FREVS 10-K & 10-Q changes, risk factors and insider trading

Adverse Changes in General Economic Climate: FREIT derives the majority of its revenues from renting apartments to individuals or families, and from retailers renting space at its shopping centers. Over the past several years, there have been many factors aiding in economic growth in the United States such as: (a) improvement in the housing market; (b) increased consumer confidence to push spending modestly higher; (c) improvements in private sector employment; and (d) improved credit availability. However, there have been many factors impacting long-term economic growth, including, without limitation: (i) continued political gridlock in the federal government; (ii) regulatory uncertainties; (iii) continued infrastructure deterioration; (iv) increasing concerns regarding terrorism; (v) rising healthcare costs; (vi) the impact of trade policies; and moretariffs; recently,and (vii) rising energy, wages and consumer prices drivingwhich previously resulted in an increase in inflation along with an increase in interest rates.

Development and construction risks: AsFrom parttime ofto its investment strategy,time, FREIT seeksengages toin acquire property forthe development and construction,construction asof well as to develop and build on land already in its portfolio.property. Development and construction activities are challenged with the following risks, which may adversely affect FREIT’s cash flow:

Debt financing could adversely affect income and cash flow: FREIT relies on debt financing to fund its growth through acquisitionsoperations and development activities. To the extent third party debt financing is not available or not available on acceptable terms, acquisitionsFREIT’s operations and development and construction activities will be curtailed.adversely affected.

As of October 31, 2024,2025, FREIT had approximately $128.9$121.3 million of non-recourse fixed interest rate mortgage debt, including deferred interest, and no non-recourse variable interest rate mortgage debt. These mortgages are being repaid over periods (amortization schedules) that are longer than the terms of the mortgages. Accordingly, when the mortgages become due (at various times), significant balloon payments (the unpaid principal amounts) will be required. FREIT expects to refinance the individual mortgages with new mortgages or exercise extension options available to FREIT or its subsidiaries when their terms expire. To this extent, FREIT has exposure to capital availability and 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 the mortgage debt being retired. To the extent FREIT is unable to refinance its indebtedness on acceptable terms, FREIT might need to dispose of one or more of its properties upon disadvantageous terms.

Qualification as a REIT: Since its inception in 1961, FREIT has elected to qualify as a REIT for federal income tax purposes, and will continue to operate in such a manner as to qualify as a REIT. In order to qualify as a REIT, we must satisfy a number of highly technical and complex provisions of the Internal Revenue Code. Governmental legislation, new regulations, and administrative interpretations may significantly change the tax laws with respect to the requirements for qualification as a REIT, or the federal income tax consequences of qualifying as a REIT. Although FREIT intends to continue to operate in a manner to allow it to qualify as a REIT, future economic, market, legal, tax or other considerations may cause it to revoke the REIT election or fail to qualify as a REIT. Such a revocation would subject FREIT’s income to federal income tax at regular corporate rates, and failure to qualify as a REIT would also eliminate the requirement that FREIT pay dividends to its stockholders.

Residential Properties: Our residential portfolio continues to generate positive cash flow. AverageWhile average rents on turned units (apartments which were vacated and thenexisting re-leasedrenewals toremain generally stable new tenants) has continued to increase across mostmuch of the portfolioportfolio, andwe theare rateseeing ofa increasemodest onbut renewalsnoticeable foreasing existingin tenantsmarket isstrength slightlycompared to prior quarters. This stability softening. These increases should meaningfully contribute to FREIT’s income over time but it is uncertain what impact the significant rise inelevated interest rates and tariffs may have on these properties over the next year.

Commercial Properties: While the Franklin Crossing and Glen Rock shopping centers continue to attainmaintain higher occupancies and realize stronger net operating incomes, the vacancy vacancy rates at the Westwood Plaza and Preakness Shoppingshopping centers remain elevated. WeManagement, continuealong with third-party advisors, is actively working to attract quality tenants and explore redevelopment options to work diligently to locate the right tenant(s) for the vacant anchor tenant spaces at each ofrevitalize these properties. Given the rebounding interest for “brick and mortar” sites, and the fact that these properties are located in desirable communities with high barriers to entry, management remains optimistic about the successful leasing at these two properties.spaces. Additionally, the higherelevated interest rates and uncertainty around tariffs could have a continuedan adverse impact on the operating and financial performance of our existing commercial tenants.

