First Real Estate Investment Trust of New Jersey is preparing to wind down after nearly seven decades in operation, approving a plan of voluntary liquidation to sell its assets and return cash to shareholders.
The Hackensack, New Jersey-based REIT said the plan calls for the "sale, conveyance, transfer or disposition" of all assets. The board concluded the approach offers the "most attractive path to maximizing stockholder value," FREIT Chairman Ronald Artinian said in a statement.
The company declined CoStar News' request for additional comment.
The liquidation comes as REITs face mounting challenges. With a market capitalization of about $165 million, FREIT ranks among the smallest publicly traded REITs.
High borrowing costs in recent years have limited access to capital, particularly for microcap players, as investor interest has shifted toward private real estate funds. FREIT did not report raising new capital in 2025.
The move marks a decisive shift for one of the earliest REITs formed shortly after the 1960 legislation that created the sector.
At the heart of FREIT's strategy is an accelerated asset sale program. The portfolio includes seven residential properties in New Jersey and New York, five commercial properties in New Jersey and three vacant land parcels.
At the property level, FREIT's residential portfolio remains stable, generating positive cash flow, according to company filings with the Securities and Exchange Commission. But commercial assets show mixed performance. Some shopping centers maintain strong occupancy and income, while others face elevated vacancy and require repositioning efforts.
One deal is already underway. Last month, FREIT agreed to sell the Franklin Crossing shopping center in Franklin Lakes, New Jersey, for $27 million to an affiliate of Regency Centers.
The company is also incentivizing speed. CEO Robert Hekemian Jr. stands to receive a $1 million bonus if all properties are sold or under contract within 18 months and generate more than $319.9 million in gross proceeds, with all sales required to close, according to a company filing with the SEC.
FREIT estimates net liquidation proceeds will range from $24.44 to $30.03 per share, after accounting for liabilities and transaction costs, according to the firm. That range represents a substantial premium to the company's $15.25 closing stock price on Wednesday, the day before the plan was announced. As of Monday, the company's stock was trading at about $22 per share.
FREIT expects to seek shareholder approval for the plan at a special meeting anticipated this fall.
JLL is serving as financial adviser to support the liquidation plan.