Note 5 – Investment in tenancy-in-common:

On February 28, 2020, FREIT reorganized S and A Commercial Associates Limited Partnership (“S&A”) from a partnership into a tenancy-in-common form of ownership (“TIC”). Prior to this reorganization, FREIT owned a 65% partnership interest in S&A, which owned 100% of the Pierre Towers property located in Hackensack, New Jersey through its 100% interest in Pierre Towers, LLC. Pursuant to the TIC agreement, FREIT ultimately acquired a 65% undivided interest in the Pierre Towers property, which was formerly owned by S&A. While FREIT’s effective ownership percentage in the Pierre Towers property remained unchanged after the reorganization to a TIC, FREIT no longer has a controlling interest in the TIC as the TIC is now under joint control. Based on the guidance of ASC 810, “Consolidation”, FREIT’s investment in the TIC is accounted for under the equity method of accounting.

FREIT’s investment in the TIC was approximately $17 million and $17.5 million at July 31, 2025 and October 31, 2024, respectively. For the nine and three months ended July 31, 2025, FREIT recognized a loss on investment in TIC of approximately $13,000 and $36,000, respectively, in the accompanying condensed consolidated statements of income. For the nine and three months ended July 31, 2024, FREIT recognized a loss on investment in TIC of approximately $143,000 and $96,000, respectively, in the accompanying condensed consolidated statements of income.

Hekemian & Co., Inc. (“Hekemian & Co.”) manages the Pierre Towers property pursuant to a management agreement which renews for successive one (1) year terms unless either party gives written notice of termination to the other party at least sixty (60) days prior to the end of the then-current term. The management agreement expires on February 28, 2026.

The management agreement requires the payment of management fees equal to 5% of rents collected. Management fees, charged to operations, were approximately $324,000 and $108,000 for the nine and three months ended July 31, 2025, respectively, and $318,000 and $108,000 for the nine and three months ended July 31, 2024, respectively. The Pierre Towers property also uses the resources of the Hekemian & Co. insurance department to secure various insurance coverages for its property. Hekemian & Co. is paid a commission for these services. Such commissions were charged to operations and amounted to approximately $62,000 for both the nine and three months ended July 31, 2025 and $55,000 for both the nine and three months ended July 31, 2024.

The following table summarizes the balance sheets of the Pierre Towers property as of July 31, 2025 and October 31, 2024, accounted for by the equity method:

The following table summarizes the statements of operations of the Pierre Towers property for the nine and three months ended July 31, 2025 and 2024, accounted for by the equity method: