Table of Contents
Net Income Decreased in Q2 2023
First Real Estate Investment Trust Of New Jersey (FREIT) has reported a decrease in net income for the second quarter of 2023 compared to the same period last year. According to their quarterly report, the company’s net income for Q2 2023 was $97,000, a decrease of $449,000 from the prior year’s net income of $45,425,000.
Detailed Analysis of Net Income Changes
The report provides a detailed analysis of the major changes that affected FREIT’s net income. In terms of income from real estate operations, there was a decrease in net income from commercial properties, with a decrease of $512,000 for the six months ended April 30, 2023, and an increase of $135,000 for the three months ended April 30, 2023. Similarly, there was a decrease in net income from residential properties, with a decrease of $1,076,000 for the six months ended April 30, 2023, and an increase of $8,000 for the three months ended April 30, 2023.
Decrease in Financing Costs
On the other hand, financing costs decreased by $628,000 for the six months ended April 30, 2023, and by $424,000 for the three months ended April 30, 2023. This decrease was primarily attributed to a decrease in fixed-rate mortgages and interest rate swap contracts breakage fee.
Increase in Investment Income
Furthermore, the report reveals that investment income increased by $343,000 for the six months ended April 30, 2023, and by $180,000 for the three months ended April 30, 2023. This increase was a result of higher interest rates during these periods.
General and Administrative Expenses
In terms of general and administrative expenses, there was a decrease of $394,000 for the six months ended April 30, 2023, and a decrease of $106,000 for the three months ended April 30, 2023. This decrease was primarily driven by a decline in legal costs and an increase in director fees.
Depreciation and Loss on Investment
Depreciation decreased by $1,080,000 for the six months ended April 30, 2023, and by $18,000 for the three months ended April 30, 2023. Additionally, there was a decrease in the loss on investment in tenancy-in-common by $32,000 for the six months ended April 30, 2023, and by $89,000 for the three months ended April 30, 2023.
Overall Decrease in Net Income
Overall, the decrease in net income for the second quarter of 2023 compared to the same period last year was mainly driven by increases in financing costs and total operating expenses at residential properties. However, there were also increases in investment income and revenue, excluding the properties that were sold in the prior year.
It is important to note that the condensed consolidated results of operations for the current six months and current quarter may not necessarily be indicative of the results to be expected for the full year or any other period.
Segment Revenue and NOI
FREIT’s commercial segment, which consists of multi-tenanted retail centers and single-tenanted properties, experienced a decrease in total revenue of 30.8% for the current six months compared to the same period last year. However, the residential segment reported a decrease in total revenue of 12.9% for the current six months compared to the prior year.
The report also provides information on same-property net operating income (NOI) for both the commercial and residential segments. Same-property NOI increased by 3.8% for the commercial segment and decreased by 8.3% for the residential segment for the current six months compared to the prior year.
Conclusion
In conclusion, First Real Estate Investment Trust Of New Jersey has reported a decrease in net income for the second quarter of 2023 compared to the same period last year. This decrease was primarily attributed to increases in financing costs and total operating expenses at residential properties. However, there were also increases in investment income and revenue, excluding the properties that were sold in the prior year.
Note that we may hold securities mentioned in this article. All data is based on recent SEC filings. Even though we have implemented various manual and automatic fact-checking and data acquisition processes, some incorrect information may have slipped through (false positive). Let us know if you find any inconsistencies!