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 April 30, 2010


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 xNo o




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).     Yes o  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).


Yes o  No x




As of
June 9, 2010, the number of shares of beneficial interest outstanding was
6,942,143
















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 April 30, 2010 and
      October 31, 2009;
            3b.)
            Condensed Consolidated Statements of Income for the Six and
      Three Months Ended April 30, 2010 and 2009;
            4c.)
            Condensed Consolidated Statement of Equity for the Period Ended
      April 30, 2010;
            5d.)
            Condensed Consolidated Statements of Cash Flows for the Six
      Months Ended April 30, 2010 and 2009;
            6e.)
            Notes to Condensed Consolidated Financial
      Statements.
            7Item 2:
            Management’s Discussion and Analysis of Financial Condition and
      Results of Operations
            11Item 3:
            Quantitative and Qualitative Disclosures About Market
      Risk
            21Item 4:
            Controls and Procedures
            21Part II:
            Other InformationItem 1:
            Legal Proceedings
            21Item 1A:
            Risk Factors
            21Item 6:
            Exhibits
            21Signatures
            22











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)April
      30,
              
              
              October
      31,2010
              
              
              2009(In
      Thousands of Dollars)ASSETSReal
      estate, at cost, net of accumulated depreciation
              
              $
              212,780
              
              
              $
              214,283Construction
      in progress and pre-development costs
              
              
              9,745
              
              
              
              9,694Cash
      and cash equivalents
              
              
              6,219
              
              
              
              6,751Investments
      in US Treasury Bills at amortized cost,which
      approximates fair value
              
              
              -
              
              
              
              4,549Tenants'
      security accounts
              
              
              2,102
              
              
              
              2,147Sundry
      receivables
              
              
              5,012
              
              
              
              4,440Secured
      loans receivable
              
              
              3,326
              
              
              
              3,326Prepaid
      expenses and other assets
              
              
              2,427
              
              
              
              3,198Acquired
      over market leases and in-place lease costs
              
              
              594
              
              
              
              670Deferred
      charges, net
              
              
              2,843
              
              
              
              2,793Total
      Assets
              
              $
              245,048
              
              
              $
              251,851LIABILITIES &
      EQUITYLiabilities:Mortgages
      payable
              
              $
              197,889
              
              
              $
              202,260Accounts
      payable and accrued expenses
              
              
              7,028
              
              
              
              7,496Dividends
      payable
              
              
              2,083
              
              
              
              2,083Tenants'
      security deposits
              
              
              2,786
              
              
              
              2,847Acquired
      below market value leases and deferred revenue
              
              
              3,120
              
              
              
              3,049Total
      liabilities
              
              
              212,906
              
              
              
              217,735Commitments
      and contingenciesEquity:Common
      equity:Shares
      of beneficial interest without par value:8,000,000
      shares authorized; 6,993,152 shares issued
              
              
              24,969
              
              
              
              24,969Treasury
      stock, at cost: 51,009 shares
              
              
              (1,135
              )
              
              
              (1,135
              )Dividends
      in excess of net income
              
              
              (4,975
              )
              
              
              (3,112
              )Total
      common equity
              
              
              18,859
              
              
              
              20,722Noncontrolling
      interests in subsidiaries
              
              
              13,283
              
              
              
              13,394Total
      equity
              
              
              32,142
              
              
              
              34,116Total
      Liabilities & Equity
              
              $
              245,048
              
              
              $
              251,851See
      Notes to Condensed Consolidated Financial Statements.





Page
3
 Index


FIRST
      REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND
      SUBSIDIARIESCONDENSED
      CONSOLIDATED STATEMENTS OF INCOMESIX
      AND THREE MONTHS ENDED APRIL 30, 2010 AND 2009(Unaudited)  Six
      Months Ended
                
                
                Three
      Months EndedApril
      30,
                
                
                April
      30,2010
                
                
                2009
                
                
                2010
                
                
                2009(In
      Thousands of Dollars, Except Per Share Amounts)Revenue:Rental
      income
                
                $
                19,122
                
                
                $
                18,391
                
                
                $
                9,788
                
                
                $
                9,200Reimbursements
                
                
                2,890
                
                
                
                2,641
                
                
                
                1,456
                
                
                
                1,236Sundry
      income
                
                
                197
                
                
                
                287
                
                
                
                116
                
                
                
                134Totals
                
                
                22,209
                
                
                
                21,319
                
                
                
                11,360
                
                
                
                10,570Expenses:Operating
      expenses
                
                
                6,258
                
                
                
                5,749
                
                
                
                3,335
                
                
                
                3,049Management
      fees
                
                
                973
                
                
                
                934
                
                
                
                504
                
                
                
                471Real
      estate taxes
                
                
                3,315
                
                
                
                3,184
                
                
                
                1,659
                
                
                
                1,592Depreciation
                
                
                3,065
                
                
                
                2,937
                
                
                
                1,543
                
                
                
                1,463Totals
                
                
                13,611
                
                
                
                12,804
                
                
                
                7,041
                
                
                
                6,575Operating
      income
                
                
                8,598
                
                
                
                8,515
                
                
                
                4,319
                
                
                
                3,995Investment
      income
                
                
                66
                
                
                
                130
                
                
                
                30
                
                
                
                51Interest
      expense including amortizationof
      deferred financing costs
                
                
                (5,781
                )
                
                
                (5,381
                )
                
                
                (2,919
                )
                
                
                (2,666
                )Net
      income
                
                
                2,883
                
                
                
                3,264
                
                
                
                1,430
                
                
                
                1,380Net
      income attributable to noncontrolling interests in
      subsidiaries
                
                
                (581
                )
                
                
                (658
                )
                
                
                (300
                )
                
                
                (295
                )Net
      income attributable to common equity
                
                $
                2,302
                
                
                $
                2,606
                
                
                $
                1,130
                
                
                $
                1,085Earnings
      per share (attributable to common equity):Basic
                
                $
                0.33
                
                
                $
                0.38
                
                
                $
                0.16
                
                
                $
                0.16Weighted
      average shares outstanding
                
                
                6,942
                
                
                
                6,945
                
                
                
                6,942
                
                
                
                6,942See
      Notes to Condensed Consolidated Financial Statements.





Page
4
 Index




FIRST
      REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND
      SUBSIDIARIESCONDENSED
      CONSOLIDATED STATEMENT OF EQUITY(Unaudited)  Common
      EquityShares
      of Beneficial Interest
                
                
                Treasury
      Shares at Cost
                
                
                Dividends
      in Excess of Net Income
                
                
                Total
      CommonEquity
                
                
                NoncontrollingInterests
                
                
                Total
      Equity(In
      Thousands of Dollars)Balance
      at October 31, 2009
                
                $
                24,969
                
                
                $
                (1,135
                )
                
                $
                (3,112
                )
                
                $
                20,722
                
                
                $
                13,394
                
                
                $
                34,116Distributions
      to noncontrolling interests
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (692
                )
                
                
                (692
                )Net
      income
                
                
                
                
                
                
                
                
                
                
                2,302
                
                
                
                2,302
                
                
                
                581
                
                
                
                2,883Dividends
      declared ($0.60 per share)
                
                
                
                
                
                
                
                
                
                
                (4,165
                )
                
                
                (4,165
                )
                
                
                
                
                
                
                (4,165
                )Balance
      at April 30, 2010
                
                $
                24,969
                
                
                $
                (1,135
                )
                
                $
                (4,975
                )
                
                $
                18,859
                
                
                $
                13,283
                
                
                $
                32,142See
      Notes to Condensed Consolidated Financial Statements.











