BRT BRT Apartments Corp

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.   )

BRT REALTY TRUST
60 Cutter Mill Road
Suite 303
Great Neck, New York 11021
(516) 466-3100

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
March 9, 2015

The Annual Meeting of Shareholders of BRT Realty Trust will be held on Monday, March 9, 2015, at 9:00 a.m. local time, at the offices of BRT Realty Trust, 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021, for the following purposes:

Shareholders of record at the close of business on January 15, 2015 are entitled to notice of and to vote at our annual meeting. It is important that your common shares of beneficial interest be represented and voted at the meeting. You can vote your common shares of beneficial interest by completing and returning the proxy card. Certain shareholders can also vote their common shares of beneficial interest over the internet or by telephone. If internet or telephone voting is available to you, voting instructions are printed on the proxy card sent to you. You can revoke a proxy at any time prior to its exercise at the meeting by following the instructions in the accompanying proxy statement.

	S. Asher Gaffney
	Secretary

Great Neck, New York
January 16, 2015

BRT REALTY TRUST
2015 ANNUAL MEETING
PROXY STATEMENT

TABLE OF CONTENTS

PROXY STATEMENT

GENERAL

Our board of trustees is furnishing you with this proxy statement to solicit proxies on its behalf to be voted at the 2015 annual meeting of shareholders of BRT Realty Trust. In this proxy statement we refer to BRT Realty Trust as “BRT,” “we,” “our,” “us,” “our company,” or the “Trust” and to our common shares of beneficial interest as “common shares” or “shares.” The meeting will be held at our offices, 60 Cutter Mill Road, Suite 303, Great Neck, New York, at 9:00 a.m., local time, on Monday, March 9, 2015.

Our fiscal year begins on October 1^st and ends on September 30^th. Unless otherwise indicated or the context otherwise requires, all references to a year (e.g. 2014), refer to the applicable fiscal year ended September 30^th.

Our executive offices are located at 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021. Our telephone number is (516) 466-3100.

QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING

What is the purpose of the annual meeting?

At our annual meeting, shareholders will vote on the following matters:

Who is entitled to vote?

We are mailing this proxy statement on or about January 16, 2015 to our shareholders of record on January 15, 2015. The record date was established by our board of trustees. Shareholders as of the close of business on the record date of January 15, 2015 are entitled to notice of and to vote their shares at the meeting. Each share is entitled to one vote and shareholders do not have the right to vote cumulatively in the election of trustees. Our common shares constitute our only outstanding class of voting securities and will vote as a single class on all matters to be considered at the annual meeting.

What constitutes a quorum?

A quorum is the presence in person or by proxy of shareholders holding a majority of shares entitled to vote at the meeting. On the record date, there were 14,101,056 common shares outstanding and entitled to vote. In order to carry on the business at the meeting, a majority of our outstanding shares must be present in person or by proxy. This means that at least 7,050,529 common shares must be represented at the meeting, either in person or by proxy, to constitute a quorum. Generally, action cannot be taken at the meeting unless a quorum is present.

How do I vote?

Because many shareholders cannot attend the meeting in person, it is necessary that a large number of shares be represented by proxy. Most shareholders have a choice of voting over the Internet, by using a toll-free telephone number or by completing a proxy card and mailing it in the postage paid envelope provided. Please refer to your proxy card or to the information provided by your bank, broker, or other holder of record to see which options are available to you. You should be aware that if you vote over the Internet, you may incur costs, such as telephone and Internet access charges, for which you will be responsible. The Internet and telephone voting facilities for shareholders of record will close at 11:59 p.m., New York City time on March 8, 2015. If you vote by telephone or via the Internet, it is not necessary to return a proxy card.

If you wish to name as a proxy someone other than the proxies named on the proxy card, you may do so by crossing out the name of the designated proxies and inserting the name of another person. In that case, you

should sign the proxy card and deliver it to the person so named, and the person so named must then be present to vote at the meeting. Proxy cards so marked should not be mailed to us or to our transfer agent, American Stock Transfer and Trust Company, LLC.