On October 31, 2023, FREIT exercised its right, pursuant to the loan agreement, to extend the term of its loan secured by the Westwood Plaza shopping center located in Westwood, New Jersey for one additional year from an initial maturity date of February 1, 2024 to a new maturity date of February 1, 2025. ThisThe loanoutstanding extensionbalance of itsthis outstanding balanceloan as of February 1, 2024 ofwas approximately $16,458,000 is based on a fixed interest rate of 8.5% and is$16,458,000, payable based on monthly installments of principal and interest of approximately $166,727.$166,727, and bearing interest at a fixed rate of 8.5%. Additionally, FREIT funded anthe interest reserve escrow account for this loan (“Escrow”) with an additional $112,556$112,556, increasing the Escrow balance to $2,000,722, which representsrepresented the annualized principal and interest payments for one (1) year under this loan extension. ThisEffective EscrowFebruary is1, held at2025, Valley National Bank and in the eventextended of a default on this loan, the bank shall be permitted to use the proceeds from the Escrow to make monthly debt service payments on the loan. FREIT is in the process of extending this loan withfor 90 days from a maturity date of February 1, 2025 to a maturity date of May 1, 2025 under the currentsame lender.terms Managementand expectsconditions thisof the existing loan to be extended, however, until such time as a definitive agreement providing for an extension of this loan is entered into, there can be no assurance this loan will be extended. (See Note 5 to FREIT’s consolidated financial statements for further details.)agreement.

On December 15, 2024, the mortgage secured by an apartment building located in Middletown, New York came due. Effective DecemberMay 15,1, 2024,2025, FREIT entered into a loan extension and modification agreement with the lender of this loan, Provident Bank. The outstanding balance of the loan as of the effective date of the extension and modification agreement waswith Valley National Bank and paid down this loan by approximately $13.9$5.7 million (including deferred interest of approximately $0.2 million) bringing the loan balance to $10 million. Under the terms and conditions of this loan extension and modification, the maturity date of this loan is extended for threeone yearsyear to DecemberMay 15,1, 2027,2026, the interest rate on the outstanding debt is based on a fixed atinterest 6.05% perrate yearof 8.5% and monthly installments of principal and interest of approximately $84,521$107,978 are required. The pay down of this loan will result in annual debt service savings of approximately $705,000. Additionally, the Escrow balance was reduced from $2,000,722 to $1,295,739 resulting in a refund to FREIT of $704,983. This Escrow is held at Valley National Bank and in the event of a default on this loan, the bank shall be permitted to use the proceeds from the Escrow to make monthly debt service payments on the loan. (See Note 5 to FREIT’s consolidated financial statements for additionalfurther details.)

FREIT’s revolving line of credit provided by Provident Bank was renewed for a three-year term ending on October 31, 2026. Draws against the credit line can be used for working capital needs and standby letters of credit. Draws against the credit line are secured by mortgages on FREIT’s Franklin Crossing Shopping Center located in Franklin Lakes, New Jersey and retail space in Glen Rock, New Jersey. The total line of credit is $13 million and the interest rate on the amount outstanding will be based on a floating interest rate of prime minus 25 basis points with a floor of 6.75%. As of October 31, 20242025 and 2023,2024, there was no amount outstanding and $13 million was available under the line of credit. (See Note 5 to FREIT’s consolidated financial statements for additional details.)

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 Consolidated Financial Statements which is presented elsewhere in this Form 10-K, have been applied consistently as of October 31, 20242025 and 2023,2024, and for the fiscal years ended October 31, 2024,2025, 20232024 and and 2022.2023. We believe that the following accounting policies or estimates require the application of management's most difficult, subjective, or complex judgments.

Summary revenues and net income for Fiscal 2024 and for the fiscal years year ended October 31, 2024 (“Fiscal 2024”) and October 31, 2023 (“Fiscal 2023”) are as follows:

Same Property Operating Results: FREIT’s commercial segment currently contains five (5) same properties. (See definition of same property under Segment Information above.) The Rotunda Property, the Westridge Square Property and the Damascus Property were excluded from same property results for all periods presented because these properties were sold in Fiscal 2022. Same property revenue and NOI for Fiscal 2024 decreased by 9.5% and 19.9%, respectively, as compared to Fiscal 2023. The changes resulted from the factors discussed in the immediately preceding paragraph.

