SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
        SECURITIES EXCHANGE ACT OF 1934
For Quarterly period ended   July 31, 2003
                             -------------
                                       or

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

Commission File No.: 2-27018


                FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY
                ------------------------------------------------
             (Exact name of registrant as specified in its charter)


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


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


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


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


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

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

[  ] Yes       [XX]  No

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

<PAGE>



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

                                      INDEX
                                      -----
Part I:  Financial Information

         Item 1:  Unaudited Condensed Consolidated Financial Statements.

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

                  b.) Condensed Consolidated Statements of Income, Comprehensive
                      Income and Undistributed Earnings for the Nine and Three
                      Months Ended July 31, 2003 and 2002;

                  c.) Condensed Consolidated Statements of Cash Flows for the
                      Nine Months Ended July 31, 2003 and 2002;

                  d.) Notes to Condensed Consolidated Financial Statements.

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

         Item 3: Quantitative and Qualitative Disclosures About Market Risk.

         Item 4: Controls and Procedures.



Part II: Other Information


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



<PAGE>



Item 1: Financial Statements

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

                                                                 July 31,      October 31,
                                                                   2003          2002
                                                                   ----          ----
                                                                (Unaudited)    (See Note 1)
                                                                -----------    ------------
                                                                (In Thousands of Dollars)
                                                                -------------------------
                                     ASSETS
                                     ------
<S>                                                              <C>            <C>
Real estate, at cost, net of accumulated
        depreciation                                             $ 83,677       $ 74,687
Investment in affiliates                                               --          3,283
Cash & cash equivalents                                             7,234         11,930
Tenants' security accounts                                            823            788
Sundry receivables                                                  3,293          2,555
Prepaid expenses and other assets                                   2,620          1,306
Deferred charges, net                                               1,884          1,166
                                                                 --------       --------
                                        Totals                   $ 99,531       $ 95,715
                                                                 ========       ========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------
Liabilities:
        Mortgages payable                                        $ 70,238       $ 68,393
        Accounts payable and accrued expenses                       1,341            550
        Dividends payable                                           1,104          2,090
        Tenants' security deposits                                  1,204          1,122
        Cash distributions in excess of investment in affiliates      452             --
        Deferred Trustee's fees                                       438            228
        Deferred revenue                                              406            332
        Interest rate swap contract                                   152             --
                                                                 --------       --------
                                   Total liabilities               75,335         72,715
                                                                 --------       --------

Minority interest                                                   1,166          1,097
                                                                 --------       --------

Commitments and contingencies

Shareholders' equity:
        Shares of beneficial interest without par value:
           4,000,000 shares authorized;
           3,155,576 and 3,119,576 shares issued and outstanding
           respectively                                            19,854         19,314
        Undistributed earnings                                      3,328          2,589

        Accumulated other comprehensive loss                         (152)            --
                                                                 --------       --------
                              Total shareholders' equity           23,030         21,903
                                                                 --------       --------

                                        Totals                   $ 99,531       $ 95,715
                                                                 ========       ========
</TABLE>

See Notes to Consolidated Financial Statements


<PAGE>



<TABLE>
<CAPTION>
         FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
               NINE AND THREE MONTHS ENDED JULY 31, 2003 AND 2002

                                                           Nine Months                  Three Months
                                                          Ended July 31,               Ended July 31,
                                                       2003          2002           2003           2002
                                                       ----          ----           ----           ----
                                                                  (In Thousands of Dollars,
                                                                  Except Per Share Amounts)

<S>                                                  <C>           <C>            <C>            <C>
Revenue:
 Rental income                                       $ 12,096      $ 11,801       $  4,086       $  3,995
 Reimbursements                                         2,256         2,060            787            665
 Equity in income (loss) of affiliates                    113           197           (108)            88
 Net investment Income                                    139           183             45             60
 Sundry income                                            229           149            130             23
                                                     --------      --------       --------       --------
                                 Totals                14,833        14,390          4,940          4,831
                                                     --------      --------       --------       --------
Expenses:
 Operating expenses                                     3,000         2,630            814            960
 Management fees                                          616           594            295            199
 Real estate taxes                                      1,872         1,781            697            598
 Financing costs                                        3,505         3,661          1,167          1,220
 Depreciation                                           1,601         1,609            534            538
 Minority interest                                        184            89             52             (3)
                                                     --------      --------       --------       --------
                                 Totals                10,778        10,364          3,559          3,512
                                                     --------      --------       --------       --------
Income from continuing operations
 before state income taxes                              4,055         4,026          1,381          1,319
Provision for state income taxes                          15            15              7              5
                                                     --------      --------       --------       --------
Income from continuing operations                       4,040         4,011          1,374          1,314
Discontinued operations                                    --           (33)            --            (10)
                                                     --------      --------       --------       --------
                    Net Income                       $  4,040      $  3,978       $  1,374       $  1,304
                                                     ========      ========       ========       ========
---------------------------------------------------------------------------------------------------------
Basic earnings (loss) per share:
 Earnings before discontinued operations             $   1.29      $   1.29       $   0.44       $   0.42
 Discontinued operations                                   --         (0.01)            --          (0.00)
                                                     --------      --------       --------       ========
                                                     $   1.29      $   1.28       $   0.44       $   0.42
                                                     --------      --------       --------       --------
Diluted earnings (loss) per share:
 Earnings before discontinued operations             $   1.23      $   1.26       $   0.42       $   0.41
 Discontinued operations                                   --         (0.01)            --          (0.00)
                                                     --------      --------       --------       ========
                                                     $   1.23      $   1.25       $   0.42       $   0.41
---------------------------------------------------------------------------------------------------------
Basic weighted average shares outstanding               3,129         3,120          3,138          3,120
Diluted weighted average shares outstanding             3,283         3,181          3,290          3,215
---------------------------------------------------------------------------------------------------------
</TABLE>

