Item 9.01 Financial Statements and Exhibits
(b) Pro Forma Financial
Information.
The following unaudited
pro forma condensed consolidated financial statements are based on FREIT’s historical consolidated financial statements and the
historical financial statements of the Rotunda Property, the Damascus Property and the Westridge Square Property as adjusted to give effect
to the sale of the Rotunda Property on December 30, 2021 and the anticipated sales of the Damascus Property and the Westridge Square Property.
The unaudited pro forma condensed consolidated statements of operations for the nine months ended July 31, 2021 and the year ended October
31, 2020 give effect to the consummated sale of the Rotunda Property and the anticipated sales of the Damascus Property and the Westridge
Square Property as if each had occurred on November 1, 2019. The unaudited pro forma condensed consolidated balance sheet as of July 31,
2021 gives effect to the consummated sale of the Rotunda Property and the anticipated sales of the Damascus Property and the Westridge
Square Property as if each had occurred on that day.
The transaction accounting
adjustments consist of those necessary to account for each of these dispositions. These pro forma condensed consolidated financial statements
do not contemplate any required dividend to maintain the status of a real estate investment trust as a result of these sales.
FIRST REAL ESTATE INVESTMENT
TRUST OF NEW JERSEY, INC. AND SUBSIDIARIES
Unaudited Pro Forma
Condensed Consolidated Balance Sheet
As of July 31, 2021
(in Thousands)
|
|
|
|
|
|
|
|
WestFREIT, Corp. &
|
|
|
|
|
|
|
|
|
Grande Rotunda, LLC
|
|
|
|
Damascus Centre, LLC
|
|
|
|
|
|
|
Registrant
|
|
Transaction accounting
|
|
|
|
Transaction accounting
|
|
|
|
|
|
|
historical
|
|
adjustments
|
|
Notes
|
|
adjustments
|
|
Notes
|
|
Pro forma
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate, at cost, net of accumulated depreciation, including construction in progress
|
|
$
|
273,004
|
|
|
$
|
(137,407
|
)
|
|
(a)
|
|
$
|
(36,718
|
)
|
|
(h)
|
|
$
|
98,879
|
|
Cash and cash equivalents
|
|
|
36,359
|
|
|
|
68,687
|
|
|
(b)
|
|
|
16,312
|
|
|
(i)
|
|
|
121,358
|
|
Investment in tenancy-in-common
|
|
|
19,433
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
19,433
|
|
Funds held in post closing escrow
|
|
|
—
|
|
|
|
8,205
|
|
|
(e)
|
|
|
1,132
|
|
|
(j)
|
|
|
9,337
|
|
Receivables, prepaid expenses and other assets
|
|
|
14,082
|
|
|
|
(6,304
|
)
|
|
(a)
|
|
|
(3,210
|
)
|
|
(h)
|
|
|
4,568
|
|
Secured loans receivable (related party)
|
|
|
5,268
|
|
|
|
(5,268
|
)
|
|
(c)
|
|
|
—
|
|
|
|
|
|
—
|
|
Total Assets
|
|
$
|
348,146
|
|
|
$
|
(72,087
|
)
|
|
|
|
$
|
(22,484
|
)
|
|
|
|
$
|
253,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgages payable, net
|
|
$
|
301,162
|
|
|
$
|
(116,814
|
)
|
|
(a)
|
|
$
|
(39,568
|
)
|
|
(h)
|
|
$
|
144,780
|
|
Due to affiliate
|
|
|
3,229
|
|
|
|
(3,229
|
)
|
|
(d)
|
|
|
—
|
|
|
|
|
|
—
|
|
Accounts payable, accrued expenses and other liabilities
|
|
|
12,039
|
|
|
|
(1,035
|
)
|
|
(a)
|
|
|
(618
|
)
|
|
(h)
|
|
|
10,386
|
|
Total Liabilities
|
|
|
316,430
|
|
|
|
(121,078
|
)
|
|
|
|
|
(40,186
|
)
|
|
|
|
|
155,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
71
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
71
|
|
Additional paid-in-capital
|
|
|
25,417
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
25,417
|
|
Retained earnings
|
|
|
13,516
|
|
|
|
28,011
|
|
|
(f)
|
|
|
14,275
|
|
|
(k)
|
|
|
55,802
|
|
Accumulated other comprehensive loss
|
|
|
(2,885
|
)
|
|
|
—
|
|
|
|
|
|
391
|
|
|
(h)
|
|
|
(2,494
|
)
|
Total Common Equity
|
|
|
36,119
|
|
|
|
28,011
|
|
|
|
|
|
14,666
|
|
|
|
|
|
78,796
|
|
Noncontrolling interests in subsidiaries
|
|
|
(4,403
|
)
|
|
|
20,980
|
|
|
(g)
|
|
|
3,036
|
|
|
(l)
|
|
|
19,613
|
|
Total Equity
|
|
|
31,716
|
|
|
|
48,991
|
|
|
|
|
|
17,702
|
|
|
|
|
|
98,409
|
|
Total Liabilities and Equity
|
|
$
|
348,146
|
|
|
$
|
(72,087
|
)
|
|
|
|
$
|
(22,484
|
)
|
|
|
|
$
|
253,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Unaudited Pro Forma Condensed
Consolidated Balance Sheet
(a) This adjustment reflects the elimination
of assets and liabilities attributable to the sale of the Rotunda Property.