Although FREIT believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties. These and certain other uncertainties, factors and risks, including those risk factors set forth and further described in Part I, Item 1A entitled “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended October 31, 2025, and other risks described described in our subsequent filings with the SEC, may cause our actual results to differ materially from those projected. Such factors include, include, but are not limited to, the following: general economic and business conditions, including the purchase of retail products over the Internet, which will, among other things, affect demand for 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; interest rate risk; 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 initiatives; environmental/safety requirements; risks of real estate development and acquisitions; and public health crises, epidemics and pandemics; and FREIT’s ability to satisfy the conditions to closing the proposed sale transactionstransaction involving the Franklin Crossing and Westwood Plaza shopping centers.center. The risks with with respect to the development of real estate include: increased construction costs, 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. Other risks to which FREIT is subject are: the possibility that FREIT’s stockholders do not approve the Plan of Voluntary Liquidation; changes in the amount and timing of the total liquidating distributions, including as a result of unexpected levels of transaction costs, delayed or terminated closings, liquidation costs or unpaid or additional liabilities and obligations; the possibility of converting to to a liquidating trust; and the occurrence of any event, change or other circumstances that could give rise to the termination of the Plan Plan of Voluntary Liquidation.

Residential Properties: Our residential portfolio continues to generate positive cash flow. While average rents on turned units and renewal leases have remained generally stable across much of the portfolio, we are observing a modest but noticeable softening in market conditions compared to prior quarters. This relative stability shouldhas continuecontinued to support FREIT’s income over time; however, the potential impact of elevated interest rates, inflation, and global energy prices and broader economic conditions on portfolio performance over the next year remains uncertain.

Commercial Properties: TheVacancy vacancyrates rates at the Westwood Plaza and Preakness shopping centers remain elevated. Additionally,Higher thevacancy somewhatlevels and continued uncertainty in economic conditions could adversely affect rental income and property performance. In addition, elevated interest ratesrates, inflation and other economic conditions could have anadversely adverse impact onaffect the operating and financial performancecondition of our existing and prospective commercial tenants, which could affect their ability to meet their lease obligations and could make it more difficult to attract and retain tenants.

Franklin Crossing PurchaseSale: and Sale Agreement: On April 8, 2026, FREIT (the “Seller”) entered into a Purchase and Sale Agreement (the “Franklin Crossing Agreement”) with with an affiliate of Regency Centers Corporation (the “Purchaser”), pursuant to which the Seller willwould sell to the Purchaser 100% 100% of Seller’s ownership interests in the Franklin Crossing shopping center located in Franklin Lakes, New Jersey, (“Franklin Crossing”) in exchange for the purchase price of $27,000,000, subject to the terms and conditions of the Franklin Crossing Agreement. Upon signing the Franklin Crossing Agreement, the Purchaser delivered into escrow held by the title company a deposit in the amount of $1,000,000 (the “Initial Franklin Crossing Deposit”), which was only refundable during the 30-day due diligence period immediately following the signing. After the expiration of this period on May 8, 2026, the Initial Franklin Crossing Deposit became non-refundable except in connection with certain rights to terminate the Franklin Crossing Agreement, and the Purchaser deposited into escrow held by the title company an additional amount of $1,000,000, which is non-refundable except in connection with certain rights to terminate the Franklin Crossing Agreement.

TheFREIT’s Board of Directors (“Board”) unanimously approved the Westwood Plaza Agreement and the transaction contemplated thereby. (See Note 1314 to FREIT’s condensed consolidated financial statements for additional information.)

Approval of Plan of Voluntary Liquidation: On May 12, 2026, FREIT’s Board unanimously determined advisable and approved a Plan of Voluntary Liquidation (the “Plan of Voluntary Liquidation”). The Plan of Voluntary Liquidation provides for the Company’s complete liquidation and dissolution in accordance with Section 331, Section 336 and Section 346(a) of the Internal Revenue Code of 1986, as amended, and the Maryland General Corporation Law. Effectiveness of the Plan of Voluntary Liquidation is subject to approval by the affirmative vote of the holders of Common Stock entitled to cast a majority of all the votes entitled to be cast on the matter. FREITThe currently anticipates that the Plan of Voluntary LiquidationCompany will be submitted forseek stockholder approval for the Plan at a special meeting of the stockholders, expectedscheduled to occurbe inheld theon FallSeptember of29, 2026.

