                              |   |   |   |
| Mortgages                payable                                                                                                                                  |   | $                                        | 178,552 |                              | $      | 166,874 |   |
| Notes                payable                                                                                                                                      |   |                                     | 1,500   |                              |   |   |   |
| Accounts                payable and accrued expenses                                                                                                              |   |                                     | 5,598   |                              |   | 6,288 |   |
| Dividends                payable                                                                                                                                  |   |                                     | 1,638   |                              |   | 2,916 |   |
| Tenants'                security deposits                                                                                                                         |   |                                     | 2,721   |                              |   | 2,487 |   |
| Below                market value leases and deferred revenue                                                                                                     |   |                                     | 2,028   |                              |   | 274 |   |
| Total                liabilities                                                                                                                                  |   |                                     | 192,037 |                              |   | 178,839 |   |
|                                                                                                                                                              |   |                                     |         |                              |   |   |   |
| Minority                interest                                                                                                                                  |   |                                     | 7,597   |                              |   | 7,585 |   |
|                                                                                                                                                              |   |                                     |    |                              |   |   |   |
| Commitments                and contingencies                                                                                                                      |   |                                     |    |                              |   |   |   |
|                                                                                                                                                              |   |                                     |    |                              |   |   |   |
| Shareholders'                equity:                                                                                                                              |   |                                     |    |                              |   |   |   |
| Shares                of beneficial interest without par value: 8,000,000 shares authorized;                6,552,152 and 6,481,152 shares issued and outstanding |   |                                     | 21,661  |                              |   | 21,129 |   |
| Undistributed                earnings                                                                                                                             |   |                                     | 6,387   |                              |   | 7,349 |   |
| Accumulated                other comprehensive income                                                                                                             |   |                                     | 122     |                              |   | 96 |   |
| Total                shareholders' equity                                                                                                                         |   |                                     | 28,170  |                              |   | 28,574 |   |
|                                                                                                                                                              |   |                                     |    |                              |   |   |   |
| Totals                                                                                                                                                            |   | $                                        | 227,804 |                              | $      | 214,998 |   |

*Back            To Index*

----

TA

|                                                                               |   |  Nine                Months Ended                                   |   | Three                Months Ended |   |
|------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                               |   |  July                31,                                            |   | July                31,           |   |
|                                                                               |   |  2006                                                               |   | 2005                              |   | 2006 |   | 2005 |   |
| INCOME                                                                             |   |  (In                Thousands Of Dollars, Except Per Share Amounts) |   |
| Revenue:                                                                           |   |                                                                |   |                              |   |   |   |   |   |
| Rental                income                                                       |   | $                                                                        | 24,497 |                              | $      | 21,408 |   | $ | 8,255 |   | $ | 7,180 |   |
| Reimbursements                                                                     |   |                                                                     | 3,767  |                              |   | 2,980 |   |   | 1,349 |   |   | 1,110 |   |
| Sundry                income                                                       |   |                                                                     | 183    |                              |   | 133 |   |   | 74 |   |   | 38 |   |
| Totals                                                                             |   |                                                                     | 28,447 |                              |   | 24,521 |   |   | 9,678 |   |   | 8,328 |   |
|                                                                               |   |                                                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                          |   |                                                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Operating                expenses                                                  |   |                                                                     | 7,079  |                              |   | 5,502 |   |   | 2,089 |   |   | 1,947 |   |
| Management                fees                                                     |   |                                                                     | 1,274  |                              |   | 1,089 |   |   | 445 |   |   | 376 |   |
| Real                estate taxes                                                   |   |                                                                     | 4,079  |                              |   | 3,510 |   |   | 1,360 |   |   | 1,199 |   |
| Depreciation                                                                       |   |                                                                     | 3,466  |                              |   | 3,138 |   |   | 1,199 |   |   | 1,053 |   |
| Minority                interest                                                   |   |                                                                     | 432    |                              |   | 493 |   |   | 225 |   |   | 161 |   |
| Totals                                                                             |   |                                                                     | 16,330 |                              |   | 13,732 |   |   | 5,318 |   |   | 4,736 |   |
|                                                                               |   |                                                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Operating                income                                                    |   |                                                                     | 12,117 |                              |   | 10,789 |   |   | 4,360 |   |   | 3,592 |   |
|                                                                               |   |                                                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Investment                income                                                   |   |                                                                     | 150    |                              |   | 173 |   |   | 37 |   |   | 54 |   |
| Interest                expense including amortization of deferred financing costs |   |                                                                     | (8,291 | )                                 |   | (7,327 | ) |   | (2,784 | ) |   | (2,420 | ) |
| Net                income                                                          |   | $                                                                        | 3,976  |                              | $      | 3,635 |   | $ | 1,613 |   | $ | 1,226 |   |
|                                                                               |   |                                                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Earnings                per share:                                                 |   |                                                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Basic                                                                              |   | *$*                                                                      | *0.61* |                              | *$*    | *0.57* |   | *$* | *0.25* |   | *$* | *0.19* |   |
| Diluted                                                                            |   | *$*                                                                      | *0.59* |                              | *$*    | *0.54* |   | *$* | *0.23* |   | *$* | *0.18* |   |
|                                                                               |   |                                                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding:                                |   |                                                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Basic                                                                              |   |                                                                     | 6,530  |                              |   | 6,430 |   |   | 6,548 |   |   | 6,436 |   |
| Diluted                                                                            |   |                                                                     | 6,787  |                              |   | 6,750 |   |   | 6,888 |   |   | 6,870 |   |
|                                                                               |   |                                                                     |   |                              |   |   |   |   |   |   |   |   |   |
| COMPREHENSIVE                INCOME                                                |   |                                                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Net                income                                                          |   | $                                                                        | 3,976  |                              | $      | 3,635 |   | $ | 1,613 |   | $ | 1,226 |   |
| Other                comprehensive income:                                         |   |                                                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Unrealized                gain (loss) on interest rate swap contract               |   |                                                                     | 26     |                              |   | 209 |   |   | (2 | ) |   | 45 |   |
| Comprehensive                income                                                |   | $                                                                        | 4,002  |                              | $      | 3,844 |   | $ | 1,611 |   | $ | 1,271 |   |
|                                                                               |   |                                                                     |   |                              |   |   |   |   |   |   |   |   |   |
| UNDISTRIBUTED                EARNINGS                                              |   |                                                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Balance,                beginning of period                                        |   | $                                                                        | 7,349  |                              | $      | 10,633 |   | $ | 6,413 |   | $ | 9,830 |   |
| Net                income                                                          |   |                                                                     | 3,976  |                              |   | 3,635 |   |   | 1,613 |   |   | 1,226 |   |
| Less                dividends                                                      |   |                                                                     | (4,938 | )                                 |   | (4,824 | ) |   | (1,639 | ) |   | (1,612 | ) |
| Balance,                end of period                                              |   | $                                                                        | 6,387  |                              | $      | 9,444 |   | $ | 6,387 |   | $ | 9,444 |   |
| Dividends                per share                                                 |   | *$*                                                                      | *0.75* |                              | *$*    | *0.75* |   | *$* | *0.25* |   | *$* | *0.25* |   |

