UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549








FORM
10-Q





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




For
the Quarterly Period Ended January 31, 2009


or


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




Commission
File No. 000-25043




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





201-488-6400(Registrant's
      telephone number, including area code)(Former
      name, former address and former fiscal year, if changed since last
      report)












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





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):




Large
      Accelerated Filer o
            Accelerated
      Filer x
            Non-Accelerated
      Filer o                
                Smaller
      Reporting Company o




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


o x





As of
March 12, 2009, the number of shares of beneficial interest outstanding was
6,942,232














FIRST REAL ESTATE INVESTMENT
TRUST OF NEW JERSEY







INDEX





Part I:  Financial InformationPageItem 1:
                    Unaudited Condensed Consolidated Financial
      Statementsa.)
                    Condensed Consolidated Balance Sheets as at January 31, 2009
      and October 31, 2008;
                    3b.)
                    Condensed Consolidated Statements of Income and Undistributed
      Earnings (Deficit) for the Three Months Ended January 31, 2009 and
      2008;
                    4c.)
                    Condensed Consolidated Statements of Cash Flows for the Three
      Months Ended January 31, 2009 and 2008;
                    5d.)
                    Notes to Condensed Consolidated Financial
      Statements.
                    6Item 2:
                    Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
                    9Item 3:
                    Quantitative and Qualitative Disclosures About Market
      Risk
                    17Item 4:
                    Controls and Procedures
                    17Part II: Other InformationItem 1A:
                    Risk Factors
                    17Item 2:
                    Unregistered Sales of Equity Securities and Use of
      Proceeds
                    17Item 6:
                    Exhibits
                    18Signatures
                    19








Page
2
 Index








Part
I:  Financial Information





Item
1:  Unaudited Condensed Consolidated Financial
Statements




FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND
      SUBSIDIARIESCONDENSED
      CONSOLIDATED BALANCE SHEETS(Unaudited)
                                                                                      
                                                                                      
                                                                                      (Audited)January
      31,
                                                                                      
                                                                                      
                                                                                      October
      31,2009
                                                                                      
                                                                                      
                                                                                      2008(In
      Thousands of Dollars)ASSETSReal
      estate, at cost, net of accumulated depreciation
                                                                                      
                                                                                      $
                                                                                      208,673
                                                                                      
                                                                                      
                                                                                      $
                                                                                      208,955Construction
      in progress
                                                                                      
                                                                                      
                                                                                      8,518
                                                                                      
                                                                                      
                                                                                      
                                                                                      8,058Cash
      and cash equivalents
                                                                                      
                                                                                      
                                                                                      8,028
                                                                                      
                                                                                      
                                                                                      
                                                                                      8,192Tenants'
      security accounts
                                                                                      
                                                                                      
                                                                                      2,315
                                                                                      
                                                                                      
                                                                                      
                                                                                      2,377Sundry
      receivables
                                                                                      
                                                                                      
                                                                                      4,555
                                                                                      
                                                                                      
                                                                                      
                                                                                      4,371Secured
      loans receivable
                                                                                      
                                                                                      
                                                                                      3,326
                                                                                      
                                                                                      
                                                                                      
                                                                                      3,326Prepaid
      expenses and other assets
                                                                                      
                                                                                      
                                                                                      2,619
                                                                                      
                                                                                      
                                                                                      
                                                                                      2,952Acquired
      over market leases and in-place lease costs
                                                                                      
                                                                                      
                                                                                      815
                                                                                      
                                                                                      
                                                                                      
                                                                                      865Deferred
      charges, net
                                                                                      
                                                                                      
                                                                                      2,661
                                                                                      
                                                                                      
                                                                                      
                                                                                      2,660Totals
                                                                                      
                                                                                      $
                                                                                      241,510
                                                                                      
                                                                                      
                                                                                      $
                                                                                      241,756LIABILITIES AND SHAREHOLDERS'
      EQUITYLiabilities:Mortgages
      payable
                                                                                      
                                                                                      $
                                                                                      192,340
                                                                                      
                                                                                      
                                                                                      $
                                                                                      192,352Accounts
      payable and accrued expenses
                                                                                      
                                                                                      
                                                                                      4,209
                                                                                      
                                                                                      
                                                                                      
                                                                                      4,014Dividends
      payable
                                                                                      
                                                                                      
                                                                                      2,084
                                                                                      
                                                                                      
                                                                                      
                                                                                      2,084Tenants'
      security deposits
                                                                                      
                                                                                      
                                                                                      3,004
                                                                                      
                                                                                      
                                                                                      
                                                                                      3,061Acquired
      below market value leases and deferred revenue
                                                                                      
                                                                                      
                                                                                      3,433
                                                                                      
                                                                                      
                                                                                      
                                                                                      3,485Total
      liabilities
                                                                                      
                                                                                      
                                                                                      205,070
                                                                                      
                                                                                      
                                                                                      
                                                                                      204,996Minority
      interest
                                                                                      
                                                                                      
                                                                                      13,442
                                                                                      
                                                                                      
                                                                                      
                                                                                      13,199Commitments
      and contingenciesShareholders'
      equity:Shares
      of beneficial interest without par value:8,000,000
      shares authorized;6,993,152
      and 6,993,152 shares issued and outstanding
                                                                                      
                                                                                      
                                                                                      24,969
                                                                                      
                                                                                      
                                                                                      
                                                                                      24,969Treasury
      stock, at cost: 46,720 shares
                                                                                      
                                                                                      
                                                                                      (1,075
                                                                                      )
                                                                                      
                                                                                      
                                                                                      (1,075
                                                                                      )Deficit
                                                                                      
                                                                                      
                                                                                      (896
                                                                                      )
                                                                                      
                                                                                      
                                                                                      (333
                                                                                      )Total
      shareholders' equity
                                                                                      
                                                                                      
                                                                                      22,998
                                                                                      
                                                                                      
                                                                                      
                                                                                      23,561Totals
                                                                                      
                                                                                      $
                                                                                      241,510
                                                                                      
                                                                                      
                                                                                      $
                                                                                      241,756See
      Notes to Condensed Consolidated Financial Statements.