Is my vote important?

Yes. Under applicable rules, brokers, banks and other nominees are prohibited from voting shares held in street name on matters pertaining to the election of trustees unless the client specifically instructs his or her nominee to vote their shares. Shares held in street name and for which voting instructions are not provided and accordingly, as to which bank, brokers and other nominees do not have discretionary authority to vote on their clients’ behalf, are referred to “broker non-votes.”

The proposal to elect the nominees as trustees requires the approval of a majority of our outstanding shares. Because “broker non-votes” and abstentions will have the effect of a vote against the election of the nominees to serve as trustees, it is very important that you vote your shares.

Who will count the vote?

A representative of our transfer agent, American Stock Transfer and Trust Company, LLC, will tabulate the votes and act as inspector of elections.

Can I revoke my proxy before it is exercised?

If you hold stock directly in your name, you can revoke your proxy at any time before it is voted at the annual meeting by filing a written revocation with our Secretary, or delivering to American Stock Transfer and Trust Company, LLC a properly executed proxy bearing a later date. If you vote by telephone or Internet you may also revoke your proxy with a timely and valid later telephone or Internet vote, as the case may be. You may also revoke your proxy by attending the meeting and voting in person. If not so revoked, the shares represented by such proxy will be voted.

If your shares are held in the name of a broker, bank or other nominee, you must contact such nominee and comply with the nominee’s procedures if you want to revoke or change the instructions that you previously provided to the nominee. Attendance at the meeting will not by itself automatically revoke a previously granted proxy.

How will my shares be voted?

All shares entitled to vote and represented by properly completed proxies received prior to the meeting and not revoked, will be voted at the meeting in accordance with your instructions. If no choice is indicated on the proxy card received from a registered holder, the persons named as proxies will vote the common shares “FOR” the three nominees (Alan Ginsburg, Jeffrey A. Gould, and Jonathan H. Simon) for Class I Trustee, “FOR” the ratification of the appointment of BDO USA, LLP as our independent registered public accounting firm for 2015, and as the proxy holders may determine, in their discretion, with respect to other matters that properly come before the meeting. The board of trustees is not currently aware of any business to be acted upon at the meeting other than that which is described in this proxy statement.

Who is soliciting my vote and who pays the cost?

We are soliciting proxies and will pay the entire cost of soliciting proxies, including preparing and mailing this proxy statement. In addition to the solicitation of proxies by mail and through our full-time and part-time employees, we will request banks, brokers, custodians, nominees and other record holders to forward copies of the proxy statement and other soliciting materials to persons for whom they hold common shares and to request instruction on how to vote the shares. We will reimburse such record holders for their reasonable out-of-pocket expenses in forwarding proxies and proxy materials to shareholders. We have retained DF King for a fee of $5,000, plus reasonable out of pocket expenses, to aid in the solicitation of proxies from our shareholders. To the extent necessary in order to ensure sufficient representation at the meeting, we or our proxy solicitor may solicit the return of proxies by personal interview, mail, telephone, facsimile, Internet or other means of communication or electronic transmission. The extent to which this will be necessary depends upon how promptly proxies are returned. We urge you to send in your proxy without delay.

What is householding?

Shareholders who share the same address and last name may receive only one copy of the proxy materials unless we, in the case of shareholders of record, or such shareholder’s broker, bank or nominee, in the case of shareholders whose shares are held in street name, has received contrary instructions. This practice, known as “householding,” is designed to reduce printing and mailing costs. Shareholders desiring to discontinue householding and receive a separate copy of the proxy materials, may (1) if their shares are held in street name, notify their broker, bank or nominee or (2) if they are shareholders of record, direct a written request to: BRT Realty Trust, 60 Cutter Mill Road, Suite 303, Great Neck, NY 11021, Attn: Secretary.

Are our proxy materials available on the Internet?

Our proxy materials are available at: www.brtrealty.com/annualmeetingmaterials.pdf.

When are shareholder proposals due for the 2015 Annual Meeting?