*Back            To Index*

----

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

|                                                                                                            |   | 2006                                           |         | 2005   |   |
|-----------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|--------------|--------|--------|
|                                                                                                            |   |                                           |         |   |   |
| Operating                activities:                                                                            |   |  (In                Thousands of Dollars) |         |
| Net                income                                                                                       |   | $                                              | 3,976        |   | $      | 3,635 |   |
| Adjustments                to reconcile net income to net cash provided by operating                activities: |   |                                           |         |   |   |   |   |
| Depreciation                                                                                                    |   |                                           | 3,466        |   |   | 3,138 |   |
| Amortization                                                                                                    |   |                                           | 359          |   |   | 259 |   |
| Deferred                revenue                                                                                 |   |                                           | (629         | )      |   | (223 | ) |
| Minority                interest                                                                                |   |                                           | 432          |   |   | 493 |   |
| Changes                in operating assets and liabilities:                                                     |   |                                           |         |   |   |   |   |
|  Tenants'                security accounts                                                                 |   |                                           | (136         | )      |   | (20 | ) |
|  Sundry                receivables, prepaid expenses and other assets                                      |   |                                           | (352         | )      |   | (3,144 | ) |
|  Accounts                payable and accrued expenses                                                      |   |                                           | (690         | )      |   | 1,615 |   |
|  Tenants'                security deposits                                                                 |   |                                           | 234          |   |   | 205 |   |
| Net                cash provided by operating activities                                                        |   |                                           | 6,660        |   |   | 5,958 |   |
| Investing                activities:                                                                            |   |                                           |         |   |   |  |   |
| Capital                improvements - existing properties                                                       |   |                                           | (1,572       | )      |   | (2,408 | ) |
| Construction                - new properties                                                                    |   |                                           | (11,751      | )      |   |   |   |
| Contract                deposit                                                                                 |   |                                           |         |   |   | (8,390 | )(a) |
|                                                                                                            |   |                                           |    |   |   |    |   |
| Net                cash used in investing activities                                                            |   |                                           | (13,323      | )      |   | (10,798 | ) |
| Financing                activities:                                                                            |   |                                           |         |   |   |  |   |
| Repayment                of mortgages                                                                           |   |                                           | (1,414       | )      |   | (3,521 | ) |
| Construction                and other loan proceeds                                                             |   |                                           | 14,592       |   |   |   |   |
| Proceeds                from exercise of stock options                                                          |   |                                           | 532          |   |   | 195 |   |
| Dividends                paid                                                                                   |   |                                           | (6,216       | )      |   | (6,424 | ) |
| Distribution                to minority interest                                                                |   |                                           | (420         | )      |   | (558 | ) |
| Contribution                by minority interest                                                                |   |                                           |         |   |   | 5,582 |   |
| Secured                loans to minority interest                                                               |   |                                           |    |   |   | (1,658 | ) |
| Net                cash provided by (used in) financing activities                                              |   |                                           | 7,074        |   |   | (6,384 | ) |
| Net                increase (decrease) in cash and cash equivalents                                             |   |                                           | 411          |   |   | (11,224 | ) |
| Cash                and cash equivalents, beginning of period                                                   |   |                                           | 5,672        |   |   | 18,843 |   |
| Cash                and cash equivalents, end of period                                                         |   | $                                              | 6,083        |   | $      | 7,619 |   |
|                                                                                                            |   |                                           |         |   |   |  |   |
| Supplemental                disclosure of cash flow data:                                                       |   |                                           |         |   |   |   |   |
| Interest                paid                                                                                    |   | $                                              | 8,438        |   | $      | 7,200 |   |
| Income                taxes paid                                                                                |   | $                                              | 18           |   | $      | 28 |   |
| Supplemental                schedule of non cash financing activities:                                          |   |                                           |         |   |   |   |   |
| Dividends                declared but not paid                                                                  |   | $                                              | 1,638        |   | $      | 1,612 |   |