See Notes to Consolidated Financial Statements

<PAGE>


<TABLE>
<CAPTION>

         FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARIES
   CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND UNDISTRIBUTED EARNINGS
               NINE AND THREE MONTHS ENDED JULY 31, 2003 AND 2002

                                                              Nine Months                Three Months
                                                             Ended July 31,             Ended July 31,
                                                          2003          2002          2003          2002
                                                          ----          ----          ----          ----
                                                                     (In Thousands of Dollars)
                        COMPREHENSIVE INCOME
                        --------------------
<S>                                                      <C>           <C>           <C>           <C>
Net income                                               $ 4,040       $ 3,978       $ 1,374       $ 1,304
Other comprehensive income (loss):
     Unrealized income(loss)on interest
     rate swap contract                                     (152)                        156
                                                         -------       -------       -------       -------
Comprehensive income                                     $ 3,888       $ 3,978       $ 1,530       $ 1,304
                                                         =======       =======       =======       =======

                       UNDISTRIBUTED EARNINGS
                       ----------------------
Balance, beginning of period                             $ 2,589       $ 2,274       $ 3,072       $ 3,076
Net income                                                 4,040         3,978         1,374         1,304
Less dividends                                            (3,301)       (2,808)       (1,118)         (936)
                                                         -------       -------       -------       -------
Balance, end of period                                   $ 3,328       $ 3,444       $ 3,328       $ 3,444
                                                         =======       =======       =======       =======
Dividends per share                                      $  1.05       $  0.90       $  0.35       $  0.30
                                                         =======       =======       =======       =======
</TABLE>

See Notes to Consolidated Financial Statements



<TABLE>
<CAPTION>

         FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    NINE MONTHS ENDED JULY 31, 2003 AND 2002
                                                                            2003           2002
                                                                            ----           ----
                                                                          (In thousands of Dollars)
                                                                          -------------------------
<S>                                                                       <C>            <C>
Operating activities:
     Net Income                                                           $  4,040       $  3,978
     Adjustments to reconcile net income to net cash provided by
     operating activities:
      Depreciation and amortization                                          1,783          1,838
      Equity in income of affiliates                                          (113)          (197)
      Deferred revenue                                                          74            195
      Minority interest                                                        184             89
      Development costs written-off                                                           190
      Changes in operating assets and liabilities:
      Tenants' security accounts                                               (35)           (32)
      Sundry receivables, prepaid expenses and other assets                 (1,302)          (873)
      Accounts payable and accrued expenses                                  1,001           (113)
      Deferred charges                                                        (900)          (289)
      Tenants' security deposits                                                82             29
                                                                          --------       --------
                      Net cash provided by operating activities              4,814          4,815
                                                                          --------       --------
Investing activities:
     Capital expenditures                                                     (758)          (415)
     Distributions from affiliate                                            3,848             80
     Investment in mortgage loan                                              (750)
     Marketable securities redeemed                                                           500
     Acquisition of Damascus Center                                         (7,242)
                                                                          --------       --------
                      Net cash provided by(used in) investing activities    (4,902)           165
                                                                          --------       --------
Financing activities:
     Repayment of mortgages                                                   (746)          (722)
     Proceeds from shares of beneficial interest issued                        540
     Dividends paid                                                         (4,287)        (3,370)
     Distribution to minority interest                                        (115)          (237)
                                                                          --------       --------
                 Net cash used in financing activities                      (4,608)        (4,329)
                                                                          --------       --------
Net increase (decrease) in cash and cash equivalents                        (4,696)           651
Cash and cash equivalents, beginning of period                              11,930         13,187
                                                                          --------       --------
Cash and cash equivalents, end of period                                  $  7,234       $ 13,838
                                                                          ========       ========

Supplemental disclosure of cash flow data:
     Interest paid                                                        $  3,412       $  3,572
                                                                          ========       ========
     Income taxes paid                                                    $     15       $     15
                                                                          ========       ========
Supplemental schedule of non-cash investing and financing activities:

     Dividends declared but not paid                                      $  1,104       $    936
                                                                          ========       ========

</TABLE>

On July 31,  2003,  Damascus  Centre,  LLC,  an  entity  wholly  owned by FREIT,
acquired the 139,000 Sq. Ft. Damascus Shopping Center in Damascus, MD. The total
acquisition  cost of  $9,833,000  was  financed in part by the  assumption  of a
$2,591,000 first mortgage.



See Notes to Consolidated Financial Statements.

<PAGE>



         FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




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

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

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


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





                                                                       Ownership
                                                                        Interest
                                                                        --------

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

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




<PAGE>

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

                                                       July 31,      October 31,
                                                         2003           2002
                                                         ----           ----
                                                      (In thousands of dollars)
Balance sheet data:
Assets:
   Real estate and equipment, net                      $ 46,426       $ 13,673
   Other                                                  3,038          9,779
                                                       --------       --------
            Total assets                               $ 49,464       $ 23,452
                                                       ========       ========

Liabilities and members' equity:
Liabilities:
   Mortgage payable                                    $ 49,946       $ 14,794

   Other                                                    651            455
                                                       --------       --------
            Total liabilities                            50,597         15,249
                                                       --------       --------

Members' equity  (deficiency):

   Westwood Hills - deficiency                           (4,096)          (797)
   Wayne PSC-equity                                       2,963          9,000
                                                       --------       --------
            Total members' equity (deficiency)            (1,133)         8,203
                                                       --------       --------

            Total liabilities and members' equity      $ 49,464       $ 23,452
                                                       ========       ========

     FREIT - Investment in affiliates equity           $   (452)      $  3,283
                                                       ========       ========

<TABLE>
<CAPTION>

                                             Nine Months Ended           Three Months Ended
                                                 July 31,                    July 31,
                                           ---------------------       ---------------------
                                            2003          2002           2003        2002
                                            ----          ----           ----        ----
                                                       (In thousands of dollars)
<S>                                        <C>           <C>           <C>           <C>
Income Statement Data:
   Rental revenue                          $ 5,912       $ 2,377       $ 1,931       $   807

   Real estate operating expenses           (2,495)         (845)         (827)         (240)
                                           -------       -------       -------       -------
            Net operating Income             3,417         1,532         1,104           567
   Financing costs, net                     (2,589)a        (760)       (1,193)a        (253)
   Depreciation                               (546)         (280)         (182)          (95)
                                           -------       -------       -------       -------
            Net income(loss)               $   282       $   492       $  (271)      $   219
                                           =======       =======       =======       =======
            FREIT-Equity in income(loss) $   113       $   197       $  (108)      $    88
                                           =======       =======       =======       =======
</TABLE>

          a-2003 includes a one time charge of $457,000 for costs related to the
          re-finance of the Wayne PSC mortgage.


          On November 1, 2002, our newly formed 40% owned affiliate,  Wayne PSC,
          LLC  ("WPSC"),  completed  the  acquisition  of the  323,000  sq.  ft.
          Preakness  Shopping Center in Wayne,  NJ. Total  acquisition  costs of
          $35.5 million (including a $1.3 million capital


<PAGE>



          improvement  reserve)  were  financed in part by a $26.5 million first
          mortgage loan, and by $9 million of equity contributions  provided pro
          rata by the  members of WPSC,  with  FREIT's  contribution  being $3.6
          million.

          On June 30, 2003, WPSC re-financed its first mortgage with a new $32.5
          million, 13-year mortgage loan bearing a fixed interest rate of 6.04%.
          FREIT received $2.4 million of the net re-finance proceeds as a
          distribution from WPSC.

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

Note 3 - Property acquisition:

          On July 31,  2003,  Damascus  Centre,  LLC, an entity  wholly owned by
          FREIT, acquired the Damascus Shopping Center ("Damascus") in Damascus,
          MD. The total  acquisition cost of the shopping center of $9.8 million
          was  financed in part by the  assumption  of an existing  $2.6 million
          first mortgage loan and the balance of $7.2 million with cash.

Note 4 - Earnings per share:

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

          In computing diluted earnings per share for each of the nine and three
          month  periods ended July 31, 2003 and 2002,  the assumed  exercise of
          all of FREIT's outstanding stock options,  adjusted for application of
          the treasury stock method,  would have increased the weighted  average
          number of shares outstanding as shown in the table below:

<TABLE>
<CAPTION>
                                           Nine Months Ended            Three Months Ended
                                                July 31,                      July 31,
                                        ------------------------      ------------------------
                                          2003            2002          2003           2002
                                          ----            ----          ----           ----
<S>                                     <C>            <C>            <C>            <C>
Basic weighted average shares
         outstanding                    3,128,576      3,119,576      3,137,576      3,119,576
Shares arising from assumed
         exercise of stock options        153,929         61,403        152,429         95,106

Dilutive weighted average shares
         outstanding                    ---------      ---------      ---------      ---------
                                        3,282,505      3,180,979      3,290,005      3,214,682
                                        =========      =========      =========      =========
</TABLE>


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

<PAGE>

                                                                         Page 10

Note 5- Equity incentive plan:

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

          Upon ratification of the Plan on April 7,1999, FREIT issued 377,000
          stock options which it had previously granted to key personnel on
          September 10, 1998. The fair value of the options on the date of grant
          was $15 per share.

          On May 23, 2003 options to purchase 36,000 shares of beneficial
          interest were exercised at a price of $15 per share. As of July 31,
          2003 options for 341,000 shares of beneficial interest are outstanding
          and are exercisable through September 2008.

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



Note 6 - Segment information:

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

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

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

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

          Real estate  rental  revenue,  operating  expenses,  NOI and recurring
          capital  improvements for the reportable segments are summarized below
          and  reconciled  to  consolidated  net  income  for the nine and three
          months ended July 31, 2003 and 2002. Asset information is not reported
          since the Trust does not use this measure to assess performance.