Page
3
 Index


FIRST
      REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND
      SUBSIDIARIESCONDENSED
      CONSOLIDATED STATEMENTS OF INCOMEAND
      UNDISTRIBUTED EARNINGS (DEFICIT)THREE
      MONTHS ENDED JANUARY 31, 2009 AND 2008(Unaudited)Three
      Months EndedJanuary
      31,2009
                                                                                    
                                                                                    
                                                                                    2008(In
      Thousands of Dollars, Except Per Share Amounts)Revenue:Rental
      income
                                                                                    
                                                                                    $
                                                                                    9,192
                                                                                    
                                                                                    
                                                                                    $
                                                                                    8,980Reimbursements
                                                                                    
                                                                                    
                                                                                    1,405
                                                                                    
                                                                                    
                                                                                    
                                                                                    1,385Sundry
      income
                                                                                    
                                                                                    
                                                                                    152
                                                                                    
                                                                                    
                                                                                    
                                                                                    92Totals
                                                                                    
                                                                                    
                                                                                    10,749
                                                                                    
                                                                                    
                                                                                    
                                                                                    10,457Expenses:Operating
      expenses
                                                                                    
                                                                                    
                                                                                    2,700
                                                                                    
                                                                                    
                                                                                    
                                                                                    2,925Management
      fees
                                                                                    
                                                                                    
                                                                                    463
                                                                                    
                                                                                    
                                                                                    
                                                                                    456Real
      estate taxes
                                                                                    
                                                                                    
                                                                                    1,592
                                                                                    
                                                                                    
                                                                                    
                                                                                    1,446Depreciation
                                                                                    
                                                                                    
                                                                                    1,474
                                                                                    
                                                                                    
                                                                                    
                                                                                    1,338Totals
                                                                                    
                                                                                    
                                                                                    6,229
                                                                                    
                                                                                    
                                                                                    
                                                                                    6,165Operating
      income
                                                                                    
                                                                                    
                                                                                    4,520
                                                                                    
                                                                                    
                                                                                    
                                                                                    4,292Investment
      income
                                                                                    
                                                                                    
                                                                                    79
                                                                                    
                                                                                    
                                                                                    
                                                                                    159Interest
      expense including amortizationof
      deferred financing costs
                                                                                    
                                                                                    
                                                                                    (2,715
                                                                                    )
                                                                                    
                                                                                    
                                                                                    (2,933
                                                                                    )Minority
      interest
                                                                                    
                                                                                    
                                                                                    (363
                                                                                    )
                                                                                    
                                                                                    
                                                                                    (115
                                                                                    )Net
      Income
                                                                                    
                                                                                    $
                                                                                    1,521
                                                                                    
                                                                                    
                                                                                    $
                                                                                    1,403Earnings
      per share:Basic
                                                                                    
                                                                                    $
                                                                                    0.22
                                                                                    
                                                                                    
                                                                                    $
                                                                                    0.21Diluted
                                                                                    
                                                                                    $
                                                                                    0.22
                                                                                    
                                                                                    
                                                                                    $
                                                                                    0.20Weighted
      average shares outstanding:Basic
                                                                                    
                                                                                    
                                                                                    6,946
                                                                                    
                                                                                    
                                                                                    
                                                                                    6,763Diluted
                                                                                    
                                                                                    
                                                                                    6,946
                                                                                    
                                                                                    
                                                                                    
                                                                                    6,906UNDISTRIBUTED EARNINGS
      (DEFICIT)Balance,
      beginning of period
                                                                                    
                                                                                    $
                                                                                    (333
                                                                                    )
                                                                                    
                                                                                    $
                                                                                    1,891Net
      income
                                                                                    
                                                                                    
                                                                                    1,521
                                                                                    
                                                                                    
                                                                                    
                                                                                    1,403Less
      dividends declared
                                                                                    
                                                                                    
                                                                                    (2,084
                                                                                    )
                                                                                    
                                                                                    
                                                                                    (2,034
                                                                                    )Balance,
      end of period
                                                                                    
                                                                                    $
                                                                                    (896
                                                                                    )
                                                                                    
                                                                                    $
                                                                                    1,260Dividends
      declared per share
                                                                                    
                                                                                    $
                                                                                    0.30
                                                                                    
                                                                                    
                                                                                    $
                                                                                    0.30See
      Notes to Condensed Consolidated Financial Statements.





Page
4
 Index




FIRST
      REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND
  SUBSIDIARIESCONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWSTHREE
      MONTHS ENDED JANUARY 31, 2009 AND 2008(Unaudited)Three
      Months EndedJanuary
      31,2009
                                                                                  
                                                                                  
                                                                                  2008(In
      Thousands of Dollars)Operating
      activities:Net
      income
                                                                                  
                                                                                  $
                                                                                  1,521
                                                                                  
                                                                                  
                                                                                  $
                                                                                  1,403Adjustments
      to reconcile net income to net cash provided byoperating
      activities:Depreciation
                                                                                  
                                                                                  
                                                                                  1,474
                                                                                  
                                                                                  
                                                                                  
                                                                                  1,338Amortization
                                                                                  
                                                                                  
                                                                                  118
                                                                                  
                                                                                  
                                                                                  
                                                                                  176Net
      amortization of acquired leases
                                                                                  
                                                                                  
                                                                                  9
                                                                                  
                                                                                  
                                                                                  
                                                                                  (24
                                                                                  )Deferred
      revenue
                                                                                  
                                                                                  
                                                                                  (29
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (59
                                                                                  )Minority
      interest
                                                                                  
                                                                                  
                                                                                  363
                                                                                  
                                                                                  
                                                                                  
                                                                                  115Changes
      in operating assets and liabilities:Tenants'
      security accounts
                                                                                  
                                                                                  
                                                                                  62
                                                                                  
                                                                                  
                                                                                  
                                                                                  2Sundry
      receivables, prepaid expenses and other assets
                                                                                  
                                                                                  
                                                                                  30
                                                                                  
                                                                                  
                                                                                  
                                                                                  515Accounts
      payable, accrued expenses and other liabilities
                                                                                  
                                                                                  
                                                                                  (35
                                                                                  )
                                                                                  
                                                                                  
                                                                                  819Tenants' security deposits
                                                                                  
                                                                                  
                                                                                  (57
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (64
                                                                                  )Net
      cash provided by operating activities
                                                                                  
                                                                                  
                                                                                  3,456
                                                                                  
                                                                                  
                                                                                  
                                                                                  4,221Investing
      activities:Capital
      improvements - existing properties
                                                                                  
                                                                                  
                                                                                  (815
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (331
                                                                                  )Construction
      and pre development costs
                                                                                  
                                                                                  
                                                                                  (547
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (3,315
                                                                                  )Net
      cash used in investing activities
                                                                                  
                                                                                  
                                                                                  (1,362
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (3,646
                                                                                  )Financing
      activities:Repayment
      of mortgages
                                                                                  
                                                                                  
                                                                                  (576
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (575
                                                                                  )Proceeds
      from mortgages and construction loans
                                                                                  
                                                                                  
                                                                                  516
                                                                                  
                                                                                  
                                                                                  
                                                                                  -Deferred
      financing costs
                                                                                  
                                                                                  
                                                                                  6
                                                                                  
                                                                                  
                                                                                  
                                                                                  (40
                                                                                  )Proceeds
      from exercise of stock options
                                                                                  
                                                                                  
                                                                                  -
                                                                                  
                                                                                  
                                                                                  
                                                                                  139Dividends
      paid
                                                                                  
                                                                                  
                                                                                  (2,084
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (2,704
                                                                                  )Distribution
      to minority interest
                                                                                  
                                                                                  
                                                                                  (120
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (327
                                                                                  )Net
      cash used in financing activities
                                                                                  
                                                                                  
                                                                                  (2,258
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (3,507
                                                                                  )Net
      decrease in cash and cash equivalents
                                                                                  
                                                                                  
                                                                                  (164
                                                                                  )
                                                                                  
                                                                                  
                                                                                  (2,932
                                                                                  )Cash
      and cash equivalents, beginning of period
                                                                                  