Page
5
 Index


FIRST
      REAL ESTATE INVESTMENT TRUST OF NEW JERSEY AND
      SUBSIDIARIESCONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWSSIX
      MONTHS ENDED APRIL 30, 2010 AND 2009(Unaudited)  Six
      Months EndedApril
      30,2010
                
                
                2009(In
      Thousands of Dollars)Operating
      activities:Net
      income
                
                $
                2,883
                
                
                $
                3,264Adjustments
      to reconcile net income to net cash provided byoperating
      activities:Depreciation
                
                
                3,065
                
                
                
                2,937Amortization
                
                
                242
                
                
                
                232Net
      amortization of acquired leases
                
                
                15
                
                
                
                18Deferred
      revenue
                
                
                106
                
                
                
                (237
                )Changes
      in operating assets and liabilities:Tenants'
      security accounts
                
                
                45
                
                
                
                111Sundry
      receivables, prepaid expenses and other assets
                
                
                91
                
                
                
                276Accounts
      payable, accrued expenses and other liabilities
                
                
                782
                
                
                
                615Tenants'
      security deposits
                
                
                (61
                )
                
                
                (67
                )Net
      cash provided by operating activities
                
                
                7,168
                
                
                
                7,149Investing
      activities:Capital
      improvements - existing properties
                
                
                (955
                )
                
                
                (1,048
                )Construction
      and pre-development costs
                
                
                (1,813
                )
                
                
                (2,519
                )Decrease
      in investment in US Treasury Bills
                
                
                4,549
                
                
                
                -Net
      cash provided by (used in) investing activities
                
                
                1,781
                
                
                
                (3,567
                )Financing
      activities:Repayment
      of mortgages
                
                
                (4,450
                )
                
                
                (1,160
                )Proceeds
      from mortgages and construction loans
                
                
                -
                
                
                
                1,628Deferred
      financing costs
                
                
                (174
                )
                
                
                7Repurchase
      of Company stock-Treasury shares
                
                
                -
                
                
                
                (59
                )Dividends
      paid
                
                
                (4,165
                )
                
                
                (4,166
                )Distributions
      to noncontrolling interests
                
                
                (692
                )
                
                
                (563
                )Net
      cash used in financing activities
                
                
                (9,481
                )
                
                
                (4,313
                )Net
      decrease in cash and cash equivalents
                
                
                (532
                )
                
                
                (731
                )Cash
      and cash equivalents, beginning of period
                
                
                6,751
                
                
                
                8,192Cash
      and cash equivalents, end of period
                
                $
                6,219
                
                
                $
                7,461Supplemental
      disclosure of cash flow data:Interest
      paid, including capitalized construction period interestof
      $87 in fiscal 2009.
                
                $
                5,416
                
                
                $
                5,205Supplemental
      schedule of non cash activities:Investing
      activities:Accrued
      capital expenditures, construction costs, pre-development costs and
      interest
                
                $
                1
                
                
                $
                1,477Financing
      activities:Dividends
      declared but not paid
                
                $
                2,083
                
                
                $
                2,083See
      Notes to Condensed Consolidated Financial Statements.





Page
6
 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 six and three-month periods ended
April 30, 2010 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,
2009 of First Real Estate Investment Trust of New Jersey (“FREIT”).





Note 2 –
Significant accounting policies:













Adopted
and recently issued accounting standards:




On
December 4, 2007, the FASB issued two new accounting standards, “Business
Combinations” (ASC 805-10), and “Non-Controlling Interests in Consolidated
Financial Statements – an amendment of ARB No. 51” (ASC 810-10). The standards
are effective for fiscal years beginning after December 15, 2008 and earlier
adoption was prohibited.




·
            The
      objective of ASC 805 is to improve the relevance, representational
      faithfulness, and comparability of the information that a reporting entity
      provides in its financial reports about a business combination and its
      effects. To accomplish that, this Statement establishes principles and
      requirements for how the acquirer:




a.)
            Recognizes
      and measures in its financial statements the identifiable assets acquired,
      the liabilities assumed, and any non-controlling interest in the
      acquiree;




b.)
            Recognizes
      and measures the goodwill acquired in the business combination or a gain
      from a bargain purchase;




c.)
            Determines
      what information to disclose to enable users of the financial statements
      to evaluate the nature and financial effects of the business
      combination.




The
effect of the adoption of ASC 805 will be dependent upon FREIT’s future
acquisition activity, if any.




·
            The
      objective of ASC 810 is to improve the relevance, comparability and
      transparency of financial information provided to investors by: (i)
      requiring entities to report non-controlling interests (minority
      interests) as equity in the consolidated financial statements and separate
      from the parent’s equity; (ii) requiring that the amount of net income
      attributable to the parent and non-controlling interest be clearly
      identified and presented on the face of the consolidated statement of
      income; and (iii) expanding the disclosure requirements with respect to
      the parent and its non-controlling interests. FREIT adopted ASC 810
      effective November 1, 2009, and as required, has retrospectively applied
      the presentation and disclosure requirements to prior periods presented in
      this Form 10-Q.




a.)
            Prior
      to the adoption of ASC 810, FREIT could not record a negative minority
      interest in its consolidated financial statements if the minority members
      had no obligation to restore their negative capital accounts. As a result,
      FREIT was accounting for the minority members’ capital deficit of its
      Westwood Hills subsidiary as a charge to income and a reduction to
      undistributed earnings. As of November 1, 2009, the amount of the minority
      members’ capital deficit that was booked as a reduction to FREIT’s
      undistributed earnings was approximately $2.3
  million.




b.)
            In
      accordance with the provisions of ASC 810, FREIT is required to disclose
      the pro forma impact on its consolidated net income and earnings per
      share, had the requirements of ASC 810 not been applied for the current
      quarter. As such, FREIT’s pro forma consolidated net income attributable
      to common equity for the six and three-month periods ended April 30, 2010
      would have been $2,425,000 ($0.35 per share basic) and $1,182,000 ($0.17
      per share basic), respectively.


Page
7
 Index







In June
2009, the FASB issued “Amendments to FASB Interpretation No. 46(R)” (ASC topic
810), which changes guidance for variable interest entities that are
insufficiently capitalized or not controlled through voting or similar rights
and requires that a variable interest entity (“VIE”) be consolidated by the
company that has both the power to direct the activities that most significantly
impact the VIE’s economic performance and the obligation to absorb losses or the
right to receive benefits that could potentially be significant to the VIE. The
new standard will be effective for fiscal years beginning after November 15,
2009. The adoption of this standard is not expected to have any impact on our
financial statements.