<PAGE>


<TABLE>
<CAPTION>

                                              Nine Months Ended            Three Months Ended
                                                   July 31,                     July 31,
                                             2003           2002           2003           2002
                                             ----           ----           ----           ----
                                                         (in thousands of dollars)
<S>                                        <C>            <C>            <C>            <C>
Real estate revenue:
  Retail                                   $  9,527       $  9,020       $  3,297       $  2,997
  Residential                                 4,922          4,727          1,669          1,609
                                           --------       --------       --------       --------
               Totals                        14,449         13,747          4,966          4,606
                                           --------       --------       --------       --------
Real estate operating expenses:
  Retail                                      2,992          2,854          1,035          1,090
  Residential                                 2,067          1,820            680            542
                                           --------       --------       --------       --------
               Totals                         5,059          4,674          1,715          1,632
                                           --------       --------       --------       --------
Net operating income:                                                                          `
  Retail                                      6,535          6,166          2,262          1,907
  Residential                                 2,855          2,907            989          1,067
                                           --------       --------       --------       --------
               Totals                      $  9,390       $  9,073       $  3,251       $  2,974
                                           ========       ========       ========       ========

Recurring capital improvements:
  Residential                              $    265       $    209       $     98       $     84
                                           ========       ========       ========       ========

Reconciliation to consolidated
  net income:
  Segment NOI                              $  9,390       $  9,073       $  3,251       $  2,974
  Deferred rents - straight-lining              132            266             37             80
  Net investment income                         139            183             45             60
  Equity in income(loss) of affiliates          113            197           (108)            88
  General and administrative expenses          (444)          (349)           (98)          (133)
  Depreciation                               (1,601)        (1,609)          (534)          (538)
  Discontinued operations                        --            (33)            --            (10)
  Financing costs                            (3,505)        (3,661)        (1,167)        (1,220)
  Minority interest                            (184)           (89)           (52)             3
                                           --------       --------       --------       --------

             Net Income                    $  4,040       $  3,978       $  1,374       $  1,304
                                           ========       ========       ========       ========
</TABLE>


Note 7 - Interest Rate Swap Contract:
          During  November  2002,  FREIT  negotiated to lower the fixed interest
          rate on a first mortgage secured by its Patchogue, NY property and was
          offered a lower,  floating  interest rate by the lender. To reduce the
          impact of interest rate  fluctuations,  FREIT entered into an interest
          rate swap. In accordance with SFAS 133, FREIT recorded a liability for
          the net  present  value of the  increase  in  interest  cost  over the
          remaining  terms of the debt of $152,000 at July 31, 2003. Such amount
          is included in comprehensive income.

Note 8- Discontinued operations:
          On August 9, 2002,  FREIT sold the Sheridan  Apartments in Camden,  NJ
          for  cash  of  $1,050,000  and  recognized  a  gain  of  approximately
          $475,000. FREIT had owned and operated the property since 1964.

          Summarized  operating  results included in discontinued  operations in
          the  accompanying  consolidated  statements of income for the nine and
          three months ended July 31, 2002 is as follows (in thousands):

<PAGE>

                  |  Nine Months Ended       Three Months Ended
                  |    July 31, 2002            July 31, 2002
                  |    -------------            -------------
Revenue           |        $ 511                   $ 183
Expenses          |         (544)                   (193)
                  |        -----                   -----
Net Income (Loss) |        $ (33)                  ($ 10)
                  |        =====                   -----









Note 9- Subsequent event:
          On August 20, 2003 FREIT placed  add-on  second  mortgages on three of
          its residential properties.  The mortgages aggregated approximately $7
          million  bearing an average fixed interest rate of 5.2%. The mortgages
          are due co-terminus  with the underlying  first mortgage loans.  FREIT
          received net financing proceeds of approximately $6.9 million.





                                      * * *

<PAGE>



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

================================================================================
          Cautionary Statement Identifying Important Factors That Could
           Cause FREIT's Actual Results to Differ From Those Projected
                         in Forward Looking Statements.


          Readers of this  discussion are advised that the discussion  should be
          read  in  conjunction  with  the  unaudited   condensed   consolidated
          financial  statements  of  FREIT  (including  related  notes  thereto)
          appearing elsewhere in this Form 10-Q, and the consolidated  financial
          statements  included in FREIT's most recently filed Form 10-K. Certain
          statements  in  this   discussion  may   constitute   "forward-looking
          statements"  within the meaning of the Private  Securities  Litigation
          Reform Act of 1995. Forward-looking statements reflect FREIT's current
          expectations   regarding   future  results  of  operations,   economic
          performance, financial condition and achievements of FREIT, and do not
          relate  strictly  to  historical  or current  facts.  FREIT has tried,
          wherever  possible,  to identify these  forward-looking  statements by
          using words such as  "believe,"  "expect,"  "anticipate,"  "intend,  "
          "plan," " estimate," or words of similar meaning.