                                                                                  
                                                                                  8,192
                                                                                  
                                                                                  
                                                                                  
                                                                                  12,740Cash
      and cash equivalents, end of period
                                                                                  
                                                                                  $
                                                                                  8,028
                                                                                  
                                                                                  
                                                                                  $
                                                                                  9,808Supplemental
      disclosure of cash flow data:Interest
      paid, including capitalized construction period interestof
      $55 and $86 in fiscal 2009 and 2008, respectively.
                                                                                  
                                                                                  $
                                                                                  2,591
                                                                                  
                                                                                  
                                                                                  $
                                                                                  2,890Income
      taxes paid
                                                                                  
                                                                                  $
                                                                                  -
                                                                                  
                                                                                  
                                                                                  $
                                                                                  -Supplemental
      schedule of non cash financing activities:Accrued capital expenditures, construction costs, pre-development costs
      and interest
                                                                                  
                                                                                  $
                                                                                  278
                                                                                  
                                                                                  
                                                                                  $
                                                                                  131Dividends
      declared but not paid
                                                                                  
                                                                                  $
                                                                                  2,084
                                                                                  
                                                                                  
                                                                                  $
                                                                                  2,034See
      Notes to Condensed Consolidated Financial Statements.


Page
5
 Index




FIRST
REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARIES


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)











Note 1 -
Basis of presentation:




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




The
consolidated results of operations for the three months ended January 31, 2009
are not necessarily indicative of the results to be expected for the full year.
The unaudited condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and related notes
included in the Annual Report on Form 10-K for the year ended October 31, 2008
of First Real Estate Investment Trust of New Jersey (“FREIT”).





Note 2 -
Earnings per share:




Basic
earnings per share is calculated by dividing net income by the weighted average
number of shares outstanding during each period (denominator). The calculation
of diluted earnings per share is similar to that of basic earnings per share,
except that the denominator is increased to include the number of additional
shares that would have been outstanding if all potentially dilutive shares, such
as those issuable upon the exercise of stock options and warrants, were issued
during the period.




In
computing diluted earnings per share for the three month period ended January
31, 2009 and 2008, the assumed exercise of all of FREIT’s outstanding stock
options, adjusted for application of the treasury stock method, would have
increased the weighted average number of shares outstanding as shown in the
table below.




Three
      Months EndedJanuary
      31,2009
                                
                                
                                2008Basic
      weighted average shares outstanding
                                
                                
                                6,946,432
                                
                                
                                
                                6,762,663Shares
      arising from assumed exercise of stock options
                                
                                
                                -
                                
                                
                                
                                142,982Dilutive
      weighted average shares outstanding
                                
                                
                                6,946,432
                                
                                
                                
                                6,905,645





Basic and
diluted earnings per share, based on the weighted average number of shares
outstanding during each period, are comprised of ordinary income for the three
month period ended January 31, 2009 and the prior year’s comparable
period.





Note 3 -
Segment information:




FREIT has
determined that it has two reportable segments: commercial properties and
residential properties. These reportable segments offer different types of
space, have different types of tenants, and are managed separately because each
requires different operating strategies and management expertise. The commercial
segment contains ten (10) separate properties and the residential segment
contains nine (9) properties. The accounting policies of the segments are the
same as those described in Note 1 in FREIT’s Annual Report on Form 10-K for the
year ended October 31, 2008.




The chief
operating and decision-making group of FREIT's commercial segment, residential
segment and corporate/other is comprised of FREIT’s Board of
Trustees.




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





Page
6
 Index


Real
estate rental revenue, operating expenses, NOI and recurring capital
improvements for the reportable segments are summarized below and reconciled to
consolidated net income for the three months ended January 31, 2009 and 2008.
Asset information is not reported since FREIT does not use this measure to
assess performance.




Three
      Months EndedJanuary
      31,2009
                              
                              
                              2008(In
      Thousands of Dollars)Real
      estate rental revenue:Commercial
                              
                              $
                              5,816
                              
                              
                              $
                              5,624Residential
                              
                              
                              4,891
                              
                              
                              
                              4,762Totals
                              
                              
                              10,707
                              
                              
                              
                              10,386Real
      estate operating expenses:Commercial
                              
                              
                              2,307
                              
                              
                              
                              2,291Residential
                              
                              
                              2,034
                              
                              
                              
                              2,146Totals
                              
                              
                              4,341
                              
                              
                              
                              4,437Net
      operating income:Commercial
                              
                              
                              3,509
                              
                              
                              
                              3,333Residential
                              
                              
                              2,857
                              
                              
                              
                              2,616Totals
                              
                              $
                              6,366
                              
                              
                              $
                              5,949Recurring
      capital improvements-residential
                              
                              $
                              129
                              
                              
                              $
                              146Reconciliation
      to consolidated net income:Segment
      NOI
                              
                              $
                              6,366
                              
                              
                              $
                              5,949Deferred
      rents - straight lining
                              
                              
                              51
                              
                              
                              
                              47Amortization
      of acquired leases
                              
                              
                              (9
                              )
                              
                              
                              24Net
      investment income
                              
                              
                              79
                              
                              
                              
                              159Minority
      interest in earnings of subsidiaries
                              
                              
                              (363
                              )
                              
                              
                              (115
                              )General
      and administrative expenses
                              
                              
                              (414
                              )
                              
                              
                              (390
                              )Depreciation
                              
                              
                              (1,474
                              )
                              
                              
                              (1,338
                              )Financing
      costs
                              
                              
                              (2,715
                              )
                              
                              
                              (2,933
                              )Net
      income
                              
                              $
                              1,521
                              
                              
                              $
                              1,403





Note 4 -
Share repurchase program:




On April
9, 2008, FREIT’s Board of Trustees authorized up to $2 million for the
repurchase of FREIT shares. Share repurchases under this program may be made
from time to time in the open market or through privately negotiated
transactions, depending on trading prices of FREIT shares and other market
conditions. This share repurchase program may be limited or terminated at any
time and without prior notice. As of January 31, 2009, FREIT repurchased 46,720
shares of common stock at a cost of $1,075,000, which is reflected in the
Shareholders’ Equity section of FREIT’s condensed consolidated balance
sheets.




Hill,
Thompson, Magid & Co., Inc., FREIT’s repurchasing agent under its share
repurchase plan adopted pursuant to Rule 10b5-1 under the Securities Exchange
Act of 1934, advised FREIT on March 3, 2009 that effective March 4, 2009, it
would cease transacting business and would no longer be a participating market
maker in any over-the-counter bulletin board securities.  Therefore,
no repurchases of shares will be made under FREIT’s share repurchase plan until
a new repurchasing agent is engaged.  FREIT is in the process of
identifying a new repurchasing agent to act under its share repurchase
plan.  As of the date of this report, a new repurchasing agent has not
been engaged.




Subsequent
event: In February 2009, FREIT repurchased an additional 4,200 shares of common
stock at a cost of $14 per share.