*Back            To Index*

----

EST

|                                                                 |   | Nine                Months Ended |      | Three                Months Ended |   |
|----------------------------------------------------------------------|--------|----------------------------------|-----------|-----------------------------------|--------|
|                                                                 |   | July                31,          |      | July                31,           |   |
|                                                                 |   | 2006                             |      | 2005                              |   | 2006 |   | 2005 |   |
| Basic                weighted average shares outstanding             |   |                             | 6,529,527 |                              |   | 6,429,652 |   |   | 6,547,902 |   |   | 6,436,152 |   |
|                                                                 |   |                             |      |                              |   |   |   |   |   |   |   |   |   |
| Shares                arising from assumed exercise of stock options |   |                             | 257,145   |                              |   | 320,217 |   |   | 340,734 |   |   | 433,920 |   |
|                                                                 |   |                             |      |                              |   |   |   |   |   |   |   |   |   |
| Diluted                weighted average shares outstanding           |   |                             | 6,786,672 |                              |   | 6,749,869 |   |   | 6,888,636 |   |   | 6,870,072 |   |

*Back            To Index*

----

|                                       |   | Nine                Months Ended July 31,                |         |
|--------------------------------------------|--------|----------------------------------------------------------|--------------|
|                                       |   | 2006                                                     |         | 2005 |   |
|                                       |   | No.                of Options                Outstanding |         | AverageExercisePrice |   | No.                of Options                Outstanding |   | AverageExercisePrice |   |
|                                       |   |                                                     |         |   |   |   |   |   |   |
| Balance                beginning of period |   |                                                     | 512,000      |   | $ | 7.50 |   |   | 570,000 |   | $ | 7.50 |   |
|                                       |   |                                                     |         |   |   |   |   |   |   |   |   |   |   |
| Grants                during period        |   |                                                     | -            |   |   |   |   |   | - |   |   |   |   |
|                                       |   |                                                     |         |   |   |   |   |   |   |   |   |   |   |
| Options                exercised           |   |                                                     | (71,000      | ) | $ | 7.50 |   |   | (26,000 | ) | $ | 7.50 |   |
|                                       |   |                                                     |         |   |   |   |   |   |   |   |   |   |   |
| Options                cancelled           |   |                                                     |         |   |   |   |   |   | - |   |   |   |   |
|                                       |   |                                                     |    |   |   |    |   |   |    |   |   |    |   |
| Balance                at end of period    |   |                                                     | 441,000      |   | $ | 7.50 |   |   | 544,000 |   | $ | 7.50 |   |

*Back            To Index*

----

|                                                                        |   | Nine                Months Ended         |   | Three                Months Ended |   |
|-----------------------------------------------------------------------------|--------|------------------------------------------|--------|-----------------------------------|--------|
|                                                                        |   | July                31,                  |   | July                31,           |   |
|                                                                        |   | 2006                                     |   | 2005                              |   | 2006 |   | 2005 |   |
|                                                                        |   | (in                thousands of dollars) |   |
| Real                estate revenue:                                         |   |                                     |   |                              |   |   |   |   |   |
| Commercial                                                                  |   | $                                        | 15,941 |                              | $      | 12,657 |   | $ | 5,440 |   | $ | 4,367 |   |
| Residential                                                                 |   |                                     | 11,985 |                              |   | 11,630 |   |   | 4,090 |   |   | 3,882 |   |
| Totals                                                                      |   |                                     | 27,926 |                              |   | 24,287 |   |   | 9,530 |   |   | 8,249 |   |
| Real                estate operating expenses:                              |   |                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Commercial                                                                  |   |                                     | 6,116  |                              |   | 4,211 |   |   | 2,020 |   |   | 1,431 |   |
| Residential                                                                 |   |                                     | 5,537  |                              |   | 5,158 |   |   | 1,621 |   |   | 1,794 |   |
| Totals                                                                      |   |                                     | 11,653 |                              |   | 9,369 |   |   | 3,641 |   |   | 3,225 |   |
| Net                operating income:                                        |   |                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Commercial                                                                  |   |                                     | 9,825  |                              |   | 8,446 |   |   | 3,420 |   |   | 2,936 |   |
| Residential                                                                 |   |                                     | 6,448  |                              |   | 6,472 |   |   | 2,469 |   |   | 2,088 |   |
| Totals                                                                      |   | $                                        | 16,273 |                              | $      | 14,918 |   | $ | 5,889 |   | $ | 5,024 |   |
|                                                                        |   |                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Recurring                capital improvements:                              |   |                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Residential                                                                 |   | $                                        | 942    |                              | $      | 650 |   | $ | 484 |   | $ | 221 |   |
|                                                                        |   |                                     |   |                              |   |   |   |   |   |   |   |   |   |
|                                                                        |   |                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Reconciliation                to consolidated net income:                   |   |                                     |   |                              |   |   |   |   |   |   |   |   |   |
| Segment                NOI                                                  |   | $                                        | 16,273 |                              | $      | 14,918 |   | $ | 5,889 |   | $ | 5,024 |   |
| Deferred                rents - straight-lining                             |   |                                     | 250    |                              |   | 227 |   |   | 79 |   |   | 77 |   |
| Amortization                of acquired above and below market value leases |   |                                     | 271    |                              |   |   |   |   | 69 |   |   |   |   |
| Net                investment income                                        |   |                                     | 150    |                              |   | 173 |   |   | 37 |   |   | 54 |   |
| Minority                interest in earnings of subsidiaries                |   |                                     | (432   | )                                 |   | (493 | ) |   | (225 | ) |   | (161 | ) |
| General                and administrative expenses                          |   |                                     | (779   | )                                 |   | (725 | ) |   | (253 | ) |   | (295 | ) |
| Depreciation                                                                |   |                                     | (3,466 | )                                 |   | (3,138 | ) |   | (1,199 | ) |   | (1,053 | ) |
| Financing                costs                                              |   |                                     | (8,291 | )                                 |   | (7,327 | ) |   | (2,784 | ) |   | (2,420 | ) |
| Net                income                                                   |   | $                                        | 3,976  |                              | $      | 3,635 |   | $ | 1,613 |   | $ | 1,226 |   |