Upon the effectiveness of the Plan of Voluntary Liquidation and pursuant thereto, the Company is authorized to sell, convey, transfer and deliver or otherwise dispose of, or cause its subsidiaries to sell, convey, transfer and deliver or otherwise dispose of, all of their remainingthe assets, without further approvalstockholder of the stockholders.approval. The Plan of Voluntary Liquidation further provides that upon a determination of the Board, the Company may transfer and assign any remaining assets of the Company and its subsidiaries to a liquidating trust (a “Liquidating Trust”), subject to the terms of the Plan of Voluntary Liquidation, and the Board may cause the Company to make the final distribution to the Company’s stockholders as a distribution in kind of beneficial interests in the Liquidating Trust, at such time as the Board deems appropriate or advantageous in its discretion. (See Note 13 to FREIT’s condensed consolidated financial statements for additional information.)

Third Amendmentand Fourth Amendments to Management Agreement: On May 13, 2026, FREIT entered into a Third AmendmentAmendment, subsequently amended on September 10, 2026 as a Fourth Amendment, to the Management Agreement dated November 1, 2001 between the Company and Hekemian & Co. The Third Amendmentand providesFourth Amendments provide that upon the closing of any sale or other disposition of the Company’s entire direct or indirect interest in each property managed by Hekemian & Co.,Co, including sales or dispositions of a managed property in furtherance of the Plan of Voluntary Liquidation,Liquidation (See Note 13 to FREIT’s condensed consolidated financial statements for further details.), the Management Agreement shall automatically terminate with respect to such property and the Company shall pay to Hekemian & Co. (a) any and all commissions and fees for management services and reimbursement required to be paid by the Company pursuant to the Management Agreement in respect of the applicable property up to the termination date, calculated on a pro rata basis plus (b) a termination fee in respect to such property equal to the product of (x) the Company’s direct or indirect percentage ownership interest in such property times (y) 2.5 times (z) one (1) year’s Base Management Fee in respect of such property. The Base Management Fee is computed by dividing the annual base management fee allocable to the applicable property paid by the Company to Hekemian & Co. over the immediately prior three (3) fiscal years prior to such termination by three (3).

Upon the closing of any sale or other disposition of the Company’s entire direct or indirect interest in a managed property, including sales or dispositions in furtherance of the Plan of Voluntary Liquidation, the Company is required to pay to Hekemian & Co. a fee equal to 1.65% of the sales price for the property. In the event that the Company owns less than a 100% interest in a property, then the total individual property istermination notfee whollyand owned,sale of directlyproperty fee with respect to such property shall be computed based upon 100% of such property. FREIT shall be responsible for the payment of a percentage of the fee equal to its direct or indirectly,indirect bypercentage ownership of the Company,applicable the sales fee payable toproperty, Hekemian & Co. shall cause only be payable in respect of the Company’sother percentage ownership shareowner(s) of the applicable property. (See Note 13property to FREIT’s condensedpay consolidatedthe financialremaining statementsportion of such fee and FREIT shall have no responsibility for additionalthe remaining information.)portion of such fee.

Incentive Compensation Arrangement: To provide an incentive to Robert S. Hekemian, Jr., Chief Executive Officer, President and a director of the Trust, to facilitate the timely sale of FREIT’s properties,properties under the Plan of Voluntary Liquidation, the Board has approved an incentive compensation arrangement that will entitle Mr. Hekemian to a $1,000,000 cash bonus if the Company sells and/or enters into contracts to sell all of its real properties within 18 months after the approval of the Plan of Voluntary Liquidation by FREIT’s stockholders and receives aggregate gross proceeds from such sales in excess of $319.9 million. To receive the bonus, the sale of all of the Company’s properties must close.

Stockholder Rights Agreement Extension: On May 13, 2026, FREIT’s Board entered into a First Amendment to the Stockholder Rights Agreement dated July 31, 2023, between the Company and Computershare Trust Company, N.A., as Rights Agent. Pursuant to the terms of theThe First Amendment to the Stockholder Rights Agreement, Agreement extends the term and final expiration termdate of the stockholderStockholder rightsRights will be extendedAgreement from July 31, 2026 to July 31, 2029. (See Note 1315 to FREIT’s condensed condensed consolidated financial statements for additional information.)

Effective May 1, 2025, FREIT entered into a loan extension and modification agreement with Valley National Bank and paid down this loan by approximately $5.7 million (including deferred interest of approximately $0.2 million) bringing the loan balance to $10 million. Under the terms and conditions of this loan extension and modification, the maturity date of this loan was extended for one year to May 1, 2026, the interest rate on the outstanding debt was based on a fixed interest rate of 8.5% and monthly installments of principal and interest of approximately $107,978 were required. The pay down of this loan resulted in annual debt service savings of approximately $705,000. Additionally, the Escrow balance was reduced from $2,000,722 to $1,295,739 resulting in a refund to FREIT of $704,983. This Escrow is held at Valley National Bank and in the event of a default on this loan, the bank shall be permitted to use the proceeds from the Escrow to make monthly debt service payments on the loan. This loan has been further extended by Valley National Bank forhas anissued additionalseveral 90extensions daysof the loan’s maturity date, with athe newmost maturityrecent dateextension ofthrough August November 1, 2026 2026, based on the same terms and conditions of the existing loan agreement. (See Note 7 to FREIT’s condensed consolidated financial statements statements for further details.)