Page
7
 Index








Note 5 -
Management agreement, fees and transactions with related party:




Hekemian
& Co., Inc. (“Hekemian”) currently manages all the properties owned by
FREIT, except for The Rotunda, which is managed by an independent third party
management company. The management agreement with Hekemian, effective November
1, 2001, requires the payment of management fees equal to a percentage of rents
collected. Such fees were approximately $427,000 and $420,000 for the three
months ended January 31, 2009 and 2008, respectively, and have been included in
the accompanying condensed consolidated statements of income. In addition, the
management agreement provides for the payment to Hekemian of leasing
commissions, as well as the reimbursement of operating expenses incurred on
behalf of FREIT. Such fees amounted to approximately $147,000 and $84,000 for
the three months ended January 31, 2009 and 2008, respectively. The management
agreement expires on October 31, 2009, and is automatically renewed for periods
of two years unless either party gives notice of non-renewal.




From time
to time, FREIT engages Hekemian to provide certain additional services, such as
consulting services related to development and financing activities of FREIT.
Separate fee arrangements are negotiated between Hekemian and FREIT with respect
to such additional services. No such fees were paid to Hekemian for the three
months ended January 31, 2009 and 2008.




Mr.
Robert S. Hekemian, Chairman of the Board, Chief Executive Officer and a Trustee
of FREIT, is the Chairman of the Board and Chief Executive Officer of Hekemian.
Mr. Robert S. Hekemian, Jr, a Trustee of FREIT, is the President of
Hekemian.























Page
8
 Index


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








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








OVERVIEW




FREIT is
an equity real estate investment trust ("REIT") that owns a portfolio of
residential apartment and commercial properties. Our revenues consist primarily
of fixed rental income from our residential and commercial properties and
additional rent in the form of expense reimbursements derived from our income
producing commercial properties. Our properties are primarily located in
northern New Jersey and Maryland. We acquire existing properties for investment.
We also acquire properties, which we feel have redevelopment potential, and make
changes and capital improvements to these properties. We develop and construct
properties on our vacant land. Our policy is to acquire and develop real
property for long-term investment.




The
global economic and financial crisis:The current extraordinary and
unprecedented bank liquidity and credit market crisis has exacerbated an already
weakened economic climate resulting in a deep U.S. and worldwide
recession.  Continued concern about energy costs, inflation, cost and
availability of credit, and increasing unemployment have resulted in an
unprecedented lack of confidence by consumers and businesses.  It is
expected that this poor economic climate will continue, through 2009, and
possibly longer.




This
economic and financial crisis has affected, and will continue to affect FREIT in
a number of ways:




Residential
Properties: While the occupancy at our residential properties remains
high, we are beginning to experience resistance to rent increases, granting
concessions, a higher number of move-outs and higher than usual incidences of
late or defaulted monthly rental payments.  We expect this trend to
continue through 2009 and result in residential revenues that will be flat or
slightly lower than during fiscal 2008.




Commercial
Properties: Because of reduced consumer spending resulting in lower
profitability, some commercial tenants, large and small, are requesting rent
reductions, or lower renewal option rents.  To date we have
experienced little fall-out. However, we expect to see a fall out of some
smaller tenants, and if the recession is prolonged, some larger tenants. We
expect re-leasing vacated space to take longer and, generally, at lower rents
that reflect current economic conditions. Again, we expect revenues at our
commercial properties to be flat or slightly lower during fiscal 2009 than
during fiscal 2008.







Page
9
 Index




Development
Projects and Capital Expenditures:  We plan to significantly
reduce capital expenditures during fiscal 2009 compared to prior years, by
concentrating only on those capital expenditures that are absolutely necessary.
We continue to pursue the completion of the development and construction
activities started at our Damascus Shopping Center in Damascus, MD. Because of
reduced demand from residential rental tenants and buyers, curtailed business
expansion, and the current state of the credit markets, no date has been
determined for the commencement of construction at our Rotunda and South
Brunswick projects.




Debt
Financing Availability: The dislocations in the credit markets have
caused significant price volatility and liquidity disruptions. High pricing
spreads and very conservative debt service ratio requirements have made certain
financing unattractive and, in certain instances, unavailable. Additionally,
construction financing for large, mixed use projects is virtually unavailable,
or too costly. As a result of this difficult financing environment and reduced
end user demand (see above), FREIT has not determined a date for the
commencement of construction at its Rotunda Project.




The $22.5
million mortgage loan entered into by Grande Rotunda, LLC for the acquisition of
the Rotunda property is scheduled to come due on July 19, 2009. FREIT is
exploring the extension of the loan’s maturity date or replacement of the
loan.




Operating
Cash Flow and Dividend Distributions: FREIT’s cash position remains
strong. We expect that cash provided by operating activities will be adequate to
cover mandatory debt service payments, necessary capital improvements and
dividends necessary to retain qualification as a REIT. Additionally, FREIT has
embarked on a program to reduce operating expenses across the board to increase
cash flow. It is FREIT’s intention to maintain its quarterly dividend at $.30
per share until the economic climate indicates a change is appropriate, but not
less than the level required to maintain its REIT status for Federal income tax
purposes.





SIGNIFICANT
ACCOUNTING POLICIES AND ESTIMATES




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




Our
discussion and analysis of our financial condition and results of operations are
based upon our consolidated financial statements, the preparation of which takes
into account estimates based on judgments and assumptions that affect certain
amounts and disclosures. Accordingly, actual results could differ from these
estimates. The accounting policies and estimates used, which are outlined in
Note 1 to our Consolidated Financial Statements included in our Annual Report on
Form 10-K for the year ended October 31, 2008, have been applied consistently as
at January 31, 2009 and October 31, 2008, and for the three months ended January
31, 2009 and 2008. We believe that the following accounting policies or
estimates require the application of management's most difficult, subjective, or
complex judgments:




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




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





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





Page
10
 Index





RESULTS
OF OPERATIONS




Real
Estate revenue for the three months ended January 31, 2009 (“Current Quarter”)
increased 2.8% to $10,749,000 compared to $10,457,000 for the three months ended
January 31, 2008 (“Prior Year’s Quarter”).  The increase in real
estate revenues for the Current Quarter was primarily attributable to higher
base rental income at FREIT’s residential and commercial operations, along with
higher occupancy levels at many of our commercial properties (exclusive of the
Damascus operation). However, this increase was slightly offset by a decrease in
occupancy levels at our residential operations.




Net
income for the Current Quarter was $1,521,000 ($0.22 per share diluted) compared
to $1,403,000 ($0.20 per share diluted) for the Prior Year’s Quarter. The
schedule below provides a detailed analysis of the major changes that impacted
net income for the three months ended January 31, 2009 and 2008:




The
consolidated results of operations for the Current Quarter are not necessarily
indicative of the results to be expected for the full year.