Note 3 -
Earnings per share:




Basic
      earnings per share is calculated by dividing net income (numerator) 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.




Since
FREIT does not have any dilutive securities, only basic earnings per share is
presented for the six and three-month periods ended April 30, 2010 and 2009.
Basic earnings per share, based on the weighted average number of shares
outstanding during each period, is comprised of ordinary income for the six and
three-month periods ended April 30, 2010 and the prior year’s comparable
period.





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. The share repurchase plan provided for the
repurchase of FREIT shares on or before March 31, 2009. Share repurchases under
this program were made from time to time in the open market or through privately
negotiated transactions. As of March 31, 2009, FREIT repurchased 50,920 shares
of common stock at a cost of $1,133,545.




On March
31, 2009, FREIT announced the adoption of a new share repurchase plan to replace
the repurchase plan that expired on March 31, 2009. The new plan complied with
Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934 and provided for
the repurchase of up to $1,000,000 in value of FREIT’s shares for the period
beginning April 14, 2009 through June 30, 2009, subject to certain price
limitations and other conditions established under the Plan. Share repurchases
under the new plan could have been made, from time to time, through privately
negotiated transactions or in the open market. The new plan could have been
terminated at any time and without prior notice. Rule 10b5-1
permits the implementation of a written plan for repurchasing shares of company
stock through a repurchasing agent 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 subsequent material,
nonpublic information it receives. UBS Financial Services, Inc. was engaged as
FREIT’s repurchasing agent, pursuant to the terms and conditions set forth in
the share repurchase plan.




The new
share repurchase plan expired on June 30, 2009. Through June 30, 2009, FREIT
repurchased a total of 51,009 shares of common stock under both repurchase plans
at a cost of $1,135,026, which is reflected in the Equity section of FREIT’s
condensed consolidated balance sheets.





Note
      5 - 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 fiscal year ended
      October 31, 2009.




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.







Page
8
 Index




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, financing costs and other non-operating activity.
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.




Real
estate rental revenue, operating expenses, NOI and recurring capital
improvements for the reportable segments are summarized below and reconciled to
condensed consolidated net income for the six and three months ended April 30,
2010 and 2009. Asset information is not reported since FREIT does not use this
measure to assess performance.




Six
      Months Ended
              
              
              Three
      Months EndedApril
      30,
              
              
              April
      30,2010
              
              
              2009
              
              
              2010
              
              
              2009(In
      Thousands of Dollars)
              
              
              (In
      Thousands of Dollars)Real
      estate rental revenue:Commercial
              
              $
              12,605
              
              
              $
              11,491
              
              
              $
              6,510
              
              
              $
              5,675Residential
              
              
              9,510
              
              
              
              9,742
              
              
              
              4,801
              
              
              
              4,851Totals
              
              
              22,115
              
              
              
              21,233
              
              
              
              11,311
              
              
              
              10,526Real
      estate operating expenses:Commercial
              
              
              5,003
              
              
              
              4,721
              
              
              
              2,629
              
              
              
              2,414Residential
              
              
              4,702
              
              
              
              4,266
              
              
              
              2,456
              
              
              
              2,232Totals
              
              
              9,705
              
              
              
              8,987
              
              
              
              5,085
              
              
              
              4,646Net
      operating income:Commercial
              
              
              7,602
              
              
              
              6,770
              
              
              
              3,881
              
              
              
              3,261Residential
              
              
              4,808
              
              
              
              5,476
              
              
              
              2,345
              
              
              
              2,619Totals
              
              $
              12,410
              
              
              $
              12,246
              
              
              $
              6,226
              
              
              $
              5,880Recurring
      capital improvements-residential
              
              $
              120
              
              
              $
              106
              
              
              $
              35
              
              
              $
              27.
              
              
              
              
              
              
              
              .Reconciliation
      to consolidated net income:Segment
      NOI
              
              $
              12,410
              
              
              $
              12,246
              
              
              $
              6,226
              
              
              $
              5,880Deferred
      rents - straight lining
              
              
              109
              
              
              
              104
              
              
              
              56
              
              
              
              53Amortization
      of acquired leases
              
              
              (15
              )
              
              
              (18
              )
              
              
              (7
              )
              
              
              (9
              )Investment
      income
              
              
              66
              
              
              
              130
              
              
              
              30
              
              
              
              51General
      and administrative expenses
              
              
              (841
              )
              
              
              (880
              )
              
              
              (413
              )
              
              
              (466
              )Depreciation
              
              
              (3,065
              )
              
              
              (2,937
              )
              
              
              (1,543
              )
              
              
              (1,463
              )Financing
      costs
              
              
              (5,781
              )
              
              
              (5,381
              )
              
              
              (2,919
              )
              
              
              (2,666
              )Net
      income
              
              
              2,883
              
              
              
              3,264
              
              
              
              1,430
              
              
              
              1,380Net
      income attributable to noncontrolling interests
              
              
              (581
              )
              
              
              (658
              )
              
              
              (300
              )
              
              
              (295
              )Net
      income attributable to common equity
              
              $
              2,302
              
              
              $
              2,606
              
              
              $
              1,130
              
              
              $
              1,085


Note 6 -
Management agreement, fees and transactions with related party:




Hekemian
& Co., Inc. (“Hekemian”) currently manages all the properties owned by
FREIT, except for The Rotunda, a mixed-use office and retail facility located in
Baltimore, Maryland, 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 $898,000 and $862,000 for the six-months
ended April 30, 2010 and 2009, respectively. For the three-month period ended
April 30, 2010 and 2009, such fees were approximately $463,000 and $436,000,
respectively. 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
$180,000 and $233,000 for the six-months ended April 30, 2010 and 2009,
respectively, and $95,000 and $86,000 for the three-months ended April 30, 2010
and 2009, respectively. The management agreement expires on October 31, 2011,
and is automatically renewed for periods of two years unless either party gives
notice of non-renewal.


Page
9
 Index




FREIT
also uses the resources of the Hekemian insurance department to secure various
insurance coverages for its properties and subsidiaries. Hekemian is paid a
commission for these services. Such commissions amounted to approximately
$64,000 and $69,000 for the six-months ended April 30, 2010 and 2009,
respectively, and $34,000 and $39,000 for the three-months ended April 30, 2010
and 2009, respectively.




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. Such fees paid to Hekemian for the six months ended
April 30, 2010 and 2009, were $1,000,000 and $0, respectively.




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.