          Although  FREIT  believes  that  the  expectations  reflected  in such
          forward-looking  statements are based on reasonable assumptions,  such
          statements are subject to risks and uncertainties, which may cause the
          actual results to differ materially from those projected. Such factors
          include,  but are not limited to, the following:  general economic and
          business conditions, which will, among other things, affect demand for
          rental space, the availability of prospective tenants, lease rents and
          the availability of financing;  adverse changes in FREIT's real estate
          markets,  including,  among other things,  competition with other real
          estate  owners,  risks of real estate  development  and  acquisitions;
          governmental   actions  and  initiatives;   and   environmental/safety
          requirements.
================================================================================

Overview

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

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

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

<PAGE>



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

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

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

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

Results of Operations:

Nine months and Quarters Ended July 31, 2003 and 2002

Summary Income Statement & Component Data
<TABLE>
<CAPTION>
                                              Nine Months Ended                          Quarter Ended
                                                   July 31,            Increase             July 31,               Increase
                                            ----------------------                    ---------------------
                                              2003          2002      (Decrease)       2003            2002       (Decrease)
                                              ----          ----      ----------       ----            ----       ----------
<S>                                         <C>           <C>          <C>            <C>            <C>           <C>
Revenue                                                                        ($000)
  Real estate operations                    $ 14,581      $ 14,010     $    571       $  5,003       $  4,683      $    320
  Equity in income (loss) of affiliates          113           197          (84)          (108)            88          (196)
  Net investment income                          139           183          (44)            45             60           (15)
                                            --------      --------     --------       --------       --------      --------
    Total revenue                             14,833        14,390          443          4,940          4,831           109
                                            --------      --------     --------       --------       --------      --------

Expenses
  Real estate operations                       6,842         6,369          473          2,301          2,170           131
  Financing costs                              3,505         3,661         (156)         1,167          1,220           (53)
  Gen'l & administrative expenses                446           349           97             98            127           (29)
                                            --------      --------     --------       --------       --------      --------
    Total expenses                            10,793        10,379          414          3,566          3,517            49
                                            --------      --------     --------       --------       --------      --------
      Income from continuing operations        4,040         4,011           29          1,374          1,314            60
    Discontinued Operations                                    (33)          33                           (10)           10
                                            --------      --------     --------       --------       --------      --------
  Net Income                                $  4,040      $  3,978     $     62       $  1,374       $  1,304      $     70
                                            ========      ========     ========       ========       ========      ========

</TABLE>


<PAGE>




Revenue for the quarter ended July 31, 2003 ("Current  Quarter")  increased 2.3%
to $4,940,000  from  $4,831,000 for the prior year's quarter ended July 31, 2002
("Prior  Year's  Quarter").  Income from  continuing  operations for the Current
Quarter  increased  4.6% to  $1,374,000  from  $1,314,000  for the Prior  Year's
Quarter.

Income  from  continuing  operations  for the nine  months  ended July 31,  2003
("Current Nine Months") was $4,040,000 on revenue of $14,833,000.  This compares
to income from  continuing  operations  for the nine months  ended July 31, 2002
("Prior Year's Nine Months") of $4,011,000 on revenue of $14,390,000.

The consolidated  results of operations for the nine and three months ended July
31, 2003 are not  necessarily  indicative  of the results to be expected for the
full year.

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

RETAIL SEGMENT:  FREIT's retail  properties during the current reporting periods
consisted of six (6) properties (excluding the Damascus shopping center acquired
on July 31,2003). totaling approximately 686,000 sq. ft. Four are multi-tenanted
shopping  centers  and two are single  tenanted  stores.  Their  operations  are
summarized below:

<TABLE>
<CAPTION>
Retail Segment                          Nine Months Ended             Three Months Ended
                                            July 31,                       July 31,
                                      2003            2002           2003            2002
                                      ----            ----           ----            ----
                                                    (in thousands of dollars)
<S>                                  <C>             <C>             <C>             <C>
Revenues
  Minimum & Percentage Rents         $7,099          $6,871          $2,402          $2,330
  Reimbursements                      2,422           2,060             894             665
  Other                                   6              89               1               2
                                     ------          ------          ------          ------
    Total Revenues                    9,527           9,020           3,297           2,997
                                     ------          ------          ------          ------

Operating Expenses                    2,992           2,854           1,035           1,090

                                     ------          ------          ------          ------
    Net operating income             $6,535          $6,166          $2,262          $1,907
                                     ======          ======          ======          ======

Average Occupancy %                    93.0%           97.1%           92.9%           96.7%
                                     ======          ======          ======          ======
</TABLE>


Minimum and  percentage  rents at FREIT's retail  properties  increased 3.3% and
3.1% during the Current Nine Months and Current Quarter respectively compared to
the comparable prior periods. The increase in rents resulted from increased base
rents,  and rents from  tenant's that were not in occupancy for the full quarter
last year. The increase in  reimbursements  is principally  the result of higher
expenses that are passed through to tenants,  plus back billings of reimbursable
expenses.  These revenue  increases have occurred even though overall  occupancy
has fallen - see below.

After  adjusting  2002 costs for  $190,000  of costs  related  to the  expansion
project abandoned at our Olney property,  operating  expenses  increased 12% and
15%  for the  Current  Nine  Months  and  Current  Quarter  respectively.  These
increases are  principally  winter related  resulting in higher snow removal and
utility costs during our first two fiscal quarters,  and higher  landscaping and
clean-up costs during the third quarter.

In February  2003,  without any notice,  a major  tenant in one of our  shopping
centers closed their store and ceased paying rent and additional rent, and is in
default of both monetary and non-monetary provisions of their lease.