NET
      INCOME COMPONENTSThree
      Months EndedJanuary
      31,2009
                                                  
                                                  
                                                  2008
                                                  
                                                  
                                                  Change(thousands
      of dollars)Income
      from real estate operations:Commercial
      properties
                                                  
                                                  $
                                                  3,551
                                                  
                                                  
                                                  $
                                                  3,404
                                                  
                                                  
                                                  $
                                                  147Residential
      properties
                                                  
                                                  
                                                  2,857
                                                  
                                                  
                                                  
                                                  2,616
                                                  
                                                  
                                                  
                                                  241Total
      income from real estate operations
                                                  
                                                  
                                                  6,408
                                                  
                                                  
                                                  
                                                  6,020
                                                  
                                                  
                                                  
                                                  388Financing
      costs:Fixed
      rate mortgages
                                                  
                                                  
                                                  (2,582
                                                  )
                                                  
                                                  
                                                  (2,561
                                                  )
                                                  
                                                  
                                                  (21
                                                  )Floating
      rate - Rotunda
                                                  
                                                  
                                                  (133
                                                  )
                                                  
                                                  
                                                  (372
                                                  )
                                                  
                                                  
                                                  239Total
      financing costs
                                                  
                                                  
                                                  (2,715
                                                  )
                                                  
                                                  
                                                  (2,933
                                                  )
                                                  
                                                  
                                                  218Investment
      income
                                                  
                                                  
                                                  79
                                                  
                                                  
                                                  
                                                  159
                                                  
                                                  
                                                  
                                                  (80
                                                  )General
      & administrative expenses:Accounting
      fees
                                                  
                                                  
                                                  (100
                                                  )
                                                  
                                                  
                                                  (179
                                                  )
                                                  
                                                  
                                                  79Legal
      & professional fees
                                                  
                                                  
                                                  (50
                                                  )
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  
                                                  (50
                                                  )Trustee
      fees
                                                  
                                                  
                                                  (124
                                                  )
                                                  
                                                  
                                                  (113
                                                  )
                                                  
                                                  
                                                  (11
                                                  )Corporate
      expenses
                                                  
                                                  
                                                  (140
                                                  )
                                                  
                                                  
                                                  (98
                                                  )
                                                  
                                                  
                                                  (42
                                                  )Total
      general & administrative expenses
                                                  
                                                  
                                                  (414
                                                  )
                                                  
                                                  
                                                  (390
                                                  )
                                                  
                                                  
                                                  (24
                                                  )Minority
      interest in earnings of subsidiaries
                                                  
                                                  
                                                  (363
                                                  )
                                                  
                                                  
                                                  (115
                                                  )
                                                  
                                                  
                                                  (248
                                                  )Depreciation:Same properties(1)
                                                  
                                                  
                                                  (1,361
                                                  )
                                                  
                                                  
                                                  (1,292
                                                  )
                                                  
                                                  
                                                  (69
                                                  )Damascus
      center-phase I becoming operational in June 2008
                                                  
                                                  
                                                  (113
                                                  )
                                                  
                                                  
                                                  (46
                                                  )
                                                  
                                                  
                                                  (67
                                                  )Total
      depreciation
                                                  
                                                  
                                                  (1,474
                                                  )
                                                  
                                                  
                                                  (1,338
                                                  )
                                                  
                                                  
                                                  (136
                                                  )Net
      Income
                                                  
                                                  $
                                                  1,521
                                                  
                                                  
                                                  $
                                                  1,403
                                                  
                                                  
                                                  $
                                                  118(1)
      Properties operated since the beginning of fiscal 2008.







Page
11
 Index


SEGMENT
INFORMATION




The
following table sets forth comparative net operating income ("NOI")data for
FREIT’s real estate segments and reconciles the NOI to consolidated net income
for the Current Quarter, as compared to the Prior Year’s Quarter:




Three Months Ended January
    31:Commercial
                                                                                                                                                                                                      
                                                                                                                                                                                                      Residential
                                                                                                                                                                                                      
                                                                                                                                                                                                      CombinedThree
      Months Ended
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      Three
      Months Ended
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      Three
      Months EndedJanuary
      31,
                                                                                                                                                                                                      
                                                                                                                                                                                                      Increase (Decrease)
                                                                                                                                                                                                      
                                                                                                                                                                                                      January
      31,
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      Increase (Decrease)
                                                                                                                                                                                                      
                                                                                                                                                                                                      January
      31,2009
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      2008
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      2009
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      2008
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      2009
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      2008(in
      thousands)
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      (in
      thousands)
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      (in
      thousands)Rental
      income
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      4,360
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      4,194
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      166
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      4.0
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      4,790
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      4,715
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      75
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      1.6
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      9,150
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      8,909Reimbursements
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      1,405
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      1,385
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      20
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      1.4
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      1,405
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      1,385Other
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      51
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      45
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      6
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      13.3
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      101
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      47
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      54
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      114.9
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      152
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      92Total
      revenue
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      5,816
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      5,624
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      192
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      3.4
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      4,891
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      4,762
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      129
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      2.7
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      10,707
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      10,386Operating
      expenses
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      2,307
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      2,291
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      16
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      0.7
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      2,034
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      2,146
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      (112
                                                                                                                                                                                                      )
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      -5.2
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      4,341
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      4,437Net
      operating income
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      3,509
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      3,333
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      176
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      5.3
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      2,857
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      2,616
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      241
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      9.2
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      6,366
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      5,949AverageOccupancy
      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      89.2
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      89.5
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      -0.3
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      93.8
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      95.7
                                                                                                                                                                                                      %
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      -1.9
                                                                                                                                                                                                      %Reconciliation
      to consolidated net income:Deferred
      rents - straight lining
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      51
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      47Amortization
      of acquired leases
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      (9
                                                                                                                                                                                                      )
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      24Net
      investment income
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      79
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      159General
      and administrative expenses
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      (414
                                                                                                                                                                                                      )
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      (390
                                                                                                                                                                                                      )Depreciation
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      (1,474
                                                                                                                                                                                                      )
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      (1,338
                                                                                                                                                                                                      )Financing
      costs
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      (2,715
                                                                                                                                                                                                      )
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      (2,933
                                                                                                                                                                                                      )Minority
      interest
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      (363
                                                                                                                                                                                                      )
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      (115
                                                                                                                                                                                                      )Net
      income
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      1,521
                                                                                                                                                                                                      
                                                                                                                                                                                                      
                                                                                                                                                                                                      $
                                                                                                                                                                                                      1,403





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





COMMERCIAL
SEGMENT


The
commercial segment contains ten (10) separate properties during Fiscal 2009 and
Fiscal 2008. Seven are multi-tenanted retail or office centers, and one is a
single tenanted store. In addition, FREIT owns land in Rockaway, NJ and Rochelle
Park, NJ from which it receives monthly rental income. The Rockaway land is
leased to a tenant who has built and operates a bank branch on the land. In
Rochelle Park, NJ, FREIT leases the land to a tenant who plans to build and
operate a bank branch on the land.




As
indicated in the table above under the caption Segment Information, revenue and
NOI from FREIT’s commercial segment for the Current Quarter increased by 3.4%
and 5.3% over the comparable prior year’s period. The primary reasons for the
increase in both revenue and NOI for the Current Quarter was higher base rental
income and higher occupancy levels at many of our commercial properties
(exclusive of the Damascus operation).  The ongoing renovation at our
Damascus Shopping Center property located in Damascus, MD (the “Damascus
Center”),  caused a temporary decline in occupancy levels. The average
occupancy rate for the Damascus Center decreased to 41.4% for the Current
Quarter, as compared to 52.3% for the Prior Year’s Quarter. (See discussion
below). Average occupancy rates for FREIT’s commercial segment for the Current
Quarter was at 95.2%, exclusive of the Damascus Center, compared to 94.1% for
the prior year’s period.