(b) This adjustment reflects consideration received
from the sale of the Rotunda Property, the repayment of loans (including interest) and secured loans receivable to FREIT.
(c) This adjustment reflects the receipt of
loan repayments from certain members of Rotunda 100, LLC from their respective proceeds of the sale of the Rotunda Property.
(d) This adjustment reflects the repayment of
a loan (including interest) due to Rotunda 100, LLC (40% partnership interest in Grande Rotunda, LLC) from the proceeds received from
the sale of the Rotunda Property.
(e) This adjustment reflects proceeds anticipated
to be released from funds held in a post closing escrow totalling approximately $14 million for rents and unpaid economic obligations
of the Sellers under certain leases related to tenants whose rent commencement dates have not begun.
(f) This adjustment reflects FREIT's share of
the $52 million gain on the sale of the Rotunda Property, inclusive of approximately $8.2 million of proceeds anticipated to be released
from funds held in a post closing escrow for rents and unpaid economic obligations of the Sellers under certain leases related
to tenants whose rent commencement dates have not begun.
(g) This adjustment reflects the minority interest
share of the gain on sale of the Rotunda Property.
(h) This adjustment reflects the elimination
of assets and liabilities attributable to the Damascus Property and the Westridge Square property.
(i) This adjustment reflects the anticipated
cash consideration received from the sale of the Damascus Property and the Westridge Square property.
(j) This adjustment reflects proceeds anticipated
to be released from funds held in a post closing escrow of approximately $1.5 million for rents and unpaid economic obligations of the
Sellers under certain leases related to tenants whose rent commencement dates have not begun.
(k) This adjustment reflects FREIT's share of
the $18.8 million gain on the sale of the Damascus Property and the Westridge Square Property, inclusive of approximately $1.1 million
of proceeds anticipated to be released from funds held in a post closing escrow for rents and unpaid economic obligations of
the Sellers under certain leases related to tenants whose rent commencement dates have not begun.
(l) This adjustment reflects the minority interest
share of the gain on sale of the Damascus Property.
FIRST REAL ESTATE
INVESTMENT TRUST OF NEW JERSEY, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed
Consolidated Statement of Operations
For the nine months
ended July 31, 2021
(In Thousands, Except
Per Share Amounts)
|
|
|
|
Grande Rotunda, LLC
|
|
|
|
WestFREIT, Corp. &
|
|
|
|
|
|
|
|
|
Transaction
|
|
|
|
Damascus Centre, LLC
|
|
|
|
|
|
|
Registrant
|
|
accounting
|
|
|
|
Transaction accounting
|
|
|
|
|
|
|
historical
|
|
adjustments
|
|
Notes
|
|
adjustments
|
|
Notes
|
|
Pro forma
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
38,100
|
|
|
$
|
(12,842
|
)
|
|
(a)
|
|
$
|
(5,396
|
)
|
|
(f)
|
|
$
|
19,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
13,078
|
|
|
|
(3,411
|
)
|
|
(b)
|
|
|
(979
|
)
|
|
(g)
|
|
|
8,688
|
|
Real estate taxes
|
|
|
6,018
|
|
|
|
(1,011
|
)
|
|
(b)
|
|
|
(677
|
)
|
|
(g)
|
|
|
4,330
|
|
Other property expenses
|
|
|
8,573
|
|
|
|
(3,935
|
)
|
|
(b)
|
|
|
(1,509
|
)
|
|
(g)
|
|
|
3,129
|
|
Total expenses
|
|
|
27,669
|
|
|
|
(8,357
|
)
|
|
|
|
|
(3,165
|
)
|
|
|
|
|
16,147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
10,431
|
|
|
|
(4,485
|
)
|
|
|
|
|
(2,231
|
)
|
|
|
|
|
3,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
|
|
|
(157
|
)
|
|
|
(74
|
)
|
|
(c)
|
|
|
—
|
|
|
|
|
|
(231
|
)
|
Interest expense including amortization of deferred financing costs
|
|
|
(9,242
|
)
|
|
|
3,148
|
|
|
(d)
|
|
|
1,077
|
|
|
(h)
|
|
|
(5,017
|
)
|
Net income (loss)
|
|
|
1,032
|
|
|
|
(1,411
|
)
|
|
|
|
|
(1,154
|
)
|
|
|
|
|
(1,533
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (income) loss attributable to noncontrolling
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
interests in subsidiaries