*Back            To Index*

----

|                               |   | Nine                Months                Ended                7/31/05 |   | Three                Months                Ended7/31/05 |   |
|------------------------------------|--------|------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|
|                               |   | *(thousands,                except per share amounts)*                 |   |
|                               |   |                                                                   |   |                                                    |   |
| Revenues                           |   | $                                                                      | 27,196 |                                                    | $      | 9,118 |   |
| Expenses                           |   |                                                                   | 23,790 |                                                    |   | 7,958 |   |
| Net                Income          |   | $                                                                      | 3,406  |                                                    | $      | 1,160 |   |
|                               |   |                                                                   |   |                                                    |   |   |   |
| Earnings                Per Share: |   |                                                                   |   |                                                    |   |   |   |
| Basic                              |   | *$*                                                                    | *0.53* |                                                    | *$*    | *0.18* |   |
| Diluted                            |   | *$*                                                                    | *0.50* |                                                    | *$*    | *0.17* |   |
|                               |   |                                                                   |   |                                                    |   |   |   |
| Weighted                Average    |   |                                                                   |   |                                                    |   |   |   |
| Shares                Outstanding: |   |                                                                   |   |                                                    |   |   |   |
| Basic                              |   |                                                                   | 6,430  |                                                    |   | 6,438 |   |
| Diluted                            |   |                                                                   | 6,750  |                                                    |   | 6,870 |   |

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**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                turnover rates; |
|--------|--------|---------------------------------------|

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

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

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

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

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

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

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

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| Condensed                Income Statement:                                 |   |                                       |   |                              |   |   |   |   |   |
|----------------------------------------------------------------------------|--------|--------------------------------------------|--------|-----------------------------------|--------|--------|--------|--------|--------|
|                                                                       |   | Nine                Months Ended           |   | Three                Months Ended |   |
|                                                                       |   | July                31,                    |   | July                31,           |   |
|                                                                       |   | 2006                                       |   | 2005                              |   | 2006   |   | 2005   |   |
|                                                                       |   | *(in                thousands of dollars)* |   |
| Revenues:                                                                  |   |                                       |   |                              |   |   |   |   |   |
| Commercial                Revenues:                                        |   |                                       |   |                              |   |   |   |   |   |
| Same                properties (1)                                         |   | $                                          | 13,444 |                              | $      | 12,780 |   | $      | 4,553  |   | $ | 4,335 |   |
| New                properties                                              |   |                                       | 3,018  |                              |   | 111    |   |   | 1,036  |   |   | 111 |   |
| Total                Commercial                                            |   |                                       | 16,462 |                              |   | 12,891 |   |   | 5,589  |   |   | 4,446 |   |
|                                                                       |   |                                       |   |                              |   |   |   |   |   |   |   |   |   |
| Residential                Revenues:                                       |   |                                       |   |                              |   |   |   |   |   |   |   |   |   |
| Same                properties (1)                                         |   |                                       | 11,985 |                              |   | 11,630 |   |   | 4,089  |   |   | 3,882 |   |
| Total                residential                                           |   |                                       | 11,985 |                              |   | 11,630 |   |   | 4,089  |   |   | 3,882 |   |
|                                                                       |   |                                       |   |                              |   |   |   |   |   |   |   |   |   |
| Total                real estate revenues                                  |   |                                       | 28,447 |                              |   | 24,521 |   |   | 9,678  |   |   | 8,328 |   |
| Investment                income                                           |   |                                       | 150    |                              |   | 173    |   |   | 37     |   |   | 54 |   |
| Total                revenues                                              |   |                                       | 28,597 |                              |   | 24,694 |   |   | 9,715  |   |   | 8,382 |   |
|                                                                       |   |                                       |   |                              |   |   |   |   |   |   |   |   |   |
| Operating                expenses:                                         |   |                                       |   |                              |   |   |   |   |   |   |   |   |   |
| Real                estate operating expenses                              |   |                                       |   |                              |   |   |   |   |   |   |   |   |   |
| Same                properties (1)                                         |   |                                       | 13,558 |                              |   | 12,942 |   |   | 4,404  |   |   | 4,376 |   |
| New                properties                                              |   |                                       | 1,993  |                              |   | 65     |   |   | 661    |   |   | 65 |   |
| Gen'l                and administrative expenses                           |   |                                       | 779    |                              |   | 725    |   |   | 253    |   |   | 295 |   |
| Financing                costs                                             |   |                                       | 8,291  |                              |   | 7,327  |   |   | 2,784  |   |   | 2,420 |   |
| Total                expenses                                              |   |                                       | 24,621 |                              |   | 21,059 |   |   | 8,102  |   |   | 7,156 |   |
|                                                                       |   |                                       |   |                              |   |   |   |   |   |   |   |   |   |
| Net                Income                                                  |   | $                                          | 3,976  |                              | $      | 3,635  |   | $      | 1,613  |   | $ | 1,226 |   |
|                                                                       |   |                                       |   |                              |   |   |   |   |   |   |   |   |   |
| (1)                Properties operated since the beginning of fiscal 2005. |   |                                       |   |                              |   |   |

