FirstRealEstateInvestmentTrustofNewJerseyInc_OTC_FREVS_2016.pdf

1、FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEYAnnual Report 2016Dear Fellow Shareholders,FREIT shares produced a total return of 12.6%during the 2016 fiscal year.Approximately one-half of this return came from dividends and one-half from share price appreciation.As anticipated,2016 was a challengi

2、ng year for the reported results.Adjusted Funds from Operations in 2016 decreased to$8,446,000($1.25 per share)from$10,381,000($1.53 per share)in 2015.As we noted a year ago,the Trust faced two headwinds.The first was at our single tenanted Patchogue property,where the A&P bankruptcy resulted in the

3、 rejection of our tenants lease.The second was at our Rochelle Park property,where our bank tenant completed a merger and exercised a favorable purchase option.While expected,it is nonetheless disappointing to experience the reduction in revenue,earnings and cash flow from these properties,all of wh

4、ich carries over to 2017.Excluding Patchogue,Rochelle Park,and the Rotunda(which was recently placed into service),the balance of our portfolio,in the aggregate,experienced continued improvement in net operating income(NOI)in 2016.The Rotunda DevelopmentThe Rotunda opened in the third quarter of 201

5、6,and the feedback from the residents,tenants,local government and community has been nothing short of outstanding.If you have not done so already,we encourage shareholders to visit the property or the Rotundas website at .As of this writing,we are 40%leased in the apartments and 71%leased in the gr

6、ound level retail.As is often the case with a development project,the Rotunda is a drag on our earnings and cash flow during the rent up period.This results from recognizing the full operating expenses ofthe property while incurring substantial capital expenditure for tenant improvements and leasing