Note 7 –
Litigation:




On August
6, 2009, a complaint was filed against Damascus Centre, LLC, a 70% owned
affiliate of FREIT, Hekemian, and others (the “Defendants”) in the Circuit Court
of Montgomery County, Maryland (the “Court”).  The plaintiffs leased
commercial office space at the Damascus Shopping Center located in Damascus,
Maryland and owned by Damascus Centre, LLC.  The complaint alleged a
number of causes of action in connection with alleged interference with
plaintiffs’ business allegedly caused by Damascus Centre, LLC’s development
activities at the Damascus Center. The complaint sought compensatory damages of
$500,000 for the alleged interference with the plaintiffs’ business and
$5,000,000 in punitive damages. In addition, the plaintiffs sought to enjoin the
demolition of the shopping center. FREIT received notice of the lawsuit on
September 2, 2009. On February 19, 2010, a voluntary stipulation of dismissal of
the complaint, with prejudice, was filed with the Court. This stipulation with
prejudice has the same effect as a final adjudication on the merits of the
complaint favorable to the Defendants, and relieves the Defendants of any
liability to the plaintiffs based on the relevant facts set forth in the
complaint. The stipulation also bars the plaintiffs from pursuing any subsequent
action based on any relevant facts in the complaint.





Note 8 –
Fair value of long-term debt:




The
following table shows the estimated fair value and carrying value
of FREIT's long-term debt at April 30, 2010 and October 31,
2009:




April
      30,
              
              
              October
      31,($
      in Millions)
              
              2010
              
              
              2009Fair
      Value
              
              $
              191.5
              
              
              $
              198.1Carrying
      Value
              
              $
              197.9
              
              
              $
              202.3






Fair
values are estimated based on market interest rates at April 30, 2010 and
October 31, 2009 and on discounted cash flow analysis. Changes in assumptions or
estimation methods may significantly affect these fair value
estimates.





Note 9 -
Subsequent events:




As a
result of a reevaluation of the future funding needs of the Damascus Center
redevelopment project in Damascus, MD, on May 6, 2010, Damascus Centre, LLC
entered into a modification of its construction loan agreement, which reduced
the amount of the construction loan facility from $27.3 million to $21.3
million. In addition, the construction completion due date was extended until
November 11, 2011. All other terms of the construction loan remain unchanged. As
of April 30, 2010, $9.9 million of this loan was drawn down to cover
construction costs.








Page
10
 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 From 10-Q, and the consolidated financial statements
including 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 statement 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 fro 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 intiatives; environmental/safety requirements; and
risks of real estate development and acquisitions. The risks with respect to the
development of real estate include: increased construction cost, 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 environment: The U. S. economy has been
showing signs of recovery from the recession, and continued economic recovery is
expected throughout 2010. However, job growth remains sluggish, and sustained
high unemployment can hinder economic growth.  While bank earnings and
liquidity are on the rebound, the potential of significant future credit losses
cloud the lending outlook. Credit availability still lags pre-recession levels
hampering business expansion and new development activities.




Residential
Properties: Occupancy and rental rates in our areas of operation are
showing signs of being on the up swing reversing a year-long downward movement.
We expect the recovery of rental rates to lag occupancy rates. The speed of
recovery at our residential properties will likely mirror job growth and reduced
unemployment in our areas of operation.




Commercial
Properties:  The retail outlook is brightening for 2010 as
consumer confidence increases and retail sales are expected to increase modestly
although consumers remain frugal with their discretionary spending. Tenant
fall-out and rent reductions are expected to abate. However, re-leasing of space
vacated during the recession will be challenging and at rates below
pre-recession levels.


Page
11
 Index




Development
Projects and Capital Expenditures:  We are concentrating only
on those capital expenditures that are absolutely necessary. We continue to
pursue the completion of the development and construction activities started at
the Damascus Center. 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, a 60% owned affiliate
of FREIT (“Grande Rotunda”), for the acquisition of the Rotunda was scheduled to
come due on July 19, 2009, and was extended by the bank until February 1, 2010.
The original loan amount of $22.5 million was reduced to $19.5 million and the
due date extended until February 1, 2013. Under the restructured terms, the
interest rate is now 350 basis points above the BBA LIBOR rate with a floor of
4%, and monthly principal payments of $10,000 are required. An additional
principal payment may be required on February 1, 2012 in an amount necessary to
reduce the loan to achieve a certain debt service coverage ratio.




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. 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 Condensed Consolidated Financial Statements included in our Annual
Report on Form 10-K for the year ended October 31, 2009, have been applied
consistently as at April 30, 2010 and October 31, 2009, and for the six and
three months ended April 30, 2010 and 2009. 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.






Page
12
 Index














Adopted
and recently issued accounting standards:




On
December 4, 2007, the FASB issued two new accounting standards, SFAS No. 141R,
“Business Combinations” (ASC 805-10), and SFAS No. 160, “Non-Controlling
Interests in Consolidated Financial Statements – an amendment of ARB No. 51”
(ASC 810-10). The standards are effective for fiscal years beginning after
December 15, 2008 and earlier adoption was prohibited.




·
            The
      objective of ASC 805 is to improve the relevance, representational
      faithfulness, and comparability of the information that a reporting entity
      provides in its financial reports about a business combination and its
      effects. To accomplish that, this Statement establishes principles and
      requirements for how the acquirer:




a.)
            Recognizes
      and measures in its financial statements the identifiable assets acquired,
      the liabilities assumed, and any non-controlling interest in the
      acquiree;




b.)
            Recognizes
      and measures the goodwill acquired in the business combination or a gain
      from a bargain purchase;




c.)
            Determines
      what information to disclose to enable users of the financial statements
      to evaluate the nature and financial effects of the business
      combination.




The
effect of the adoption of ASC 805 will be dependent upon future acquisition
activity, if any, of FREIT.




·
            The
      objective of ASC 810 is to improve the relevance, comparability and
      transparency of financial information provided to investors by: (i)
      requiring entities to report non-controlling interests (minority
      interests) as equity in the consolidated financial statements and separate
      from the parent’s equity; (ii) requiring that the amount of net income
      attributable to the parent and non-controlling interest be clearly
      identified and presented on the face of the consolidated statement of
      income; and (iii) expanding the disclosure requirements with respect to
      the parent and its non-controlling interests. The Company adopted ASC 810
      effective November 1, 2009, and as required, has retrospectively applied
      the presentation and disclosure requirements to prior periods presented in
      this 10-Q.




In June
2009, The FASB issued SFAS No. 167, “Amendments to FASB Interpretation No.
46(R)” (ASC topic 810), which changes guidance for variable interest entities
that are insufficiently capitalized or not controlled through voting or similar
rights. SFAS No.167 amends FIN 46(R) to require that a variable interest entity
(“VIE”) be consolidated by the company that has both the power to direct the
activities that most significantly impact the VIE’s economic performance and the
obligation to absorb losses or the right to receive benefits that could
potentially be significant to the VIE. The new standard will be effective for
fiscal years beginning after November 15, 2009, or January 1, 2010 for calendar
year companies. The adoption of SFAS 167 is not expected to have a material
impact on our financial statements.



















Page
13
 Index








RESULTS
OF OPERATIONS




Real
Estate revenue for the six months ended April 30, 2010 (“Current Six Months”)
increased 4.2% to $22,209,000 compared to $21,319,000 for the six months ended
April 30, 2009 (“Prior Six Months”). Real Estate revenue for the three months
ended April 30, 2010 (“Current Quarter”) increased 7.5% to $11,360,000 compared
to $10,570,000 for the three months ended April 30, 2009 (“Prior Year’s
Quarter”). The increase in real estate revenues for the Current Quarter was
attributable to FREIT’s commercial operations, primarily related to higher base
rental income, a lease termination fee amounting to approximately $250,000, and
a percentage rent payment of $123,000 relating to a tenant coming off of a
percentage rent holiday.