<PAGE>



Annual rent and other charges from this tenant approximate  $480,000 per year. A
lease termination  agreement has been reached with the tenant whereby the tenant
will pay FREIT $1.7  million  to  terminate  the  lease.  As of the date of this
report we await approval of this termination agreement by the mortgage lender on
the property.


During May 2003, at our Westwood Plaza Shopping Center/ Westwood,  N.J.,  TJMaxx
took occupancy of the space vacated by Stop and Shop and began paying rent.

Acquisition of Damascus Shopping Center.

On July 31,  2003,  Damascus  Centre,  LLC,  an  entity  wholly  owned by FREIT,
acquired the Damascus Shopping Center in Damascus, MD.

The Shopping Center is situated on 13 acres, and contains  approximately 139,000
SF of retail and office space. A Safeway supermarket is the anchor tenant.

The  total  acquisition  costs of $10.3  million  were  financed  in part by the
assumption of an existing  $2.6 million  first  mortgage loan and the balance of
$7.7 Million with equity capital. Included in the acquisition costs is an amount
paid to an existing tenant to terminate its lease as of December 31, 2003. FREIT
is  considering  offering  an  interest in this  investment  to a joint  venture
partner owned by employees of Hekemian & Co., Inc., FREIT's managing agent.

FREIT  plans to demolish  the  existing  buildings,  with the  exception  of the
freestanding  McDonald's  restaurant.  The  construction of a Shopping Center of
approximately  145,000  SF is  planned,  of which  58,000 SF is  expected  to be
occupied by a new,  prototype  Safeway  Supermarket.  A smaller building will be
constructed on an out parcel,  which will accommodate the office tenants as well
as some smaller, retail space. This plan to construct a new center is subject to
obtaining  all  approvals  and  building  permits  from  the  various  governing
authorities.  If  all  approvals  are  obtained,  total  development  costs  are
estimated at  approximately  $13 million.  Construction is not expected to begin
before January 2005. During the holding period until  construction  begins,  the
center is not expected to make a significant contribution to FREIT's earnings or
cash flow.

Since the center was acquired on July 31, 2003,  no operations of the center are
included in our results of operations for the nine months ended July 31, 2003.




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

<PAGE>



<TABLE>
<CAPTION>

Residential Segment                 Nine Months Ended             Three Months Ended
                                         July 31,                        July 31,
                                   2003            2002            2003           2002
                                   ----            ----            ----           ----
                                                 (in thousands of dollars)
<S>                               <C>             <C>             <C>             <C>
Revenues
  Rents                           $4,865          $4,667          $1,647          $1,588
  Other                               57              60              22              21
                                  ------          ------          ------          ------
    Total Revenues                 4,922           4,727           1,669           1,609
                                  ------          ------          ------          ------

Operating Expenses                 2,067           1,820             680             542
                                  ------          ------          ------          ------
    Net operating income          $2,855          $2,907          $  989          $1,067
                                  ======          ======          ======          ======
Average Occupancy %                 96.7%           96.4%           97.5%           96.8%
                                  ======          ======          ======          ======
Recurring capital
    improvements                  $  265          $  209          $   98          $   84
                                  ======          ======          ======          ======

</TABLE>

Residential  revenue has increased 4.1% and 3.7% for the Current Nine Months and
Current Quarter  respectively  compared to the comparable prior periods.  Higher
monthly rents, in spite of scattered  concessions  were the principal reason for
the  increase.  Revenue is  principally  composed  of monthly  apartment  rental
income.  Total  apartment  rental  income is a factor of  occupancy  and monthly
apartment rents. For instance,  at rental rates and occupancy levels at July 31,
2003,  a 1%  increase  or  decrease  in average  occupancy  will cause an annual
$67,000  increase or reduction  in revenues,  while a 1% increase or decrease in
rental  rates  will  cause an annual  $66,100  increase  or  decrease  in annual
revenues.

Average  occupancy of 97.5% during the Current  Quarter was an increase over the
Prior Year's Quarter.  The Current  Quarter's  average occupancy was also higher
than FREIT's prior quarter ended April 30, 2003, raising the Current Nine Months
occupancy  levels to 96.7%,  higher than the Prior  Year's Nine Month  occupancy
level.

During the Current Nine Months and Current Quarter operating  expenses increased
13.6%  and  25.5%  respectively  over  prior  year's  comparable  periods.  As a
percentage of revenue, operating expenses for the Current Nine Months were 42.0%
of revenue compared to 38.5% for the Prior Year's Nine Months period.  Increases
in snow removal and utility costs, because of the recent severe winter, which we
experienced,  in addition to increased  landscaping  costs and apartment  fix-up
costs were the principal reasons for the expense increase.

Because revenue  increases were not sufficient to cover the increased costs, NOI
from our residential properties fell 1.8% from year earlier levels. We feel that
the firming occupancy, coupled with elimination of concessions,  will, in future
periods, result in operating results that exceed prior periods.


