FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY, INC. 8-K

What Happened

• First Real Estate Investment Trust of New Jersey, Inc. (FREIT) announced on May 13, 2026 that it entered into a Third Amendment to the Management Agreement (originally dated November 1, 2001) with its external manager, Hekemian & Company, Inc. The amendment addresses fees and a termination fee that become payable if FREIT closes the sale or other disposition of its entire direct or indirect interest in any property managed by Hekemian & Co., including dispositions made in furtherance of the company’s Plan of Voluntary Liquidation. The company filed the amendment and related materials as exhibits to its Form 8-K (press release dated May 14, 2026 and a Plan of Voluntary Liquidation).

Key Details

• Amendment effective May 13, 2026 to the November 1, 2001 Management Agreement with Hekemian & Company, Inc.
• On sale/disposition of FREIT’s entire interest in a managed property, FREIT must pay: (a) all accrued management commissions/fees and reimbursements pro rata up to the termination date; plus (b) a termination fee equal to (Company ownership % in the property) × 2.5 × (one year’s Base Management Fee for that property).
• The Base Management Fee for the termination fee calculation is the average annual base management fee allocable to the property over the immediately prior three fiscal years.

Why It Matters

• This amendment sets a clear, formula-based payout to the external manager when FREIT sells properties—important if the company proceeds with its Plan of Voluntary Liquidation. Investors should note that such termination fees and accrued fees will reduce net proceeds to shareholders on property sales or liquidation events.
• The change clarifies costs tied to dispositions of managed properties and makes the financial impact of manager termination predictable (ownership percentage, a 2.5 multiplier and a three-year average fee are used in the formula), helping investors assess potential liquidation outcomes.