The
current economic crisis has reduced overall consumer spending, resulting in
lower profitability for certain of our commercial tenants. As a result, some
commercial tenants, both large and small, are requesting rent reductions, or
lower renewal option rents.  To date we have experienced little
fall-out. However, we expect to see a fall out of some smaller tenants, and if
the recession is prolonged, some larger tenants. We expect re-leasing vacated
space to take longer and, generally, to be at lower rents that reflect current
economic conditions. We expect revenues at our commercial properties to be flat
or slightly lower during fiscal 2009 than during fiscal 2008.





Page
12
 Index





DEVELOPMENT
ACTIVITIES




A
modernization and expansion is underway at our Damascus Center in Damascus, MD
(owned by our 70% owned affiliate, Damascus Centre, LLC). Total construction
costs are expected to approximate $21.9 million. The building plans incorporate
an expansion of retail space from its current configuration of approximately
140,000 sq. ft. to approximately 150,000 sq. ft., which will be anchored by a
modern 58,000 sq. ft. Safeway supermarket. Construction on Phase I began in June
2007, and was completed in June 2008. Phase I construction costs were
approximately $6.2 million, of which $1.1 million related to tenant
improvements. Phase II, which comprises a new 58,000 sq. ft. Safeway
supermarket, was started in December 2008 and is expected to be completed this
summer. Construction costs for Phase II are expected to approximate $7.3 million
(a substantial portion of these costs are under contract). Total construction
costs will be funded from a $27.3 million construction loan entered into on
February 12, 2008. The construction loan is secured by the shopping center owned
by Damascus Centre, LLC.   This loan will be drawn upon as needed
to fund already expended and future construction costs at the Damascus Shopping
Center. As of January 31, 2009, $5.6 million of this loan was drawn down to
cover construction costs. (See “Liquidity and Capital Resources” for additional
information regarding this loan.) Because of this expansion, leases for certain
tenants have been allowed to expire and not renewed. This has caused occupancy
to decline, on a temporary basis, during the construction phase.




Development
plans and studies for the expansion and renovation of our Rotunda property in
Baltimore, MD (owned by our 60% owned affiliate Grande Rotunda, LLC) were
completed during Fiscal 2008. The Rotunda property, on an 11.5-acre site,
currently consists of an office building containing 138,000 sq. ft. of office
space and 78,000 sq. ft. of retail space on the lower floor of the main
building. The building plans incorporate an expansion of approximately 180,500
sq. ft. of retail space, approximately 302 residential rental apartments, 56
condominium units and 120 hotel rooms, and structured parking. Development costs
for this project are expected to approximate  $200 million. City
Planning Board approval has been received. As of January 31, 2009, we have
expended approximately $5.2 million for planning and feasibility studies. Due to
the current economic and credit crisis, the start date for the construction has
not yet been determined.





RESIDENTIAL
SEGMENT




FREIT
operates nine (9) multi-family apartment communities totaling 1,075 apartment
units. As indicated in the table above under the caption Segment Information,
revenue and NOI from FREIT’s residential segment for the Current Quarter
increased by 2.7% and 9.2% over the comparable prior year’s period. The primary
reasons for the increase for the Current Quarter were higher base rental income,
along with lower operating expenses at many of our residential properties. This
increase was realized in spite of a decrease in occupancy levels at our
residential properties. The Pierre Towers and Westwood Hills properties were the
primary contributors to the favorable increase in revenue and NOI for the
Current Quarter.




As
indicated above, a decline in residential occupancy levels tempered the
favorable increase for the Current Quarter. Average occupancy rates for the
Current Quarter were at 93.8% compared to 95.7% for the prior year’s period.
Although, the occupancy at our residential properties remains high, the current
economic crisis is causing high unemployment in our areas of operation, and as a
result we are experiencing resistance to rent increases, granting concessions, a
higher number of move-outs and higher than usual incidences of late or defaulted
monthly rental payments.  We expect this trend to continue through
2009 and result in residential revenues that will be flat or slightly lower than
during Fiscal 2008.




Our
residential revenue is principally composed of monthly apartment rental income.
Total rental income is a factor of occupancy and monthly apartment rents.
Monthly average residential rents at the end of the Current Quarter and the
Prior Year’s Quarter were $1,562 and $1,523, respectively. A 1% decline in
annual average occupancy, or a 1% decline in average rents from current levels,
results in an annual revenue decline of approximately $202,000 and $188,000,
respectively.




Capital
expenditures: Since all of our apartment communities, with the exception of The
Boulders, were constructed more than 25 years ago, we tend to spend more in any
given year on maintenance and capital improvements than may be spent on newer
properties. A major renovation program is ongoing at The Pierre Towers apartment
complex (“The Pierre”). We are in the process of modernizing, where required,
all apartments and some of the buildings’ mechanical services. This renovation
is expected to cost approximately $3 - $4 million, and apartments are being
renovated as they become temporarily vacant, over the next year. These costs
will be financed from operating cash flow and cash reserves. Through January 31,
2009, we expended approximately $3.4 million in capital improvements at The
Pierre, including approximately $546,000 during the Current
Quarter.


Page
13
 Index




INVESTMENT
INCOME




Investment
income decreased 50% to $79,000 during the Current Quarter from $159,000 for the
prior year’s period. Investment income is principally derived from interest
earned from cash on deposit in institutional money market funds and interest
earned from secured loans receivable (loans made to Hekemian employees,
including certain members of the immediate family of Robert S. Hekemian, FREIT
CEO and Chairman of the Board and Robert S. Hekemian, Jr., a trustee of FREIT,
for their equity investment in Grande Rotunda, LLC, a limited liability company,
in which FREIT owns a 60% equity interest and Damascus Centre, LLC, a limited
liability company, in which FREIT owns a 70% equity interest). The decrease in
investment income for the Current Quarter was primarily attributable to lower
interest income on the Company’s investments in cash and cash equivalents, due
in part to lower interest rates. Slightly offsetting the decrease in investment
income was increased interest income relative to secured loans made to Hekemian
employees in connection with the sale of equity interests in the Rotunda and the
Damascus Center.




To
protect our cash deposits due to the current banking crisis, we have
repositioned our bank deposits to fall within the insured limits of the FDIC and
the U.S. Treasury Guarantee Program. This necessitated transferring significant
balances from interest bearing deposit accounts to non-interest bearing deposit
accounts, which will result in reduced earnings from interest income for the
foreseeable future.




