Investment in Tenancy-in-Common

12 Months Ended

Oct. 31, 2025

Investment in Tenancy-in-Common [Abstract]

Investment in tenancy-in-common

Note 3 – Investment in tenancy-in-common:

Pursuant to the TIC agreement, FREIT has a 65% undivided interest in the Pierre Towers property. Based on the guidance of ASC 810, “Consolidation”, FREIT’s investment in the TIC is accounted for under the equity method of accounting.

FREIT’s investment in the TIC was approximately $16.9 million and $17.5 million at October 31, 2025 and 2024, respectively. For the fiscal years ended October 31, 2025, 2024 and 2023, FREIT recognized a loss on investment in TIC of approximately $135,000, $170,000 and $271,000, respectively, in the accompanying consolidated statements of income. Additionally, because the Pierre Towers property was part of the original portfolio sale to Sinatra Properties, LLC (“Sinatra”), approximately $166,000 in expenses were reimbursed to FREIT in the fiscal year ended October 31, 2024 in connection with the terminated Sinatra transaction (See Note 14).

Hekemian & Co., Inc. (“Hekemian & Co.”) manages the Pierre Towers property pursuant to a management agreement between the owners of the TIC and Hekemian & Co. dated as of February 28, 2020, which renews for successive one (1) year terms unless either party gives written notice of termination to the other party at least sixty (60) days prior to the end of the then-current term. The management agreement was renewed for a one (1) year term expiring on February 28, 2027.

The management agreement requires the payment of management fees equal to 5% of rents collected. Management fees, charged to operations, were approximately $446,000, $425,000 and $418,000 for the fiscal years ended October 31, 2025, 2024 and 2023, respectively. Hekemian & Co. management fees outstanding at October 31, 2025 and 2024 were approximately $49,600 and $35,700, respectively. The Pierre Towers property also uses the resources of the Hekemian & Co. insurance department to secure various insurance coverages for its property. Hekemian & Co. is paid a commission for these services. Such commissions were charged to operations and amounted to approximately $67,000, $55,000 and $51,000 for the fiscal years ended October 31, 2025, 2024 and 2023, respectively.

The following table summarizes the balance sheets of the Pierre Towers property as of October 31, 2025 and 2024, accounted for by the equity method:

	October 31,		October 31,
	2025		2024
	(In Thousands of Dollars)
Real estate, net	$	71,928	$	72,707
Cash and cash equivalents		335		1,442
Tenants' security accounts		563		528
Receivables and other assets		575		556
Total assets	$	73,401	$	75,233
Mortgages payable, net of unamortized debt issuance costs	$	46,173	$	47,362
Accounts payable and accrued expenses		480		229
Tenants' security deposits		562		529
Deferred revenue		152		172
Equity		26,034		26,941
Total liabilities & equity	$	73,401	$	75,233
FREIT's investment in TIC (65% interest)	$	16,922	$	17,512

The following table summarizes the statements of operations of the Pierre Towers property for the fiscal years ended October 31, 2025, 2024 and 2023, accounted for by the equity method:

	Years Ended October 31,
	2025			2024			2023
	(In Thousands of Dollars)
Revenue	$	8,669		$	8,591		$	8,278
Operating expenses		(5,141	)		(4,977	)		(4,893	)
Depreciation		(2,270	)		(2,235	)		(2,212	)
Operating income		1,258			1,379			1,173
Interest income		56			82			—
Sinatra expenses due to FREIT		—			(166	)		—
Interest expense including amortization of deferred financing costs		(1,521	)		(1,556	)		(1,590	)
Net loss	$	(207	)	$	(261	)	$	(417	)
FREIT's loss on investment in TIC (65% interest)	$	(135	)	$	(170	)	$	(271	)