Net
income attributable to common equity (“Net Income”) for the Current Six Months
was $2,302,000 ($0.33 per share basic) compared to $2,606,000 ($0.38 per share
basic) for the Prior Six Months. Net Income for the Current Quarter was
$1,130,000 ($0.16 per share basic) compared to $1,085,000 ($0.16 per share
basic) for the Prior Year’s Quarter. The schedule below provides a detailed
analysis of the major changes that impacted Net Income for the six and three
months ended April 30, 2010 and 2009:




NET
      INCOME COMPONENTSSix
      Months Ended
              
              
              Three
      Months EndedApril
      30,
              
              
              April
      30,2010
              
              
              2009
              
              
              Change
              
              
              2010
              
              
              2009
              
              
              Change(thousands
      of dollars)
              
              
              (thousands
      of dollars)Income
      from real estate operations:Commercial
      properties
              
              $
              7,696
              
              
              $
              6,856
              
              
              $
              840
              
              
              $
              3,930
              
              
              $
              3,305
              
              
              $
              625Residential
      properties
              
              
              4,808
              
              
              
              5,476
              
              
              
              (668
              )
              
              
              2,345
              
              
              
              2,619
              
              
              
              (274
              )Total
      income from real estate operations
              
              
              12,504
              
              
              
              12,332
              
              
              
              172
              
              
              
              6,275
              
              
              
              5,924
              
              
              
              351Financing
      costs:Fixed
      rate mortgages
              
              
              (5,391
              )
              
              
              (5,155
              )
              
              
              (236
              )
              
              
              (2,726
              )
              
              
              (2,573
              )
              
              
              (153
              )Floating
      rate - Rotunda
              
              
              (390
              )
              
              
              (226
              )
              
              
              (164
              )
              
              
              (193
              )
              
              
              (93
              )
              
              
              (100
              )Total
      financing costs
              
              
              (5,781
              )
              
              
              (5,381
              )
              
              
              (400
              )
              
              
              (2,919
              )
              
              
              (2,666
              )
              
              
              (253
              )Investment
      income
              
              
              66
              
              
              
              130
              
              
              
              (64
              )
              
              
              30
              
              
              
              51
              
              
              
              (21
              )General
      & administrative expenses:Accounting
      fees
              
              
              (340
              )
              
              
              (257
              )
              
              
              (83
              )
              
              
              (173
              )
              
              
              (157
              )
              
              
              (16
              )Legal
      & professional fees
              
              
              (44
              )
              
              
              (82
              )
              
              
              38
              
              
              
              (27
              )
              
              
              (32
              )
              
              
              5Trustee
      fees
              
              
              (257
              )
              
              
              (264
              )
              
              
              7
              
              
              
              (127
              )
              
              
              (140
              )
              
              
              13Corporate
      expenses
              
              
              (200
              )
              
              
              (277
              )
              
              
              77
              
              
              
              (86
              )
              
              
              (137
              )
              
              
              51Total
      general & administrative expenses
              
              
              (841
              )
              
              
              (880
              )
              
              
              39
              
              
              
              (413
              )
              
              
              (466
              )
              
              
              53Depreciation:Same properties(1)
              
              
              (2,953
              )
              
              
              (2,937
              )
              
              
              (16
              )
              
              
              (1,483
              )
              
              
              (1,463
              )
              
              
              (20
              )Damascus
      center - Safeway portion of Phase II becoming operational in Sept
      2009.
              
              
              (112
              )
              
              
              -
              
              
              
              (112
              )
              
              
              (60
              )
              
              
              -
              
              
              
              (60
              )Total
      depreciation
              
              
              (3,065
              )
              
              
              (2,937
              )
              
              
              (128
              )
              
              
              (1,543
              )
              
              
              (1,463
              )
              
              
              (80
              )Net
      income
              
              $
              2,883
              
              
              $
              3,264
              
              
              $
              (381
              )
              
              $
              1,430
              
              
              $
              1,380
              
              
              $
              50Net
      income attributable to noncontrolling interests in
      subsidiaries
              
              
              (581
              )
              
              
              (658
              )
              
              
              77
              
              
              
              (300
              )
              
              
              (295
              )
              
              
              (5
              )Net
      Income attributable to common equity
              
              $
              2,302
              
              
              $
              2,606
              
              
              $
              (304
              )
              
              $
              1,130
              
              
              $
              1,085
              
              
              $
              45(1)
      Properties operated since the beginning of Fiscal 2009.


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


Page
14
 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 Six Months and Current Quarter, as compared to the prior year’s
comparable periods:




Commercial
                  
                  Residential
                  
                  CombinedSix
      Months Ended
                  
                  
                  
                  
                  
                  
                  
                  
                  Six
      Months Ended
                  
                  
                  
                  
                  
                  
                  
                  
                  Six
      Months EndedApril
      30,
                  
                  
                  Increase (Decrease)
                  
                  April
      30,
                  
                  
                  Increase (Decrease)
                  
                  
                  April
      30,2010
                  
                  
                  2009
                  
                  
                  $
                  
                  
                  %
                  
                  
                  2010
                  
                  
                  2009
                  
                  
                  $
                  
                  
                  %
                  
                  
                  2010
                  
                  
                  2009(in
      thousands)
                  
                  
                  
                  
                  (in
      thousands)
                  
                  
                  
                  
                  (in
      thousands)Rental
      income
                  
                  $
                  9,633
                  
                  
                  $
                  8,746
                  
                  
                  $
                  887
                  
                  
                  
                  10.1
                  %
                  
                  $
                  9,395
                  
                  
                  $
                  9,559
                  
                  
                  $
                  (164
                  )
                  
                  
                  -1.7
                  %
                  
                  $
                  19,028
                  
                  
                  $
                  18,305Reimbursements
                  
                  
                  2,890
                  
                  
                  
                  2,641
                  
                  
                  
                  249
                  
                  
                  
                  9.4
                  %
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  
                  
                  
                  
                  2,890
                  
                  
                  
                  2,641Other
                  
                  
                  82
                  
                  
                  
                  104
                  
                  
                  
                  (22
                  )
                  
                  
                  -21.2
                  %
                  
                  
                  115
                  
                  
                  
                  183
                  
                  
                  
                  (68
                  )
                  
                  
                  -37.2
                  %
                  
                  
                  197
                  
                  
                  
                  287Total
      revenue
                  
                  
                  12,605
                  
                  
                  
                  11,491
                  
                  
                  
                  1,114
                  
                  
                  
                  9.7
                  %
                  
                  
                  9,510
                  
                  
                  
                  9,742
                  
                  
                  
                  (232
                  )
                  
                  
                  -2.4
                  %
                  
                  
                  22,115
                  
                  
                  
                  21,233Operating
      expenses
                  
                  
                  5,003
                  
                  
                  