*9.4%*
*31.6%*

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|                                    |   | **Commercial**                   |       |
|-----------------------------------------|--------|----------------------------------|------------|
|                                    |   | Nine                Months Ended |       | Three                Months Ended |   |
|                                    |   | July                31,          |       | Increase                (Decrease) |   | July                31, |   | Increase                (Decrease) |   |
|                                    |   | 2006                             |       | 2005 |   | $ |   | % |   | 2006 |   | 2005 |   | $ |   | % |   |
|                                    |   | (in                thousands)    |       |   |   | (in                thousands) |   |   |   |
| Rental                income            |   | $                                | 12,141     |   | $ | 9,663 |   | $ | 2,478 |   |   | *25.6* | *% * | $ | 4,080 |   | $ | 3,257 |   | $ | 824 |   |   | *25.3* | *%* |
| Reimbursements                          |   |                             | 3,767      |   |   | 2,979 |   |   | 788 |   |   | *26.5* | *%* |   | 1,349 |   |   | 1,110 |   |   | 239 |   |   | *21.5* | *%* |
| Other                                   |   |                             | 33         |   |   | 15 |   |   | 18 |   |   | *120.0* | *%* |   | 11 |   |   | - |   |   | 11 |   |   |     |   |
| Total                Revenues           |   |                             | 15,941     |   |   | 12,657 |   |   | 3,284 |   |   | *25.9* | *%* |   | 5,440 |   |   | 4,367 |   |   | 1,074 |   |   | *24.6* | *%* |
|                                    |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                expenses       |   |                             | 6,116      |   |   | 4,211 |   |   | 1,905 |   |   | *45.2* | *%* |   | 2,020 |   |   | 1,431 |   |   | 589 |   |   | *41.2* | *%* |
|                                    |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                operating income** |   | **$**                            | **9,825**  |   | **$** | **8,446** |   | **$** | **1,379** |   |   | ***16.3*** | ***%*** | **$** | **3,420** |   | **$** | **2,936** |   | **$** | **485** |   |   | ***16.5*** | ***%*** |
| Average                                 |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Occupancy                %              |   |                             | ***90.5*** | ***%*** |   | ***92.6*** | ***%*** |   |   |   |   | ***-2.1*** | ***%*** |   | ***90.2*** | ***%*** |   | ***92.4*** | ***%*** |   |   |   |   | ***-2.2*** | ***%*** |

|                                    |   | **Residential**                  |         |
|-----------------------------------------|--------|----------------------------------|--------------|
|                                    |   | Nine                Months Ended |         | Three                Months Ended |   |
|                                    |   | July                31,          |         | Increase                (Decrease) |   | July                31, |   | Increase                (Decrease) |   |
|                                    |   | 2006                             |         | 2005 |   | $ |   | % |   | 2006 |   | 2005 |   | $ |   | % |   |
|                                    |   | (in                thousands)    |         |   |   | (in                thousands) |   |   |   |
| Rental                Revenues:         |   |                             |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Rental                income            |   | $                                | 11,835       |   | $ | 11,518 |   | $ | 317 |   |   | *2.8* | *% * | $ | 4,027 |   | $ | 3,843 |   | $ | 183 |   |   | *4.8* | *%* |
| Other                income             |   |                             | 150          |   |   | 112 |   |   | 38 |   |   | *33.9* | *%* |   | 63 |   |   | 39 |   |   | 24 |   |   | *62* | *%* |
| Total                Revenues           |   |                             | 11,985       |   |   | 11,630 |   | $ | 355 |   |   | *3.1* | *%* |   | 4,090 |   |   | 3,882 |   | $ | 207 |   |   | *5.3* | *%* |
|                                    |   |                             |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                expenses       |   |                             | 5,537        |   |   | 5,158 |   | $ | 379 |   |   | *7.3* | *%* |   | 1,621 |   |   | 1,794 |   | $ | (173 | ) |   | *-9.6* | *%* |
|                                    |   |                             |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |   |    |   |
| **Net                operating income** |   | **$**                            | **6,448**    |   | **$** | **6,472** |   | **$** | **(24** | **)** |   | ***-0.4*** | ***%*** | **$** | **2,469** |   | **$** | **2,088** |   | **$** | **380** |   |   | ***18.2*** | ***%*** |
| Average                                 |   |                             |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Occupancy                %              |   |                             | ***95.4***   | ***%*** |   | ***94.6*** | ***%*** |   |   |   |   | ***0.8*** | ***%*** |   | ***95.9*** | ***%*** |   | ***94.7*** | ***%*** |   |   |   |   | ***1.2*** | ***%*** |

