SEC Company Response from FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY, INC. (FREVS) (CIK 0000036840) (FREVS) — Jul 9, 2013
FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY, INC. (FREVS) (CIK 0000036840)
Date: July 9, 2013 · CIK: 0000036840 · Accession: 0000914317-13-000873
AI Filing Summary & Sentiment
File numbers found in text: 000-25043
Referenced dates: June 10, 2013
Letter
Securities and Exchange Commission Division of Corporation Finance Attention: Mark Rakip, Senior Staff Accountant Form 10-K for the Fiscal Year Ended October 31, 2012 Filed January 14, 2013 File No. 000-25043
Re: First Real Estate Investment Trust of New Jersey
Dear Mr. Rakip:
I appreciate your time in discussing the options to FREIT’s response to your recent comment letter dated June 10, 2013. As I indicated on the phone, I worked-up two different alternatives for the FFO calculation (see attached) that we believe comply with NAREIT’s basis for the calculation of FFO. Although Draft #1 complies with NAREIT’s definition, it can be a bit confusing to the reader. Our preference is Draft #2, which eliminates the need to present the line item “FFO from discontinued operations” by simply presenting the depreciation related to discontinued operations. I also, researched the FFO presentation of quite a few other REITs’ 10Qs and 10Ks, and none of the REITs that reported discontinued operations for the period, presented the line item FFO from discontinued operations. What they did present was a separate line for depreciation related to discontinued operations, which is what we’re proposing. As you’ll note, the FFO under each alternative is exactly the same, but Draft #2 is much easier to understand. Please review the attached and let me know if you’ll accept Draft #2 for our future Exchange Act filings.
Since we received the initial letter from you on June 10th, our deadline for filing our response is Friday, June 21st. Could you kindly extend our response deadline by another 10 business days?
Regards,
/s/ Andrew M. Czyzewski
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CORRESP
1
filename1.htm
June 19, 2013
Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, DC 20549
Attention: Mark Rakip, Senior Staff Accountant
Re: First Real Estate Investment Trust of New Jersey
Form 10-K for the Fiscal Year Ended October 31, 2012
Filed January 14, 2013
File No. 000-25043
Dear Mr. Rakip:
I appreciate your time in discussing the options to FREIT’s
response to your recent comment letter dated June 10, 2013. As I indicated on the phone, I worked-up two different alternatives
for the FFO calculation (see attached) that we believe comply with NAREIT’s basis for the calculation of FFO. Although Draft
#1 complies with NAREIT’s definition, it can be a bit confusing to the reader. Our preference is Draft #2, which eliminates
the need to present the line item “FFO from discontinued operations” by simply presenting the depreciation related
to discontinued operations. I also, researched the FFO presentation of quite a few other REITs’ 10Qs and 10Ks, and none of
the REITs that reported discontinued operations for the period, presented the line item FFO from discontinued operations. What
they did present was a separate line for depreciation related to discontinued operations, which is what we’re proposing.
As you’ll note, the FFO under each alternative is exactly the same, but Draft #2 is much easier to understand. Please review
the attached and let me know if you’ll accept Draft #2 for our future Exchange Act filings.
Since we received the initial letter from you on June 10th,
our deadline for filing our response is Friday, June 21st. Could you kindly extend our response deadline by another 10 business
days?
Regards,
/s/ Andrew M. Czyzewski
Andrew M. Czyzewski
Controller, Hekemian & Co., Inc.
DRAFT #1
PROPOSED FFO & AFFO PRESENTATION
Funds From Operations ("FFO")
Year Ended October 31,
2012
2011
2010
($ in thousands, except per share amounts)
Net income
$ 11,996
$ 6,713
$ 4,131
Depreciation
6,186
6,070
5,996
Amortization of deferred leasing costs
291
282
284
Discontinued operations
(253 )
(283 )
(223 )
Gain on sale of discontinued operations (net of tax)
(7,528 )
—
—
FFO from discontinued operations
282
322
280
Project abandonment costs related to asset impairment
3,726
—
—
Distributions to minority interests
(834 )
(1,267 )
(1,022 )
FFO
$ 13,866
$ 11,837
$ 9,446
Per Share - Basic
$ 2.00
$ 1.71
$ 1.36
Adjusted Funds From Operations ("AFFO")
FFO
13,866
11,837
9,446
Deferred rents (Straight lining)
(17 )
(242 )
(240 )
Amortization of acquired leases
2
25
30
Under market lease amort re: Giant lease termination
(1,344 )
—
—
FFO from discontinued operations
(282 )
(322 )
(280 )
Capital Improvements - Apartments
(723 )
(433 )
(334 )
AFFO
11,502
10,865
8,622
Per Share - Basic
$ 1.66
$ 1.57
$ 1.24
Weighted Average Shares:
Basic
6,942
6,942
6,942
DRAFT #2
PROPOSED FFO & AFFO PRESENTATION
Funds From Operations ("FFO")
Year Ended October 31,
2012
2011
2010
($ in thousands, except per share amounts)
Net income
$ 11,996
$ 6,713
$ 4,131
Depreciation of consolidated properties
6,186
6,070
5,996
Depreciation of discontinued operations
29
39
57
Amortization of deferred leasing costs
291
282
284
Gain on sale of discontinued operations
(7,528 )
—
—
Project abandonment costs related to asset impairment
3,726
—
—
Distributions to minority interests
(834 )
(1,267 )
(1,022 )
FFO
$ 13,866
$ 11,837
$ 9,446
Per Share - Basic
$ 2.00
$ 1.71
$ 1.36
Adjusted Funds From Operations ("AFFO")
FFO
13,866
11,837
9,446
Deferred rents (Straight lining)
(17 )
(242 )
(240 )
Amortization of acquired leases
2
25
30
Under market lease amort re: Giant lease termination
(1,344 )
—
—
Less: FFO from discontinued operations
(282 )
(322 )
(280 )
Capital Improvements - Apartments
(723 )
(433 )
(334 )
AFFO
11,502
10,865
8,622
Per Share - Basic
$ 1.66
$ 1.57
$ 1.24
Weighted Average Shares:
Basic
6,942
6,942
6,942