                  4,721
                  
                  
                  
                  282
                  
                  
                  
                  6.0
                  %
                  
                  
                  4,702
                  
                  
                  
                  4,266
                  
                  
                  
                  436
                  
                  
                  
                  10.2
                  %
                  
                  
                  9,705
                  
                  
                  
                  8,987Net
      operating income
                  
                  $
                  7,602
                  
                  
                  $
                  6,770
                  
                  
                  $
                  832
                  
                  
                  
                  12.3
                  %
                  
                  $
                  4,808
                  
                  
                  $
                  5,476
                  
                  
                  $
                  (668
                  )
                  
                  
                  -12.2
                  %
                  
                  
                  12,410
                  
                  
                  
                  12,246AverageOccupancy
      %
                  
                  
                  90.1
                  %
                  
                  
                  89.7
                  %
                  
                  
                  
                  
                  
                  
                  0.4
                  %
                  
                  
                  93.8
                  %
                  
                  
                  93.3
                  %
                  
                  
                  
                  
                  
                  
                  0.5
                  %Reconciliation
      to consolidated net income:Deferred
      rents - straight lining
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  109
                  
                  
                  
                  104Amortization
      of acquired leases
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (15
                  )
                  
                  
                  (18
                  )Investment
      income
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  66
                  
                  
                  
                  130General
      and administrative expenses
                  
                  
                  
                  
                  
                  
                  
                  (841
                  )
                  
                  
                  (880
                  )Depreciation
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (3,065
                  )
                  
                  
                  (2,937
                  )Financing
      costs
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (5,781
                  )
                  
                  
                  (5,381
                  )Net
      income
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  2,883
                  
                  
                  
                  3,264Net
      income attributable to noncontrolling interests
                  
                  
                  
                  (581
                  )
                  
                  
                  (658
                  )Net
      income attributable to common equity
                  
                  
                  $
                  2,302
                  
                  
                  $
                  2,606
  Commercial
                  
                  Residential
                  
                  CombinedThree
      Months Ended
                  
                  
                  
                  
                  
                  
                  
                  
                  Three
      Months Ended
                  
                  
                  
                  
                  
                  
                  
                  
                  Three
      Months EndedApril
      30,
                  
                  
                  Increase (Decrease)
                  
                  
                  April
      30,
                  
                  
                  Increase (Decrease)
                  
                  
                  April
      30,2010
                  
                  
                  2009
                  
                  
                  $
                  
                  
                  %
                  
                  
                  2010
                  
                  
                  2009
                  
                  
                  $
                  
                  
                  %
                  
                  
                  2010
                  
                  
                  2009(in
      thousands)
                  
                  
                  
                  
                  
                  (in
      thousands)
                  
                  
                  
                  
                  
                  (in
      thousands)Rental
      income
                  
                  $
                  4,996
                  
                  
                  $
                  4,387
                  
                  
                  $
                  609
                  
                  
                  
                  13.9
                  %
                  
                  $
                  4,743
                  
                  
                  $
                  4,769
                  
                  
                  $
                  (26
                  )
                  
                  
                  -0.5
                  %
                  
                  $
                  9,739
                  
                  
                  $
                  9,156Reimbursements
                  
                  
                  1,456
                  
                  
                  
                  1,236
                  
                  
                  
                  220
                  
                  
                  
                  17.8
                  %
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  
                  
                  
                  
                  1,456
                  
                  
                  
                  1,236Other
                  
                  
                  58
                  
                  
                  
                  52
                  
                  
                  
                  6
                  
                  
                  
                  11.5
                  %
                  
                  
                  58
                  
                  
                  
                  82
                  
                  
                  
                  (24
                  )
                  
                  
                  -29.3
                  %
                  
                  
                  116
                  
                  
                  
                  134Total
      revenue
                  
                  
                  6,510
                  
                  
                  
                  5,675
                  
                  
                  
                  835
                  
                  
                  
                  14.7
                  %
                  
                  
                  4,801
                  
                  
                  
                  4,851
                  
                  
                  
                  (50
                  )
                  
                  
                  -1.0
                  %
                  
                  
                  11,311
                  
                  
                  
                  10,526Operating
      expenses
                  
                  
                  2,629
                  
                  
                  
                  2,414
                  
                  
                  
                  215
                  
                  
                  
                  8.9
                  %
                  
                  
                  2,456
                  
                  
                  
                  2,232
                  
                  
                  
                  224
                  
                  
                  
                  10.0
                  %
                  
                  
                  5,085
                  
                  
                  
                  4,646Net
      operating income
                  
                  $
                  3,881
                  
                  
                  $
                  3,261
                  
                  
                  $
                  620
                  
                  
                  
                  19.0
                  %
                  
                  $
                  2,345
                  
                  
                  $
                  2,619
                  
                  
                  $
                  (274
                  )
                  
                  
                  -10.5
                  %
                  
                  
                  6,226
                  
                  
                  
                  5,880AverageOccupancy
      %
                  
                  
                  89.5
                  %
                  
                  
                  90.4
                  %
                  
                  
                  
                  
                  
                  
                  -0.9
                  %
                  
                  
                  94.6
                  %
                  
                  
                  92.6
                  %
                  
                  
                  
                  
                  
                  
                  2.0
                  %Reconciliation
      to consolidated net income:Deferred
      rents - straight lining
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  56
                  
                  
                  
                  53Amortization
      of acquired leases
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (7
                  )
                  
                  
                  (9
                  )Investment
      income
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  30
                  
                  
                  
                  51General
      and administrative expenses
                  
                  
                  
                  
                  
                  
                  
                  (413
                  )
                  
                  
                  (466
                  )Depreciation
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (1,543
                  )
                  
                  
                  (1,463
                  )Financing
      costs
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (2,919
                  )
                  
                  
                  (2,666
                  )Net
      income
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  1,430
                  
                  
                  
                  1,380Net
      income attributable to noncontrolling interests
                  
                  
                  
                  (300
                  )
                  
                  
                  (295
                  )Net
      income attributable to common equity
                  
                  
                  $
                  1,130
                  
                  
                  $
                  1,085


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, financing costs and other non-operating
activity. 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.





Page
15
 Index




COMMERCIAL
SEGMENT




The
commercial segment contains ten (10) separate properties during the 2010 and
2009 fiscal years. 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, from tenants who
have built and operate bank branches on the land.




As
indicated in the table above under the caption Segment Information, total
revenue and NOI from FREIT’s commercial segment for the Current Six Months
increased by 9.7% and 12.3%, respectively, over the Prior Six Months. For the
Current Quarter, total revenue and NOI increased by 14.7% and 19.0%,
respectively, over the Prior Year’s Quarter. The primary reasons for the
increase in both revenue and NOI for the Current Six Months, as well as the
Current Quarter were higher base rental income, primarily at the Damascus
Center, and a lease termination fee, which amounted to approximately $250,000,
related to a tenant at the Rotunda shopping center, and a percentage rent
payment of $123,000 relating to a tenant coming off of a percentage rent
holiday.




