| Mortgages payable and line of credit |
Note 9 – Mortgages payable and line of credit:
The following table is a summary of mortgages
payable as of April 30, 2025 and October 31, 2024:
| | | | | Interest Rate at | | | Mortgages Payable as of | | | Mortgages Secured By: | | Maturity | | April 30, 2025 | | | April 30, 2025 | | | October 31, 2024 | | | | | | | | | | (In Thousands of Dollars) | | | Steuben Arms - River Edge, NJ (A) | | 5/31/2027 | | | 6.75% | | | $ | 8,762 | | | $ | 8,811 | | | Berdan Court - Wayne, NJ | | 8/31/2029 | | | 3.54% | | | | 28,457 | | | | 28,728 | | | Westwood Hills - Westwood, NJ | | 9/1/2026 | | | 6.05% | | | | 24,972 | | | | 25,136 | | | Regency Club - Middletown, NY (B) | | 12/15/2027 | | | 6.05% | | | | 13,836 | | | | 13,920 | | | Station Place - Red Bank, NJ | | 12/15/2027 | | | 4.35% | | | | 11,157 | | | | 11,281 | | | Westwood Plaza - Westwood, NJ (C) | | 5/1/2025 | | | 8.50% | | | | 15,719 | | | | 15,995 | | | Preakness S/C - Wayne, NJ | | 8/1/2025 | | | 5.00% | | | | 25,000 | | | | 25,000 | | | Total fixed rate mortgages payable | | | | | | | | | 127,903 | | | | 128,871 | | | Total unamortized debt issuance costs | | | | | | | | | (668 | ) | | | (799 | ) | | Total mortgages payable, net | | | | | | | | $ | 127,235 | | | $ | 128,072 | |
| (A) | On December 1, 2023, the mortgage secured by an apartment building located in River Edge, New Jersey came
due. Provident Bank extended the initial maturity date of this loan for a 90-day period with a maturity date of March 1, 2024 and further
extended this loan for another 60-day period with a maturity date of June 1, 2024, based on the same terms and conditions of the existing
loan agreement. On May 1, 2024, FREIT entered into a loan extension and modification agreement with Provident Bank, effective June 1,
2024, with a then outstanding loan balance of approximately $8.9 million. Under the terms and conditions of this loan extension and modification,
the maturity date of this loan is extended for three years to May 31, 2027, the interest rate on the outstanding debt is based on a fixed
interest rate of 6.75% and monthly installments of principal and interest of approximately $58,016 are required. |
| | |
| (B) | On December 15, 2024, the mortgage secured by an apartment building located in Middletown, New York and
the corresponding interest rate swap contract on its underlying loan came due with no settlement of the swap contract due at maturity.
Effective December 15, 2024, FREIT Regency, LLC entered into a loan extension and modification agreement with the lender of this loan,
Provident Bank, with a then outstanding loan balance of approximately $13.9 million. Under the terms and conditions of this loan extension
and modification, the maturity date of this loan is extended for three years to December 15, 2027, the interest rate on the outstanding
debt is based on a fixed interest rate of 6.05% and monthly installments of principal and interest of approximately $84,521 are required. |
| | |
| (C) | Effective February 1, 2023, FREIT entered into a loan extension and modification agreement with Valley
National Bank on its loan secured by the Westwood Plaza shopping center located in Westwood, New Jersey with a then outstanding balance
of approximately $16.9 million. Under the terms and conditions of this loan extension and modification, the maturity date of the loan
was extended for a term of one (1) year from February 1, 2023 to February 1, 2024 with the option of FREIT to extend for one additional
year from the extended maturity date, subject to certain provisions of the loan agreement. The loan was based on a fixed interest rate
of 7.5% and was payable based on monthly installments of principal and interest of approximately $157,347. Additionally, FREIT funded
an interest reserve escrow account for this loan (“Escrow”) at closing representing the annualized principal and interest
payments for one (1) year, amounting to approximately $1,888,166. On October 31, 2023, FREIT exercised its right, pursuant to the loan
agreement, to extend the term of this loan for one additional year from an initial maturity date of February 1, 2024 to a new maturity
date of February 1, 2025. This loan extension was based on a fixed interest rate of 8.5% and was payable based on monthly installments
of principal and interest of approximately $166,727. Additionally, FREIT funded the Escrow with an additional $112,556, increasing the
Escrow balance to $2,000,722, which represented the annualized principal and interest payments for one (1) year under this loan extension.
Effective February 1, 2025, Valley National Bank extended this loan for 90 days from a maturity date of February 1, 2025 to a maturity
date of May 1, 2025 under the same terms and conditions of the existing loan agreement. |
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 is extended for one year to May 1, 2026, the interest rate on the outstanding
debt is based on a fixed interest rate of 8.5% and monthly installments of principal and interest of approximately $107,978 are required.
Additionally, the Escrow balance was reduced from $2,000,722 to $1,295,739 resulting in a refund to FREIT of approximately $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. 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 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 is based on a floating interest rate of prime minus 25 basis points with a floor of 6.75%. As
of April 30, 2025 and October 31, 2024, there was no amount outstanding and $13 million was available under the line of credit.
While FREIT intends to renew or refinance its
debt obligations as they become due, there can be no assurance that it will be successful or, if successful, that the new terms will be
similar to the terms of its existing debt obligations or as favorable.
Principal amounts (in thousands of dollars) due
under the above obligations in each of the next five years ending October 31, is as follows:
Year Ending
October 31, | |
Amount |
|
| 2025 | |
$ | 32,445 |
(a)(c) |
| 2026 | |
| 35,745 |
(b) |
| 2027 | |
| 9,654 |
|
| 2028 | |
| 24,521 |
|
| 2029 | |
| 26,506 |
|
Includes the following:
| (a) | The $5.7 million (including deferred interest of approximately $0.2 million) pay down of the loan on the
Westwood Plaza shopping center paid in May 2025 when FREIT entered into a loan extension and modification agreement with Valley National
Bank. |
| (b) | The $10 million remaining loan balance on the Westwood Plaza shopping center loan, which per the loan extension
and modification agreement the maturity date of this loan is extended for one year to May 1, 2026. |
| (c) | The loan on the Preakness shopping center located in Wayne, New Jersey in the amount of approximately $25
million, which has a maturity date of August 1, 2025. Management expects this loan to be extended, however, until such time as a definitive
agreement providing for an extension of this loan is entered into, there can be no assurance this loan will be extended. |
Fair value of long-term debt:
The following table shows the estimated
fair value and net carrying value of FREIT’s long-term debt at April 30, 2025 and October 31, 2024:
| ($ in Millions) |
|
April 30, 2025 |
|
October 31, 2024 |
| |
|
|
|
|
| Fair Value |
|
$124.5 |
|
$124.7 |
| |
|
|
|
|
| Carrying Value, Net |
|
$127.2 |
|
$128.1 |
Fair values are estimated based on market
interest rates at April 30, 2025 and October 31, 2024 and on a discounted cash flow analysis. Changes in assumptions or estimation methods
may significantly affect these fair value estimates. The fair value is based on observable inputs (level 2 in the fair value hierarchy
as provided by authoritative guidance).
|