FREIT’s revolving line of credit in the amount of $13 million, provided by Provident Bank, was set to expire on October 31, 2026. Draws against the $13 million credit line were previously secured by mortgages on FREIT’s Franklin Crossing shopping center in Franklin Lakes, New Jersey and retail space in Glen Rock, New Jersey. On May 26, 2026, FREIT’s $13 million line of credit has beenwas replaced with a $20 million line of creditcredit, provided by Provident BankBank, and secured by a mortgage on FREIT’s Boulders apartment property in Rockaway, New Jersey. Draws against this credit line can be used for working capital needs and standby letters of credit. The line of credit will expire on October 31, 2029 and the interest rate on any amount outstanding will be based on a floating interest rate of prime minus 25 basis points with a floor of 6.75%. As of July 31, 2026 and October 31, 2025 there was no amount outstanding and $20 million was available under this line of credit as of July 31, 2026. (See Note 7 to FREIT’s condensed consolidated financial statements for further details.)

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 Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025, have been applied consistently as of AprilJuly 30,31, 2026, and for the sixnine and three months ended AprilJuly 30,31, 2026 and 2025. We believe that the following accounting policies or estimates require the application of management's management's most difficult, subjective, or complex judgments.

Real estate revenue for the sixnine months ended July April 30,31, 2026 (“Current SixNine Months”) increased 4.2% to $15,138,000$22,675,000 compared to $14,527,000$21,771,000 for the sixnine months ended April 30,July 31, 2025 (“Prior Year’s SixNine Months”). Real estate revenue for the three months ended AprilJuly 30,31, 2026 (“Current Quarter”) increased 5.2%4.0% to $7,634,000$7,537,000 compared to $7,258,000$7,244,000 for the three months ended AprilJuly 30,31, 2025 (“Prior Year’s Quarter”).

The increase in revenue of approximately $376,000$900,000 for the Current QuarterNine Months was primarily driven by aan $111,000approximately $530,000 increase in residential revenue from higher base rents, despite a modest decline in average occupancy from 97.1%96.9% forin the Prior Year’s QuarterNine Months to 95.7%95.8% forin the Current Quarter,Nine Months, and an aapproximately $238,000$380,000 increase in commercial revenue. Commercial revenue growth was primarily reflectsattributable higherto the following: (a) an approximately $150,000 increase in reimbursable revenuerevenue, (up $148,000mainly due to higher recoveries from a collectability-constrained tenant at the Preakness shopping center and increased reimbursable costs, primarily related to snow removal; costsand (b), $61,000approximately in$250,000 of additional additional rent from TJ Maxx at the Westwood Plaza shopping center following the expiration of its co-tenancy clause, and a $39,000 increase in revenue recognized from a collectability-constrained tenant at the Preakness shopping center.clause.

Net income-common equity for the Current SixNine Months Months and Current Quarter was $1,559,000$21,720,000 ($0.21$2.90 per share basic and diluted) and $20,161,000 ($2.69 per share basic and diluted) compared to $1,508,000$2,387,000 ($0.20$0.32 per share basic and diluted) forand the Prior Year’s Six Months. Net income-common equity for the Current Quarter was $616,000$879,000 ($0.08$0.12 per share basic and diluted) compared to $894,000 ($0.12 per share basic and diluted), for the Prior Year’s Quarter.comparable periods.

The decrease in adjusted net income-common equityincome of approximately $278,000$660,000 for the Current QuarterNine Months was primarily driven by higher operating and other expenses and lower investment income, partially offset offset by higher revenue.revenue of approximately $900,000 (FREIT’s share $780,000). Expenses increased primarily due to aan $261,000approximately $880,000 rise in general and administrative expenses (“G&A”) related primarily to legal and professional costs associated with potentialthe sales propertyof salescertain properties and the development of a plan of liquidation, aan $193,000approximately $310,000 increase in snow removal costs (FREIT’s share $118,000$240,000) dueresulting tofrom a harsher winter, and an $82,000approximately $150,000 increase in lossutility oncosts investment(FREIT’s inshare TIC.$90,000) due to rising energy prices. Investment income declined by approximately $85,000$210,000 (FREIT’s share $78,000$180,000), primarily due to lower average cash balances. These factors were partially offset by higher revenue of approximately $376,000 (FREIT’s share $320,000).