The
economic recovery in the U.S. has resulted in modest increases in retail sales,
although among the retailers results have been mixed. This gives us a modicum of
guarded optimism. To date, our tenant fall-out has been minor, as average
occupancy (exclusive of the Damascus Center, which is undergoing a major
redevelopment project) for the Current Six Months was at 94.6%, a decrease of
0.6% from last year’s comparable period, and decreased 1.4% for the Current
Quarter to 93.9% compared to 95.3% for the Prior Year’s Quarter. However, we may
experience additional fall-out if the economic recovery is slow.





DEVELOPMENT
ACTIVITIES




A
modernization and expansion is in progress 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. The new Safeway supermarket was
completed and the tenant opened for business in September 2009. As of April 30,
2010, construction and other costs for Phase II approximated $9.8 million. The Phase III construction is expected
to begin towards the end of this year.Total construction costs will be
funded from a $27.3 million construction loan entered into on February 12, 2008.
As a result of a reevaluation of the future funding needs for this project, on
May 6, 2010, Damascus Centre, LLC reduced the amount of the construction loan
facility to $21.3 million. 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 Center. As
of April 30, 2010, $9.9 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, which has caused occupancy to decline, on a
temporary basis, during the construction phase. However, with the completion of
the Phase I and Phase II (Safeway) construction, certain tenant leases have been
renewed and occupancy is beginning to increase.




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 the 2008 fiscal year. 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 April 30, 2010, we have expended approximately
$7.5 million for planning and feasibility studies. Due to the adverse economic
and credit conditions, the start date for the construction has not yet been
determined.





Page
16
 Index







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,
total revenue and NOI from FREIT’s residential segment for the Current Six
Months decreased by 2.4% and 12.2%, respectively, as compared to the Prior Six
Months. For the Current Quarter, total revenue and NOI decreased by 1.0% and
10.5%, respectively, over the Prior Year’s Quarter. The current year’s poorer
operating results reflect the downward movement of occupancy and rents over the
past year. The effect of lower revenues was exacerbated by losses approximating
$260,000 relative to recent storm damage costs at the Pierre Towers apartment
complex, and overall higher operating costs, particularly utility costs caused
by the colder winter this year. The revenue declines are attributable to higher
than normal unemployment in our areas of operation over the past year. However,
it should be noted that over the last several months, occupancy is showing signs
of improvement, as evidenced by average occupancy for the Current Six Months and
Current Quarter increasing by 0.5% and 2.0%, respectively, over last year’s
comparable periods.




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 Six Months and the
Prior Six Months were $1,530 and $1,557, 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 $197,000 and $187,000,
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 have substantially completed modernizing, where
required, all apartments and some of the buildings’ mechanical services. This
renovation is expected to cost approximately $4 - $6 million, and apartments
were renovated as they became temporarily vacant.  It is anticipated
that this renovation will be completed within the next 12 months. These costs
are being financed from operating cash flow and cash reserves. Through April 30,
2010, we expended approximately $4.0 million in capital improvements at The
Pierre.





INVESTMENT
INCOME




Investment
income for the Current Six Months and Current Quarter decreased 49.2% and 41.2%
to $66,000 and $30,000, respectively, as compared to the prior year’s comparable
periods. 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 employees of Hekemian, 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 and Damascus Centre, LLC). The decrease in
investment income was primarily attributable to lower interest income on FREIT’s
investments in cash and cash equivalents, and lower 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, due in part to lower interest
rates.

























Page
17
 Index







FINANCING
COSTS




Six
      Months Ended
              
              
              Three
      Months EndedApril
      30,
              
              
              April
      30,2010
              
              
              2009
              
              
              2010
              
              
              2009($
      in thousands)
              
              
              ($
      in thousands)Fixed
      rate mortgages:1st
      MortgagesExisting
              
              $
              4,250
              
              
              $
              4,477
              
              
              $
              2,116
              
              
              $
              2,230New
      (1)
              
              
              607
              
              
              
              182
              
              
              
              303
              
              
              
              912nd
      MortgagesExisting
              
              
              169
              
              
              
              252
              
              
              
              84
              
              
              
              126Variable
      rate mortgages:Acquisition
      loan-Rotunda
              
              
              390
              
              
              
              294
              
              
              
              193
              
              
              
              119Construction
      loan-Damascus
              
              
              79
              
              
              
              73
              
              
              
              39
              
              
              
              25Other
              
              
              180
              
              
              
              145
              
              
              
              91
              
              
              
              735,675
              
              
              
              5,423
              
              
              
              2,826
              
              
              
              2,664Amortization
      of Mortgage Costs
              
              
              106
              
              
              
              118
              
              
              
              53
              
              
              
              59Total
      Financing Costs
              
              
              5,781
              
              
              
              5,541
              
              
              
              2,879
              
              
              
              2,723Less
      amount capitalized
              
              
              -
              
              
              
              (160
              )
              
              
              40
              
              
              
              (57
              )Financing
      costs expensed
              
              $
              5,781
              
              
              $
              5,381
              
              
              $
              2,919
              
              
              $
              2,666(1)
      Mortgages not in place at beginning of Fiscal 2009.


Total
financing costs, before capitalized amounts, for the Current Six Months and
Current Quarter increased 4.3% and 5.7%, respectively, compared to the prior
year’s comparable periods.




Our
acquisition loan for The Rotunda property of $22.5 million, which was reduced to
$19.5 million on February 1, 2010, bears a floating interest rate. An increase
in interest rates over the course of the Current Six Months increased the level
of interest expense for The Rotunda by approximately $96,000 and $74,000, to
$390,000 and $193,000 for the Current Six Months and Current Quarter,
respectively.





GENERAL
AND ADMINISTRATIVE EXPENSES (“G & A”)




G&A
expense for the Current Six Months and Current Quarter was $841,000 and
$413,000, respectively, as compared to $880,000 and $466,000 for the prior
year’s comparable periods. The primary components of G&A are accounting
fees, legal & professional fees and Trustees’ fees amounting in the
aggregate to $641,000 and $327,000, for the Current Six Months and the Current
Quarter, respectively, as compared to $603,000 and $329,000 for the prior year’s
periods.





DEPRECIATION




Depreciation
expense from operations for the Current Six Months and Current Quarter was
$3,065,000 and $1,543,000, respectively, as compared to $2,937,000 and
$1,463,000 for the prior year’s comparable periods.  The increase was
primarily attributable to the current construction project at the Damascus
Center becoming operational.




LIQUIDITY
AND CAPITAL RESOURCES




Our
financial condition remains strong. Net cash provided by operating activities
was $7.2 million for the Current Six Months compared to $7.1 million for the
Prior Six Months. We expect that cash provided by operating activities will be
adequate to cover mandatory debt service payments, recurring capital
improvements and dividends necessary to retain qualification as a REIT (90% of
taxable income).




As at
April 30, 2010, FREIT had cash and cash equivalents totaling $6.2 million,
compared to $11.3 million at October 31, 2009.