FINANCING
COSTS




Three
      Months EndedJanuary
      31,2009
                            
                            
                            2008($
      in thousands)Fixed
      rate mortgages:1st
      MortgagesExisting
                            
                            $
                            2,247
                            
                            
                            $
                            2,369New
                            
                            
                            91
                            
                            
                            
                            -2nd
      MortgagesExisting
                            
                            
                            126
                            
                            
                            
                            130Variable
      rate mortgages:Acquisition
      loan-Rotunda
                            
                            
                            175
                            
                            
                            
                            392Construction
      loan-Damascus
                            
                            
                            48
                            
                            
                            
                            -Other
                            
                            
                            72
                            
                            
                            
                            552,759
                            
                            
                            
                            2,946Amortization
      of Mortgage Costs
                            
                            
                            59
                            
                            
                            
                            73Total
      Financing Costs
                            
                            
                            2,818
                            
                            
                            
                            3,019Less
      amount capitalized
                            
                            
                            (103
                            )
                            
                            
                            (86
                            )Financing
      costs expensed
                            
                            $
                            2,715
                            
                            
                            $
                            2,933


Financing
costs before capitalized amounts for the Current Quarter decreased 6.7% compared
to the Prior Year’s Quarter.




Our
acquisition loan for The Rotunda property of $22.5 million bears a floating
interest rate. Significantly lower interest rates over the course of the Current
Quarter decreased the level of interest expense (inclusive of capitalized
interest) for The Rotunda to $175,000 for the Current Quarter, as compared to
$392,000 for the Prior Year’s Quarter.





GENERAL
AND ADMINISTRATIVE EXPENSES (“G & A”)




During
the Current Quarter, G&A was $414,000, as compared to $390,000 for the Prior
Year’s Quarter. The primary components of G&A are accounting fees, legal
& professional fees and Trustees’ fees amounting in the aggregate to
$274,000 for the Current Quarter and $292,000 for the Prior Year’s Quarter,
respectively.





DEPRECIATION




Depreciation
expense from operations for the Current Quarter was $1,474,000, an increase of
$136,000 over the prior year’s comparable period. The increase was primarily
attributable to current renovation and construction projects becoming
operational at the Damascus Shopping Center, The Rotunda, and the Westridge
Square Shopping Center, respectively.





Page
14
 Index





LIQUIDITY
AND CAPITAL RESOURCES




Our
financial condition remains strong. Net cash provided by operating activities
was $3.5 million for the Current Quarter compared to $4.2 million for the Prior
Year’s Quarter. We expect that cash provided by operating activities will be
adequate to cover mandatory debt service payments, recurring capital
improvements and dividends necessary to retain qualification as a REIT (90% of
taxable income).




As at
January 31, 2009, we had cash and marketable securities totaling $8.0 million
compared to $8.2 million at October 31, 2008.




Credit
Line: FREIT has an $18 million line of credit provided by the Provident Bank.
The line of credit is for a two year term ending in January 2010, but can be
cancelled by the bank, at its will, at each anniversary date. Draws against the
credit line can be used for general corporate purposes, for property
acquisitions, construction activities, and letters of credit. Draws against the
credit line are secured by mortgages on FREIT’s Franklin Crossing Shopping
Center, Franklin Lakes, NJ, retail space in Glen Rock, NJ, Palisades Manor
Apartments, Palisades Park, NJ, and Grandview Apartments, Hasbrouck Heights, NJ.
Interest rates on draws will be set at the time of each draw for 30, 60, or
90-day periods, based on our choice of the prime rate or at 175 basis points
over the 30, 60, or 90-day LIBOR rates at the time of the draws.




In
connection with its construction activities in Rockaway, NJ, FREIT utilized the
credit line for the issuance of a $384,000 Letter of Credit, which expires in
fiscal 2009. As of January 31, 2009, approximately $17.6 million is available
under the line of credit.




We have
begun the rebuilding of the Damascus Shopping Center, in Damascus, MD. The total
capital required for this project is estimated at $21.9 million. Total
construction costs will be funded by a $27.3 million construction loan entered
into on February 12, 2008. The construction loan is secured by the shopping
center owned by Damascus Centre, LLC.  This loan will be drawn upon as
needed to fund already expended and future construction costs at the Damascus
Shopping Center. This loan has a term of forty-eight (48) months, with one
twelve (12) month extension option. FREIT guarantees 30% of the outstanding
principal amount of the loan plus other costs.  If the borrower defaults,
Damascus 100, LLC (which owns a 30% equity interest in Damascus Centre, LLC) has
indemnified FREIT for up to 30% of any losses under its guaranty.Draws
against this loan bear interest at the BBA LIBOR daily floating rate plus 135
basis points. As of January 31, 2009, Damascus drew down $5.6 million of this
loan to cover construction costs. We expect this development project to add to
revenues, income, cash flow, and shareholder value.




We are
planning a major expansion at The Rotunda in Baltimore, MD that will require
capital estimated at $200 million. We expect financing for the Rotunda will be,
for the most part, from mortgage financing. Planning and feasibility studies for
this project have been substantially completed. As of January 31, 2009,
approximately $5.2 million was expended during this phase, which adds to the
value of our property. However, due to the current economic crisis and liquidity
and credit crunch, no date for the commencement of construction has been
determined.




At
January 31, 2009, FREIT’s aggregate outstanding mortgage debt was $192.3 million
and bears a weighted average interest rate of 5.24%, and an average life of
approximately 5.4 years. These fixed rate mortgages are subject to amortization
schedules that are longer than the term of the mortgages. As such, balloon
payments (unpaid principal amounts at mortgage due date) for all mortgage debt
will be required as follows:




Fiscal
      Year
                        2009
                        2010
                        2012
                        2013
                        2014
                        2016
                        2017
                        2018
                        2019
                        2022($
      in millions)Mortgage
      "Balloon" Payments
                        $22.5
                        $12.2
                        $5.6
                        $8.0
                        $25.9
                        $24.5
                        $22.0
                        $5.0
                        $28.1
                        $14.4




The
following table shows the estimated fair value and carrying value of our
long-term debt at January 31, 2009 and October 31, 2008:




January
      31,
                    
                    
                    October
      31,($
      in Millions)
                    
                    2009
                    
                    
                    2008Fair
      Value
                    
                    $
                    207.4
                    
                    
                    $
                    196.2Carrying
      Value
                    
                    $
                    192.3
                    
                    
                    $
                    192.4





Fair
values are estimated based on market interest rates at January 31, 2009 and
October 31, 2008 and on discounted cash flow analysis. Changes in assumptions or
estimation methods may significantly affect these fair value
estimates.







Page
15
 Index




FREIT
expects to refinance the individual mortgages with new mortgages when their
terms expire. To this extent we have exposure to interest rate risk. If interest
rates, at the time any individual mortgage note is due, are higher than the
current fixed interest rate, higher debt service may be required, and/or
refinancing proceeds may be less than the amount of mortgage debt being retired.
For example, at January 31, 2009 a 1% interest rate increase would reduce the
fair value of our debt by $10 million, and a 1% decrease would increase the fair
value by $11 million.




FREIT
also has interest rate exposure on its floating rate loans. Currently, FREIT has
$28.1 million in floating rate loans outstanding, of which $22.5 million relates
to the acquisition loan for The Rotunda and $5.6 million relates to the
construction loans for the Damascus redevelopment project. A 1% rate fluctuation
would impact FREIT’s annual interest cost by approximately
$281,000.