|                                                                        |   | Nine                Months Ended |      |   |   |      |   | Three                Months Ended |   |   |   |   |   |
|-----------------------------------------------------------------------------|--------|----------------------------------|-----------|--------|--------|-----------|--------|-----------------------------------|--------|--------|--------|--------|--------|
|                                                                        |   | July                31,          |      |   |   |      |   | July                31,           |   |   |   |   |   |
|                                                                        |   | 2006                             |      | 2005   |   |      |   |                              |   | 2006   |   | 2005   |   |   |   |   |   |
| Reconciliation                to consolidated net income:                   |   |                             |      |   |   |      |   |                              |   |   |   |   |   |   |   |   |   |
| Segment                NOI:                                                 |   |                             |      |   |   |      |   |                              |   |   |   |   |   |   |   |   |   |
| Commercial                                                                  |   | $                                | 9,825     |   | $      | 8,446     |   |                              |        |   |   |        |   | $ | 3,420 |   | $ | 2,936 |   |   |  |   |   |  |   |
| Residential                                                                 |   |                             | 6,448     |   |   | 6,472     |   |                              |   |   |   |   |   |   | 2,469 |   |   | 2,088 |   |   |   |   |   |   |   |
| Total                                                                       |   |                             | 16,273    |   |   | 14,918    |   |                              |   |   |   |   |   |   | 5,889 |   |   | 5,024 |   |   |   |   |   |   |   |
| Deferred                rents                                               |   |                             | 250       |   |   | 227       |   |                              |   |   |   |   |   |   | 79 |   |   | 77 |   |   |   |   |   |   |   |
| Amortization                of acquired above and below market value leases |   |                             | 271       |   |   |      |   |                              |   |   |   |   |   |   | 69 |   |   |   |   |   |   |   |   |   |   |
| Net                investment income                                        |   |                             | 150       |   |   | 173       |   |                              |   |   |   |   |   |   | 37 |   |   | 54 |   |   |   |   |   |   |   |
| General                and administrative expenses                          |   |                             | (779      | )      |   | (725      | )      |                              |   |   |   |   |   |   | (253 | ) |   | (295 | ) |   |   |   |   |   |   |
| Depreciation                                                                |   |                             | (3,466    | )      |   | (3,138    | )      |                              |   |   |   |   |   |   | (1,199 | ) |   | (1,053 | ) |   |   |   |   |   |   |
| Financing                costs                                              |   |                             | (8,291    | )      |   | (7,327    | )      |                              |   |   |   |   |   |   | (2,784 | ) |   | (2,420 | ) |   |   |   |   |   |   |
| Minority                interest                                            |   |                             | (432      | )      |   | (493      | )      |                              |   |   |   |   |   |   | (225 | ) |   | (161 | ) |   |   |   |   |   |   |
| **Net                income**                                               |   | **$**                            | **3,976** |   | **$**  | **3,635** |   |                              |   |   |   |   |   | **$** | **1,613** |   | **$** | **1,226** |   |   |   |   |   |   |   |

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|                                         |   | Average                Occupancy Percentage |   |
|----------------------------------------------|--------|---------------------------------------------|--------|
|                                         |   | Nine                Months Ended            |   | Three                Months Ended |   |
|                                         |   | July                31,                     |   | July                31, |   |
|                                         |   | 2006                                        |   | 2005 |   | 2006 |   | 2005 |   |
|                                         |   |                                        |   |   |   |   |   |   |   |
| Same                operating properties     |   |                                        | *95.2* | *%* |   | *98.6* | *%* |   | *94.9* | *%* |   | *95.7* | *%* |
|                                         |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Properties                Undergoing         |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Expansion                / Renovation:       |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Damascus                Center               |   |                                        | *70.8* | *%* |   | *71.1* | *%* |   | *70.3* | *%* |   | *71.1* | *%* |
| The                Rotunda                   |   |                                        | *83.3* | *%* |   | *(a* | *)* |   | *82.9*  |  *%* |   | *(a* | *)* |
| *(a)*                Acquired July 19, 2005. |   |                                        |   |   |   |   |   |   |   |   |   |   |   |