|
|
|
(256
|
)
|
|
|
273
|
|
|
(e)
|
|
|
80
|
|
|
(i)
|
|
|
97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common
equity
|
|
$
|
776
|
|
|
$
|
(1,138
|
)
|
|
|
|
$
|
(1,074
|
)
|
|
|
|
$
|
(1,436
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share - basic and diluted
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
7,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,016
|
|
Diluted
|
|
|
7,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Unaudited
Pro Forma Condensed Consolidated Statement of Operations
(a) This adjustment reflects the elimination
of revenues of the Rotunda Property.
(b) This adjustment reflects the elimination
of expenses of the Rotunda Property.
(c) This adjustment reflects the elimination
of interest income earned on secured loans receivable to FREIT from certain members of Rotunda 100, LLC.
(d) This adjustment reflects the elimination
of interest expense of the Rotunda Property.
(e) This adjustment reflects the adjustment to
the minority interest share of the Rotunda Property.
(f) This adjustment reflects the elimination
of revenues of the Damascus Property and the Westridge Square property.
(g) This adjustment reflects the elimination
of expenses of the Damascus Property and the Westridge Square property.
(h) This adjustment reflects the elimination
of interest expense of the Damascus Property and the Westridge Square property.
(i) This adjustment reflects the adjustment to
the minority interest share of the Damascus Property.
FIRST REAL ESTATE
INVESTMENT TRUST OF NEW JERSEY, INC. AND SUBSIDIARIES
Unaudited Pro Forma
Condensed Consolidated Statement of Income
For the year ended October
31, 2020
(In Thousands, Except
Per Share Amounts)
|
|
|
|
|
|
|
|
WestFREIT, Corp. &
|
|
|
|
|
|
|
|
|
Grande Rotunda, LLC
|
|
|
|
Damascus Centre, LLC
|
|
|
|
|
|
|
Registrant
|
|
Transaction Accounting
|
|
|
|
Transaction Accounting
|
|
|
|
|
|
|
historical
|
|
Adjustments
|
|
Notes
|
|
Adjustments
|
|
Notes
|
|
Pro Forma
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
52,727
|
|
|
$
|
(16,503
|
)
|
|
(a)
|
|
$
|
(7,386
|
)
|
|
(g)
|
|
$
|
28,838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
15,805
|
|
|
|
(4,773
|
)
|
|
(b)
|
|
|
(1,118
|
)
|
|
(h)
|
|
|
9,914
|
|
Real estate taxes
|
|
|
8,687
|
|
|
|
(1,550
|
)
|
|
(b)
|
|
|
(864
|
)
|
|
(h)
|
|
|
6,273
|
|
Other property expenses
|
|
|
24,475
|
|
|
|
(12,929
|
)
|
|
(b)
|
|
|
(1,998
|
)
|
|
(h)
|
|
|
9,548
|
|
Total expenses
|
|
|
48,967
|
|
|
|
(19,252
|
)
|
|
|
|
|
(3,980
|
)
|
|
|
|
|
25,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
3,760
|
|
|
|
2,749
|
|
|
|
|
|
(3,406
|
)
|
|
|
|
|
3,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses
|
|
|
2
|
|
|
|
(131
|
)
|
|
(c)
|
|
|
—
|
|
|
|
|
|
(129
|
)
|
Gain on sale of property
|
|
|
—
|
|
|
|
51,957
|
|
|
(d)
|
|
|
18,778
|
|
|
(i)
|
|
|
70,735
|
|
Gain on deconsolidation of subsidiary
|
|
|
27,680
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
27,680
|
|
Interest expense including amortization of deferred financing costs
|
|
|
(14,122
|
)
|
|
|
5,345
|
|
|
(e)
|
|
|
1,573
|
|
|
(j)
|
|
|
(7,204
|
)
|
Net income
|
|
|
17,320
|
|
|
|
59,920
|
|
|
|
|
|
16,945
|
|
|
|
|
|
94,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss (income) attributable to noncontrolling
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
interests in subsidiaries
|
|
|
3,233
|
|
|
|
(24,668
|
)
|
|
(f)
|
|
|
(2,812
|
)
|
|
(k)
|
|
|
(24,247
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common equity
|
|
$
|
20,553
|
|
|
$
|
35,252
|
|
|
|
|
$
|
14,133
|
|
|
|
|
$
|
69,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic and diluted
|
|
$
|
2.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
10.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
6,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,992
|
|
Diluted
|
|
|
6,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes to Unaudited
Pro Forma Condensed Consolidated Statement of Income
(a) This adjustment reflects the elimination
of revenues of the Rotunda Property.