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





FUNDS
FROM OPERATIONS (“FFO”):




Many
consider FFO as the standard measurement of a REIT’s performance. We compute FFO
as follows:




Funds From Operations
    ("FFO")Three
      Months EndedJanuary
      31,2009
                                          
                                          
                                          2008($
      in thousands)Net
      income
                                          
                                          $
                                          1,521
                                          
                                          
                                          $
                                          1,403Depreciation
                                          
                                          
                                          1,474
                                          
                                          
                                          
                                          1,338Amortization
      of deferred mortgage costs
                                          
                                          
                                          59
                                          
                                          
                                          
                                          73Deferred
      rents (Straight lining)
                                          
                                          
                                          (51
                                          )
                                          
                                          
                                          (47
                                          )Amortization
      of acquired leases
                                          
                                          
                                          9
                                          
                                          
                                          
                                          (24
                                          )Capital
      Improvements - Apartments
                                          
                                          
                                          (129
                                          )
                                          
                                          
                                          (146
                                          )Minority
      interests:Equity
      in earnings of affiliates
                                          
                                          
                                          363
                                          
                                          
                                          
                                          115Distributions
      to minority interests
                                          
                                          
                                          (120
                                          )
                                          
                                          
                                          (327
                                          )FFO
                                          
                                          $
                                          3,126
                                          
                                          
                                          $
                                          2,385Per
      Share - Basic
                                          
                                          $
                                          0.45
                                          
                                          
                                          $
                                          0.35Per
      Share - Diluted
                                          
                                          $
                                          0.45
                                          
                                          
                                          $
                                          0.35Weighted
      Average Shares Outstanding:Basic
                                          
                                          
                                          6,946
                                          
                                          
                                          
                                          6,763Diluted
                                          
                                          
                                          6,946
                                          
                                          
                                          
                                          6,906





FFO does
not represent cash generated from operating activities in accordance with
accounting principles generally accepted in the United States of America, and
therefore should not be considered a substitute for net income as a measure of
results of operations or for cash flow from operations as a measure of
liquidity. Additionally, the application and calculation of FFO by certain other
REITs may vary materially from that of FREIT’s, and therefore FREIT’s FFO and
the FFO of other REITs may
not be directly comparable.





INFLATION


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





Page
16
 Index





Item
3: Quantitative and Qualitative Disclosures About Market
Risk




See
“Residential Segment” and “Liquidity and Capital Resources” under Item 2 above
for a detailed discussion of FREIT’s quantitative and qualitative market risk
disclosures.





Item
4: Controls and Procedures




At the
end of the period covered by this report, we carried out an evaluation of the
effectiveness of the design and operation of FREIT’s disclosure controls and
procedures. This evaluation was carried out under the supervision and with
participation of FREIT’s management, including FREIT’s Chairman and Chief
Executive Officer and Chief Financial Officer, who concluded that FREIT’s
disclosure controls and procedures are effective. There has been no change in
FREIT’s internal control over financial reporting during the first three months
of fiscal 2009 that has materially affected, or is reasonably likely to
materially affect, FREIT’s internal control over financial
reporting.




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





Part
II:  Other Information





Item
1A:  Risk Factors




There
were no material changes in any risk factors previously disclosed in the
Company’s Annual Report on Form 10-K for the year ended October 31, 2008, that
was filed with the Securities and Exchange Commission on January 14,
2009.





Item
2:  Unregistered Sales of Equity Securities and Use of
Proceeds




Information
regarding FREIT’s share repurchase program for the three months ended January
31, 2009 is as follows:




Issuer
      Purchases of Equity Securities (1)(2)(3)(4)Period
                                                
                                                Total
      Number of Shares Purchased
                                                
                                                
                                                Average
      PricePaid Per Share
                                                
                                                
                                                Total
      Number of SharesPurchased as Part ofPublicly
      AnnouncedProgram
                                                
                                                
                                                Approximate
      DollarValue of Shares that MayYet Be Purchased Underthe
      ProgramNovember
      1, 2008 through November 30, 2008
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                $
                                                925,255December
      1, 2008 through December 31, 2008
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                $
                                                925,255January
      1, 2009 through January 31, 2009
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                $
                                                925,255Total
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -
                                                
                                                
                                                $
                                                925,255


(1)
            On
      April 9, 2008, FREIT’s Board of Trustees authorized up to $2 million for
      the repurchase of FREIT’s shares of beneficial interest. The share
      repurchase plan provides for the repurchase of FREIT shares on or before
      March 31, 2009.


(2)
            Share
      repurchases under this program may be made from time to time in the open
      market or in privately negotiated transactions, depending on the price of
      FREIT shares and other market conditions. This share repurchase program
      may be limited or terminated at any time and without prior
      notice.


(3)
            Rule
      10b5-1 permits the implementation of a written plan for repurchasing
      shares of company stock at times when the issuer is not in possession of
      material, nonpublic information and allows issuers adopting such plans to
      repurchase shares on a regular basis, regardless of any repurchases to be
      effected through FREIT’s repurchasing agent, Hill, Thompson, Magid &
      Co., Inc., pursuant to the terms and conditions set forth in the share
      repurchase plan, which has been established in accordance with applicable
      regulations. On March 3, 2009, Hill, Thompson, Magid & Co., Inc.,
      advised FREIT that effective March 4, 2009, it would cease transacting
      business and would no longer be a participating market maker in any
      over-the-counter bulletin board securities.  Therefore, no
      repurchases of shares will be made under FREIT’s share repurchase plan
      until a new repurchasing agent is engaged.  FREIT is in the
      process of identifying a new repurchasing agent to act under its share
      repurchase plan.  As of the date of this report, a new
      repurchasing agent has not been
engaged.


(4)
            As
      of January 31, 2009, FREIT repurchased 46,720 shares at a cost of
      $1,075,000, which is reflected in the Shareholders’ Equity section of
      FREIT’s balance sheet.




Subsequent
event:


·
            In
      February 2009, FREIT repurchased an additional 4,200 shares of common
      stock at a cost of $14 per
share.


Page
17
 Index











Item
6: Exhibits





Reference
is made to the Exhibit index below.














Exhibit
Index





PageExhibit
      31.1 - Section 302 Certification of Chief Executive
Officer
                  20Exhibit
      31.2 - Section 302 Certification of Chief Financial
Officer
                  21Exhibit
      32.1 - Certification of Chief Executive Officer pursuant to 18 U.S.C.
      Section 1350
                  22Exhibit
      32.2 - Certification of Chief Financial Officer pursuant to 18 U.S.C.
      Section 1350
                  23

















Page
18
 Index








SIGNATURES





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











FIRST
      REAL ESTATE INVESTMENTTRUST OF NEW JERSEY(Registrant)Date:
      March 12, 2009/s/
      Robert S. Hekemian(Signature)Robert
      S. HekemianChairman
      of the Board and Chief Executive Officer(Principal
      Executive Officer)/s/
      Donald W. Barney(Signature)Donald
      W. BarneyPresident,
      Treasurer and Chief Financial Officer(Principal
      Financial/Accounting
Officer)







Page 19