The following tables set forth comparative net operating income ("NOI") data for FREIT’s real estate segments and reconcile the NOI to condensed consolidated net income-common equity for the Current SixNine Months and Current Quarter as compared to the Prior Year’s comparable periods (see below for definition of NOI):

The commercial segment contains fivefour (54) separate properties.properties, Fourexcluding the Franklin Crossing shopping center sold on July 8, 2026. (See Note 12 to FREIT’s condensed consolidated financial statements for additional details on the sale of this property.) Three of these properties are multi-tenanted retail centers and one is single tenanted on land located in Rockaway, New Jersey owned by FREIT from which it receives monthly rental income from a tenant who has built and operates a bank branch on the land.

As indicated in the tables above under the caption Segment Information, total revenue from FREIT’s commercial segment for the Current SixNine Months and Current Quarter increased by 5.4% 6.9% and 12.9%,2.0%, respectively, and NOI increased by 7.4%8.8% and 7.5%,11.8%, respectively, as compared to the Prior Year’s comparable periods. Average Average occupancy for all commercial properties for the Current SixNine Months and Current Quarter decreasedincreased by 0.7%0.1% and 0.6%,2.5%, respectively, as compared to the Prior Year’s comparable periods.

The increase in NOI for the Current SixNine Months was primarily driven by the following: (a) an increase in revenue of approximately $262,000$300,000; offset by (b) an increase in total operating expenses of approximately $178,000,$150,000, primarily related to snow removal costs due to a harsher winter.

Leasing: The following table reflects leasing activity at FREIT’s commercial properties for comparable leases (leases executed for spaces in which there was a tenant at some point during the previous twelve-month period) and non-comparable leases for the Current SixNine Months (excluding any leases executed for the Franklin Crossing shopping center which was sold in the Current Quarter):

As indicated in the tables above under the caption Segment Information, total revenue from FREIT’s residential segment for the Current SixNine Months and Current Quarter increased by 2.8%3.2% and 2.0%,4.1%, respectively, and NOI increased by 2.7%3.5% and decreased by 1.5%,4.9%, respectively, compared to the Prior Year’s comparable periods. periods. Average occupancy for all residential properties for the Current SixNine Months and Current Quarter decreased by 1.3%1.1% and 1.4%,0.6%, respectively, compared to the Prior Year’s comparable periods.

The increase in revenue for the Current SixNine Months was primarily attributable to an increase inhigher base rentsrents, acrossdespite alla propertiesmodest whiledecline thein average occupancy rate declined from 96.9% in the Prior Year’s Six Nine Months to 95.6%95.8% in the Current SixNine Months. The increase in NOI for the Current SixNine Months was primarily attributable to the following: (a) an increase in revenue of approximately $303,000$530,000; offset by (b) an increase in snow removal costs of approximately $111,000 $120,000 due to a harsher winter; and (c) an increase in utility costs of approximately $94,000$90,000 due to rising energy costs.prices.

Total net financing costs for the Current SixNine Months decreasedincreased by approximately $63,000$100,000 or 1.7%,1.8%, as compared to the Prior Year’s SixNine Months which was was primarily attributable to the following: (a) a decrease of approximately $232,000 resulting from the $5.7 million pay down of the loan on the Westwood Plaza shopping center in May 2025; offset by (b) an increase of approximately $157,000$360,000 resulting from the extensionloan feemodification paidand toextensions extendof the loan on the Preakness shopping center in the Current SixNine Months.Months; offset by (b) a decrease of approximately $280,000 resulting from the $5.7 million pay down of the loan on the Westwood Plaza shopping center in May 2025.

Total net financing costs for the Current Quarter decreasedincreased by approximately $51,000$170,000 or 2.8%,9.1%, compared to the Prior Year’s Quarter which was primarily attributable to the following:modification (a)and a decreaseextensions of approximately $109,000 resulting from the $5.7 million pay down of the loan on the Westwood Plaza shopping center in May 2025; offset by (b) an increase of approximately $75,000 resulting from the extension fee paid to extend the loan on the Preakness shopping center in the Current Quarter.center.