|     |   | Nine                  Months Ended   |   |
|----------|--------|--------------------------------------|--------|
|     |   | July                  31, 2006       |   | July                  31, 2005 |   |
|     |   | *(in                  thousands)*    |   |
|     |   | Commercial                  Combined |   | Rotunda |   | Same                  Properties |   | Commercial                  Combined |   | Rotunda |   | Same                  Properties |   |
| Revenues |   | $                                    | 15,941 |   | $ | 2,694 |   | $ | 13,247 |   | $ | 12,657 |   | $ | 111 |   | $ | 12,546 |   |
| Expenses |   |                                 | 6,116  |   |   | 1,305 |   |   | 4,811 |   |   | 4,211 |   |   | 76 |   |   | 4,135 |   |
| NOI      |   | $                                    | 9,825  |   | $ | 1,389 |   | $ | 8,436 |   | $ | 8,446 |   | $ | 35 |   | $ | 8,411 |   |

|     |   | Three                  Months Ended  |   |
|----------|--------|--------------------------------------|--------|
|     |   | July                  31, 2006       |   | July                  31, 2005 |   |
|     |   | *(in                  thousands)*    |   |
|     |   | Commercial                  Combined |   | Rotunda |   | Same                  Properties |   | Commercial                  Combined |   | Rotunda |   | Same                  Properties |   |
| Revenues |   | $                                    | 5,441  |   | $ | 957 |   | $ | 4,484 |   | $ | 4,367 |   | $ | 111 |   | $ | 4,256 |   |
| Expenses |   |                                 | 2,020  |   |   | 574 |   |   | 1,446 |   |   | 1,431 |   |   | 76 |   |   | 1,355 |   |
| NOI      |   | $                                    | 3,421  |   | $ | 383 |   | $ | 3,038 |   | $ | 2,936 |   | $ | 35 |   | $ | 2,901 |   |

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*Back            To Index*

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|                                                                   |   | Nine                Months Ended |   | Three                Months Ended |   |
|------------------------------------------------------------------------|--------|----------------------------------|--------|-----------------------------------|--------|
|                                                                   |   | July                31,          |   | July                31,           |   |
|                                                                   |   | 2006                             |   | 2005                              |   | 2006 |   | 2005 |   |
|                                                                   |   | ($000)                           |   | ($000)                            |   |
| Fixed                rate mortgages                                    |   |                             |   |                              |   |   |   |   |   |
| 1st                Mortgages                                           |   |                             |   |                              |   |   |   |   |   |
| Existing                                                               |   | $                                | 6,492  |                              | $      | 6,617 |   | $ | 2,156 |   | $ | 2,228 |   |
| Prepaid                                                                |   |                             |   |                              |   | 46 |   |   | - |   |   | 0 |   |
| New                (1)                                                 |   |                             | 1,055  |                              |   |   |   |   | 383 |   |   | - |   |
| Construction                Loan (1)                                   |   |                             | 402    |                              |   |   |   |   | 247 |   |   |   |   |
| 2nd                Mortgages                                           |   |                             |   |                              |   |   |   |   |   |   |   |   |   |
| Existing                                                               |   |                             | 407    |                              |   | 403 |   |   | 135 |   |   | 125 |   |
| New                (1)                                                 |   |                             |   |                              |   |   |   |   | - |   |   | - |   |
| Other                                                                  |   |                             | 145    |                              |   | 67 |   |   | 47 |   |   | 26 |   |
|                                                                   |   |                             | 8,501  |                              |   | 7,133 |   |   | 2,968 |   |   | 2,379 |   |
| Amortization                of                                         |   |                             |   |                              |   |   |   |   |   |   |   |   |   |
| mortgage                costs                                          |   |                             | 192    |                              |   | 127 |   |   | 63 |   |   | 41 |   |
| Prepayment                fee                                          |   |                             |   |                              |   | 67 |   |   | - |   |   | - |   |
|                                                                   |   |                             |   |                              |   |   |   |   |   |   |   |   |   |
| Total                financing costs                                   |   |                             | 8,693  |                              |   | 7,327 |   |   | 3,031 |   |   | 2,420 |   |
| Less                amount capitalized                                 |   |                             | (402   | )                                 |   |   |   |   | (247 | ) |   |   |   |
| Financing                costs expensed                                |   | $                                | 8,291  |                              | $      | 7,327 |   | $ | 2,784 |   | $ | 2,420 |   |
|                                                                   |   |                             |   |                              |   |   |   |   |   |   |   |   |   |
| (1)                Mortgages not in place at beginning of fiscal 2005. |   |                             |   |                              |   |   |