(b) This adjustment reflects the elimination
of expenses of the Rotunda Property.
(c) This adjustment reflects the elimination
of interest income earned on secured loans receivable to FREIT from certain members of Rotunda 100, LLC.
(d) This adjustment reflects the gain on sale
of the Rotunda Property on December 30, 2021. Included in this gain is approximately $8.2 million of proceeds anticipated
to be released from funds held in a post closing escrow for rents and unpaid economic obligations of the Sellers under certain
leases related to tenants whose rent commencement dates have not begun.
(e) This adjustment reflects the elimination
of interest expense of the Rotunda Property.
(f) This adjustment reflects the minority interest
share of the sale of the Rotunda Property.
(g) This adjustment reflects the elimination
of revenues of the Damascus Property and the Westridge Square property.
(h) This adjustment reflects the elimination
of expenses of the Damascus Property and the Westridge Square property.
(i) This adjustment reflects the anticipated
gain on sale of the Damascus Property and the Westridge Square property. Included in this gain is approximately $1.1
million of proceeds anticipated to be released from funds held in a post closing escrow for rents and unpaid economic obligations
of the Sellers under certain leases related to tenants whose rent commencement dates have not begun.
(j) This adjustment reflects the elimination
of interest expense of the Damascus Property and the Westridge Square property.
(k) This adjustment reflects the minority interest
share of the anticipated sale of the Damascus Property and the Westridge Square property.
Forward-Looking
and Cautionary Statements
This current report on
Form 8-K may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal
securities laws. These forward-looking statements can be identified by the use of words such as “expect,” “plan,”
“will,” “estimate,” “project,” “intend,” “believe,” “guidance,”
“approximately,” “anticipate,” “may,” “should,” “seek” or the negative of
these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate
to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions of management.
These forward-looking statements are subject to known and unknown risks and uncertainties that you should not rely on as predictions of
future events. Forward-looking statements depend on assumptions, data and/or methods which may be incorrect or imprecise and we may not
be able to realize them. The following risks and uncertainties, among others, could cause actual results to differ materially from those
currently anticipated due to a number of factors, which include, but are not limited to: industry and economic conditions; FREIT’s
ability to satisfy the conditions to closing and complete the proposed transaction; FREIT’s dependence upon its external manager
to conduct its business and achieve its investment objectives; unknown liabilities acquired in connection with acquired properties or
interests in real estate-related entities; general risks affecting the real estate industry and local real estate markets (including,
without limitation, the market value of FREIT’s properties, potential illiquidity of FREIT’s remaining real estate investments,
condemnations, and potential damage from natural disasters); the financial performance of FREIT’s tenants; the impact of any financial,
accounting, legal or regulatory issues or litigation that may affect the Trust and its major tenants; volatility and uncertainty in the
financial markets, including potential fluctuations in the consumer price index; risks associated with FREIT’s failure to maintain
status as a REIT under the Internal Revenue Code of 1986, as amended; and other additional risks discussed in FREIT’s annual report
on Form 10-K for the fiscal year ended October 31, 2020. FREIT expressly disclaims any responsibility to update or revise forward-looking
statements, whether as a result of new information, future events or otherwise, except as required by law.