<PAGE>



EQUITY IN INCOME OF AFFILIATES

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

<TABLE>
<CAPTION>


                                                  Nine Months Ended                 Three Months Ended
                                                       July 31,                            July 31,
                                              --------------------------          -------------------------
Income Statement Data:                          2003              2002             2003               2002
                                                ----              ----             ----               ----
                                                                 (In thousands of dollars)
<S>                                            <C>               <C>              <C>               <C>
Rental revenue
   Westwood Hills                              $ 2,431           $ 2,377          $   819           $   807
   Wayne PSC                                     3,481                --            1,112                --
                                               -------           -------          -------           -------
           Total revenue                         5,912             2,377            1,931               807


Real estate operating expenses
   Westwood Hills                                1,251             1,125              405               335
   Wayne PSC                                     1,790                --              604                --
                                               -------           -------          -------           -------
           Total real estate expenses            3,041             1,125            1,009               335
                                               -------           -------          -------           -------

Income before financing costs
   Westwood Hills                                1,180             1,252              414               472
   Wayne PSC                                     1,691                --              508                --
                                               -------           -------          -------           -------
   Total income before financing costs           2,871             1,252              922               472


Financing costs
   Westwood Hills                                  881               760              303               253
   Wayne PSC                                     1,708(a)             --              890(a)             --
                                               -------           -------          -------           -------
     Total financing costs                       2,589               760            1,193               253
                                               -------           -------          -------           -------

Net income (loss)
   Westwood Hills                                  299               492              111               219
   Wayne PSC                                       (17)               --             (382)               --
                                               -------           -------          -------           -------
           Net income(loss)                    $   282           $   492          $  (271)          $   219
                                               =======           =======          =======           =======
FREIT's share of net income(loss)              $   113           $   197          $  (108)          $    88
                                               =======           =======          =======           =======
Occupancy:
   Westwood Hills                                 96.0%             97.2%            96.0%             97.8%
                                               -------           -------          -------           -------
   Wayne PSC                                      91.1%                              97.0%
                                               -------                            -------

</TABLE>

     a- 2003  includes a one-time  charge of  $457,000  in costs  related to the
        re-finance of the Wayne PSC mortgage.

Net income at Westwood  Hills fell 39.2% to $299,000 for the Current Nine Months
from $492,000 for the Prior Year's Nine Months.  The reduction  results from two
factors:  1) while  revenues  increased  2.3% over last year,  the  increase was
insufficient  to cover the 11.2%  increase in expenses  directly  related to the
severity of the recent

<PAGE>



winter and, 2) the financing  costs related to the $3.4 million second  mortgage
added in January 2003.  FREIT received,  as a distribution,  approximately  $1.4
million of the net financing proceeds. The cost of this financing will be to add
approximately $212,000 of financing costs to Westwood Hills operations in fiscal
2003. While FREIT bears 40% of this additional  financing cost,we feel this cost
will be offset by the income FREIT will ultimately earn from investing its $1.4
million  distribution.

On  November  1, 2002,  Wayne PSC  closed on the  acquisition  of the  Preakness
Shopping  Center.  Income before financing costs was $1,691,000 and $508,000 for
the Current Nine Months and Current  Quarter  respectively.  Earnings,  however,
were  burdened by  one-time  re-financing  costs (see  below) of  $457,000  that
resulted  in a net loss of $17,000  for the  Current  Nine  Months and a loss of
$382,000 for the Current Quarter. FREIT shares in 40% of these losses.

On June 30, 2003 Wayne PSC refinanced its original $26.5 million first mortgage
with a new $32.5  million  mortgage  loan.  The term of the new loan will be for
thirteen (13) years,  with  interest  fixed at 6.04 %, and the loan will require
interest  only  payments for the first three years and  thereafter  be amortized
over a 25-year life. FREIT received $2.4 million of the net refinance  proceeds
as a distribution  from Wayne PSC.  Because there is no  amortization of the new
loan over the first 36 months, debt service will be less than under the original
loan  during this  period.  We feel that the  benefits  of locking in attractive
long-term  interest rates,  coupled with the income potential from investing the
cash  received in the future real estate  acquisitions,  outweighs the financing
costs incurred.


FINANCING COSTS

Financing Costs for the Current Nine Months and Current  Quarter  decreased 4.3%
respectively   from  the  comparable  prior  period  levels.   The  decrease  is
principally attributable to reduced interest costs resulting from lower mortgage
balances  from normal loan  amortization  and because of FREIT's  $10.9  million
floating  rate  mortgage  (Olney)   benefiting  from  the  lower  interest  rate
environment this year compared to last year.


                            Nine Months Ended            Three Months Ended
                                 July 31,                      July 31,
                          ----------------------        ----------------------
                            2003           2002          2003            2002
                            ----           ----          ----            ----
                                          (thousands of dollars)

Fixed rate mortgages       $3,198         $3,342         $1,056         $1,109
Floating rate mortgage        266            310             83            107
Other                          41              9             28              4
                           ------         ------         ------         ------
                           $3,505         $3,661         $1,167         $1,220
                           ======         ======         ======         ======


Interest Rate Swap Contract

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

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

FAS 133  requires us to  mark-to-market  fixed pay interest  rate swaps.  As the
floating  interest rate varies from  time-to-time over the term of the contract,
the value of the contract will change  upward or downward.  If the


<PAGE>




floating  rate is higher than the fixed rate the value of the  contract  goes up
and there is a gain and an asset.  If the  floating  rate is less than the fixed
rate, there is a loss and a liability. These gains or losses will not affect our
income  statement.  Changes in the fair value of these  swap  contracts  will be
reported  in  earnings  of other  comprehensive  income and appear in the equity
section of our balance sheet.