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|                                    |   | *$Millions* |   | Weighted                Average                Interest |   |
|-----------------------------------------|--------|-------------|--------|---------------------------------------------------------|--------|
| Fixed                rate mortgages     |   | $           | 142.9  |                                                    |   | *6.39* | *%* |
| Variable                rate mortgages: |   |        |   |                                                    |   |   |   |
| Construction                loan        |   |        | 13.2   |                                                    |   | *6.75* | *%* |
| Acquisition                loan         |   |        | 22.5   |                                                    |   | *7.06* | *%* |
|                                    |   | $           | 178.6  |                                                    |   | *6.50* | *%* |

| Fiscal                Year                                                                                                                                 |   | $                Millions |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|--------|
| 2007                                                                                                                                                       |   | $                         | 28.8   | * |
| 2008                                                                                                                                                       |   | $                         | 28.4   |   |
| 2010                                                                                                                                                       |   | $                         | 12.3   |   |
| 2013                                                                                                                                                       |   | $                         | 8.0    |   |
| 2014                                                                                                                                                       |   | $                         | 26.1   |   |
| 2016                                                                                                                                                       |   | $                         | 24.7   |   |
| 2019                                                                                                                                                       |   | $                         | 28.3   |   |
|                                                                                                                                                       |   |                      |   |   |
| *               Includes $13.2 million of construction financing that will be              converted to long-term financing (see              above). |

|                           |   | July                31, |   | October                31, |   |
|--------------------------------|--------|-------------------------|--------|----------------------------|--------|
| *(In                Millions)* |   | 2006                    |   | 2005                       |   |
|                           |   |                    |   |                       |   |
| Fair                Value      |   | $                       | 180.6  |                       | $      | 171.9 |   |
| Carrying                Value  |   | $                       | 178.6  |                       | $      | 166.9 |   |

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*Back            To Index*

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|                                                                        |   | Nine                Months Ended                                     |       | Three                Months Ended |    |
|-----------------------------------------------------------------------------|--------|----------------------------------------------------------------------|------------|-----------------------------------|---------|
|                                                                        |   | July                31,                                              |       | July                31,           |    |
|                                                                        |   | 2006                                                                 |       | 2005                              |    | 2006 |   | 2005 |   |
|                                                                        |   | *(In                thousands of dollars, except per share amounts)* |       |
| Net                income                                                   |   | $                                                                    | 3,976      |                              | $       | 3,635 |   | $ | 1,613 |   | $ | 1,226 |   |
| Depreciation                                                                |   |                                                                 | 3,466      |                              |    | 3,138 |   |   | 1,199 |   |   | 1,053 |   |
| Amortization                of deferred mortgage costs                      |   |                                                                 | 197        |                              |    | 127 |   |   | 63 |   |   | 41 |   |
| Mortgage                prepayment penalty                                  |   |                                                                 |       |                              |    | 67 |   |   |   |   |   |   |   |
| Deferred                rents - straight-lining                             |   |                                                                 | (250       | )                                 |    | (227 | ) |   | (79 | ) |   | (77 | ) |
| Amortization                of acquired above and below market value leases |   |                                                                 | (271       | )                                 |    |   |   |   | (69 | ) |   |   |   |
| Capital                improvements- Apartments                             |   |                                                                 | (942       | )                                 |    | (650 | ) |   | (484 | ) |   | (221 | ) |
| Minority                interest:                                           |   |                                                                 |       |                              |    |   |   |   |   |   |   |   |   |
| Equity                in earnings of affiliates                             |   |                                                                 | 432        |                              |    | 493 |   |   | 225 |   |   | 161 |   |
| Distributions                to minority interest                           |   |                                                                 | (420       | )                                 |    | (558 | ) |   | (60 | ) |   | (271 | ) |
| **Funds                From Operations**                                    |   | **$**                                                                | **6,188**  |                              | **$**   | **6,025** |   | **$** | **2,408** |   | **$** | **1,912** |   |
|                                                                        |   |                                                                 |       |                              |    |   |   |   |   |   |   |   |   |
| ***Per                Share - Basic***                                      |   | ***$***                                                              | ***0.95*** |                              | ***$*** | ***0.94*** |   | ***$*** | ***0.37*** |   | ***$*** | ***0.30*** |   |
| ***Per                Share - Diluted***                                    |   | ***$***                                                              | ***0.91*** |                              | ***$*** | ***0.89*** |   | ***$*** | ***0.35*** |   | ***$*** | ***0.28*** |   |
|                                                                        |   |                                                                 |       |                              |    |   |   |   |   |   |   |   |   |
| **Weighted                Average Shares outstanding:**                     |   |                                                                 |       |                              |    |   |   |   |   |   |   |   |   |
| Basic                                                                       |   |                                                                 | 6,530      |                              |    | 6,430 |   |   | 6,548 |   |   | 6,436 |   |
| Diluted                                                                     |   |                                                                 | 6,787      |                              |    | 6,750 |   |   | 6,888 |   |   | 6,870 |   |

ITA

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NTR

forma

xhibi

Exhibit      31.1 Section 302 Certification of Chief Executive      Officer

Exhibit      31.2 Section 302 Certification of Chief Financial      Officer

Exhibit      32.1 Certification of Chief Executive Officer pursuant      to 18 U.S.C. Section 1350

Exhibit      32.2 Certification of Chief Financial Officer pursuant      to 18 U.S.C. Section 1350

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**SIGNATURES**

|                                    | **FIRST                REAL ESTATE INVESTMENT**                 |   |
|-----------------------------------------|-----------------------------------------------------------------|--------|
|                                    | **TRUST                OF NEW JERSEY**                          |   |
|                                    | (Registrant)                                                    |   |
|                                    |                                                            |   |
| Date:                September 11, 2006 |                                                            |   |
|                                    | /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)         |   |

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