Page
18
 Index




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 2012, but can be
cancelled by the bank, at its will, within 60 days before or after each
anniversary date. The credit line will automatically be extended at the
termination date of the current term and each subsequent term for an additional
period of 24 months, provided there is no default and the credit line has not
been cancelled. 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. The interest rate on the line of credit has a floor of
4%.




As of
April 30, 2010, approximately $18 million was available under the line of
credit.




We are in
the process of rebuilding the Damascus Center. The total capital required for
this project is estimated at $21.9 million. On February 12, 2008, Damascus
Centre, LLC closed on a $27.3 million construction loan that is available to
fund already expended and future construction costs. This loan has a term of
forty-eight (48) months, with one twelve (12) month extension option. FREIT has
guaranteed 30% of the loan, and the minority interests, who have a 30%
investment in Damascus Centre, LLC, have agreed to indemnify FREIT for their
share of the guarantee. Draws against this loan bear interest at the BBA LIBOR
daily floating rate plus 135 basis points. As of April 30, 2010, Damascus
Centre, LLC drew down $9.9 million of this loan to cover construction costs. We
expect this development project to add to revenues, income, cash flow, and
shareholder value. As a result of a reevaluation of the future funding needs for
this project, on May 6, 2010, Damascus Centre, LLC reduced the amount of the
construction loan facility to $21.3 million.




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 expansion
will be, for the most part, from mortgage financing. During the 2008 fiscal
year, we substantially completed the planning and feasibility studies and
expended approximately $7.5 million during this phase, which adds to the value
of the property. Due to the adverse economic and credit conditions, no date for
the commencement of construction has been determined.




At April
30, 2010, FREIT’s aggregate outstanding mortgage debt was $197.9 million and
bears a weighted average interest rate of 5.3%, and an average life of
approximately 5.2 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
              2012
              2013
              2014
              2016
              2017
              2018
              2019
              2022($
      in millions)Mortgage
      "Balloon" Payments
              $9.9
              $27.5
              $25.9
              $24.5
              $22.0
              $5.0
              $45.0
              $14.4


The
following table shows the estimated fair value and carrying value of our
long-term debt at April 30, 2010 and October 31, 2009:




April
      30,
              
              
              October
      31,($
      in Millions)
              
              2010
              
              
              2009Fair
      Value
              
              $
              191.5
              
              
              $
              198.1Carrying
      Value
              
              $
              197.9
              
              
              $
              202.3





Fair
values are estimated based on market interest rates at April 30, 2010 and
October 31, 2009 and on discounted cash flow analysis. Changes in assumptions or
estimation methods may significantly affect these fair value
estimates.




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 April 30, 2010, a 1% interest rate increase would reduce the
fair value of our debt by $8.4 million, and a 1% decrease would increase the
fair value by $9.0 million.


Page
19
 Index




The $22.5
million mortgage loan entered into by Grande Rotunda, LLC for the acquisition of
the Rotunda was scheduled to come due on July 19, 2009, and was extended by the
bank until February 1, 2010. On February 1, 2010, the original loan amount of
$22.5 million was reduced to $19.5 million and the due date extended until
February 1, 2013. Under the restructured terms, the interest rate is now 350
basis points above the BBA LIBOR rate with a floor of 4%, and monthly principal
payments of $10,000 are required. An additional principal payment may be
required on February 1, 2012 in an amount necessary to reduce the loan to
achieve a certain debt service coverage ratio.




FREIT
also has interest rate exposure on its floating rate loans. Currently, FREIT has
$29.4 million in floating rate loans outstanding, of which $19.5 million relates
to the acquisition loan for The Rotunda and $9.9 million relates to the
construction loan for the Damascus Center redevelopment project. A 1% rate
fluctuation would impact FREIT’s annual interest cost by approximately
$294,000.




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”):








Six
      Months Ended
              
              
              Three
      Months EndedApril
      30,
              
              
              April
      30,2010
              
              
              2009
              
              
              2010
              
              
              2009($
      in thousands)
              
              
              ($
      in thousands)Net
      income
              
              
              $
              2,883
              
              
              $
              3,264
              
              
              $
              1,430
              
              
              $
              1,380Depreciation
              
              
              
              3,065
              
              
              
              2,937
              
              
              
              1,543
              
              
              
              1,463Amortization
      of deferred mortgage costs
              
              
              106
              
              
              
              118
              
              
              
              53
              
              
              
              59Deferred
      rents (Straight lining)
              
              
              (109
              )
              
              
              (104
              )
              
              
              (56
              )
              
              
              (53
              )Amortization
      of acquired leases
              
              
              15
              
              
              
              18
              
              
              
              7
              
              
              
              9Capital
      Improvements - Apartments
              
              
              (120
              )
              
              
              (106
              )
              
              
              (35
              )
              
              
              (27
              )Distributions
      to noncontrolling interests
              
              
              (692
              )
              
              
              (563
              )
              
              
              (344
              )
              
              
              (443
              )FFO
              
              $
              5,148
              
              
              $
              5,564
              
              
              $
              2,598
              
              
              $
              2,388Per
      Share - Basic
              
              $
              0.74
              
              
              $
              0.80
              
              
              $
              0.37
              
              
              $
              0.34Weighted
      Average Shares Outstanding
              
              
              6,942
              
              
              
              6,945
              
              
              
              6,942
              
              
              
              6,942


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
20
 Index











Item
3: Quantitative and Qualitative Disclosures About Market
Risk




See
“Commercial Segment”, “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 three months ended
April 30, 2010 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
1:  Legal Proceedings




On August
6, 2009, a complaint was filed against Damascus Centre, LLC, Hekemian (FREIT’s
managing agent), and others (the “Defendants”) in the Circuit Court of
Montgomery County, Maryland (the “Court”).  The plaintiffs leased
commercial office space at the Damascus Center.  The complaint alleged
a number of causes of action in connection with alleged interference with
plaintiffs’ business allegedly caused by Damascus Centre, LLC’s development
activities at the Damascus Center. The complaint sought compensatory damages of
$500,000 for the alleged interference with the plaintiffs’ business and
$5,000,000 in punitive damages. In addition, the plaintiffs sought to enjoin the
demolition of the shopping center. FREIT received notice of the lawsuit on
September 2, 2009. On February 19, 2010, a voluntary stipulation of dismissal of
the complaint, with prejudice, was filed with the Court. This stipulation with
prejudice has the same effect as a final adjudication on the merits of the
complaint favorable to the Defendants, and relieves the Defendants of any
liability to the plaintiffs based on the relevant facts set forth in the
complaint. The stipulation also bars the plaintiffs from pursuing any subsequent
action based on any relevant facts in the complaint.





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, 2009, that
was filed with the Securities and Exchange Commission on January 14,
2010.





Item
6: Exhibits


Exhibit
Index







Exhibit
10.1 - Agency Agreement dated November 10, 2009 between Grande Rotunda, LLC and
Hekemian Resources Development, LLC.




Exhibit
31.1 - Section 302 Certification of Chief Executive Officer




Exhibit
31.2 - Section 302 Certification of Chief Financial Officer




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




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







Page
21
 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:
      June 9, 2010/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 22