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

GENERAL ADMINISTRATIVE EXPENSES

Our G & A expenses  for the Current  Nine Months  increased  by $97,000 over the
prior  year's  comparable  period.  The increase was due to increases in FREIT's
officers and Trustee's fees.


LIQUIDITY AND CAPITAL RESOURCES

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

                                    ------------------------------------
                                    For The Nine Months Ended July 31,
                                    ------------------------------------
                                        2003                2002
                                        ----                ----
                                        (Amounts in thousands)

        Operating activities        $      4,814       $        4,815
                                    =============      ===============
        Investing activities        $     (4,902)      $           165
                                    =============      ===============
        Financing activities*       $     (4,608)      $       (4,329)
                                    =============      ===============

      * Including dividends paid of $4,287,000 and $3,370,000 respectively.
      ---------------------------------------------------------------------

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

As at July 31,  2003,  we had cash and cash  equivalents  totaling  $7.2 million
compared  to $11.9  million at October  31,  2002.  This  reduction  principally
results from  utilizing  $7.7 million to purchase the Damascus  Shopping  Center
property,  off-set by FREIT receiving  distributions from its affiliates of $3.8
million, generated from mortgage financings.

As previously reported, we are planning the construction of 129 apartment rental
units in Rockaway,  NJ., and the reconstruction of our Damascus Shopping Center.
The total capital  required for these projects is estimated at $13.8 million and
$13  million  respectively.  We expect to finance  these  costs,  in part,  from
construction  and mortgage  financing and, in part,  from funds available in our
institutional money market investment.

At July 31, 2003 FREIT's aggregate outstanding mortgage debt was $70.2 million.
Approximately  $59.4 million  bears a fixed  weighted  average  interest rate of
7.422%, and an average life of approximately 7.9 years.

Approximately $10.9 million of mortgage debt bears an interest rate equal to 175
basis points over LIBOR and resets at our option  every 30, 60 or 90 days.  This
mortgage  note,  which was due at the end of March 2003,  has been  extended for
two,  three  month  periods  to allow for the time  necessary  to  complete  the
documentation of a permanent mortgage  extension.  The due date of the loan will
be extended to June 2006, with interest to reset


<PAGE>
                                                                         Page 21

monthly at 200 basis  points  over the  one-month  LIBOR.  Monthly  amortization
payments to be fixed at $15,000.  At our option we can, at any time,  enter into
an interest rate swap and fix the interest rate.

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

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


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

                                   $ Millions
                                   ----------
                    2012            $    24.5
                    2014            $    13.8


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

                                                  July 31,        October 31,
                     (In Millions)                  2003             2002
                     -------------                  ----             ----

                     Fair Value                    $75.6            $73.5
                     Carrying Value                $70.2            $68.4

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

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

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

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


<PAGE>



To create additional liquidity and lock in favorable long-term interest rates we
continue to take  advantage  of the Freddie Mac second  mortgage  program.  This
program  allows  add-ons to existing  Freddie Mac first  mortgages to the extent
justified  by increased  values and cash flows.  On August 20, 2003 FREIT placed
add-on  second  mortgages  on three of its  residential  properties.  The second
mortgage loans aggregated approximately $7 million bearing an average fixed rate
of 5.2%.  The due dates of the second  mortgage loans are  co-terminus  with the
underlying  first  mortgage  loans.  FREIT  received net  financing  proceeds of
approximately $6.9 million.

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


INFLATION

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

Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See "Liquidity and Capital Resources" above.



Item 4: Controls and Procedures

As of the end of the period  covered by this  quarterly  report on form 10-Q, we
carried out an  evaluation of the  effectiveness  of the design and operation of
FREIT's  disclosure  controls and  procedures.  This  evaluation was carried out
under the supervision and with  participation of FREIT's  management,  including
FREIT's Chairman and Chief Executive  Officer and Chief Financial  Officer,  who
concluded that FREIT's disclosure controls and procedures are effective.  During
FREIT's  last  fiscal  quater,  there  have been no change in  FREIT's  internal
control over financial reporting that has materialy affected,  or is reasonably
likely to materialy 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 6. Exhibits and Reports on Form 8-K

During the third quarter ended July 31, 2003, the following reports on Form 8-K
were filed with the SEC:

     Form 8-K (Item 5. Other  Events),  date of earliest event reported June 17,
     2003 FREIT reported to its shareholders  its operating  results for the six
     months and three months ended April 30, 2003.


<PAGE>



                                  Exhibit Index

     Exhibit 31.1 Section 302 Certification of Chief Executive Officer
     Exhibit 31.2 Section 302 Certification of Chief Financial Officer

     Exhibit 31.1 Certification of Chief Executive Officer to 18 U.S.C. 1350
     Exhibit 31.2 Certification of Chief Financial Officer to 18 U.S.C. 1350

<PAGE>


                                   SIGNATURES
                                   ----------

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



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

Date: September 15, 2003
                               /s/ Robert S. Hekemian
                               ----------------------
                                   (Signature)
                               Robert S. Hekemian.
                               Chairman of the Board and Chief Executive
                               Officer


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