Our annual meeting of shareholders for the year ending September 30, 2015 is scheduled to be held in March 2016. In order to have any proposal presented by a shareholder at the meeting included in the proxy statement and form of proxy relating to the 2015 meeting, the proposal, in writing and addressed to our secretary, must be received by us no later than September 18, 2015. Upon timely receipt of any such proposal, we will determine whether to include such proposal in the proxy statement in accordance with applicable regulations.

For any proposal that is not submitted for inclusion in next year’s proxy statement, but is instead intended to be presented directly at the 2016 annual meeting of shareholders, rules and regulations promulgated pursuant to the Securities Exchange Act of 1934, as amended, permit us to exercise discretionary authority to the extent conferred by proxy if we:

GOVERNANCE OF OUR COMPANY

General

We are governed by a board of trustees and by the committees of the board. Members of the board are kept informed about our business through discussions with our chairman, our president and chief executive officer and our other officers, by reviewing materials provided to them and by participating in meetings of the board and its committees. During 2014, the board held four meetings and each trustee attended at least 75% of the aggregate number of board and applicable committee meetings. We typically schedule a board meeting in conjunction with our annual meeting of shareholders and encourage our trustees to attend the annual meeting of shareholders. All the trustees attended our 2014 annual meeting of shareholders.

Code of Business Conduct and Ethics

We have adopted a code of business conduct and ethics that applies to all trustees, officers, employees, agents and consultants, including our chief executive officer, principal financial officer, principal accounting officer or controller or person performing similar functions. The code of business conduct and ethics covers a variety of topics, including those required by the Securities and Exchange Commission and the New York Stock Exchange. Topics covered include, but are not limited to, conflicts of interest, confidentiality of information, and compliance with laws and regulations. The code of business conduct and ethics, as amended and restated, is available at the corporate governance section of our website at www.brtrealty.com and may be obtained by writing to us at 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021, Attention: Secretary. During 2014, there were no waivers of the provisions of the code of business conduct and ethics with respect to any of our trustees, officers, employees, agents or consultants. We will post any amendments to, or waivers of, our code of business conduct and ethics on our website.

Risk Oversight

Management is responsible for the day-to-day management of risks we face. Our board of trustees has overall responsibility for overseeing risk management with a focus on the more significant risks facing us. Our audit committee oversees risk policies and processes related to our financial statements, financial reporting processes and liquidity risks, our nominating and corporate governance committee oversees corporate governance risks and our compensation committee oversees risks relating to remuneration of our officers and employees. The compensation committee does not believe that the compensation programs which are in place give rise to any risk that is reasonably likely to have a material adverse effect on us.

At each quarterly meeting of the audit committee, a portion of the meeting is devoted to reviewing the status of the properties in our real estate portfolio, related party transactions and other matters which might have a material adverse impact on current or future operations. In addition, at each meeting of the audit committee, our chief financial officer, internal auditor and the independent registered public accounting firm reviewing or auditing, as the case may be, our financial statements, reports to the committee with respect to compliance by us with our internal control policies in order to ascertain that no failures of a material nature have occurred. This process assists the audit committee in overseeing the risks related to our financial statements and the financial reporting process.

At each meeting of the board of trustees, the trustees review risk issues reviewed by the audit committee.

Leadership Structure

Our company is led by Israel Rosenzweig, Chairman of our Board, and Jeffery A. Gould, President and Chief Executive Officer. The board of trustees believes that: (i) separating the role of chairman and chief executive officer is the most appropriate structure at this time because it makes the best use of the abilities of Messrs. Rosenzweig and Gould; and (ii) its risk oversight activities does not have any effect on the board’s leadership structure.

Committees of the Board of Trustees

Our board of trustees has three standing committees: an audit committee, a compensation committee, and a nominating and corporate governance committee. In addition, the board had appointed a special committee whose term ended in 2014. See “ – Special Committee.” The board has adopted a charter for each standing committee,

as well as corporate governance guidelines that address the make-up and functioning of the board. The charter for each standing committee requires that such committee be comprised of at least three independent directors and in the case of the audit committee, also requires that at least one member of the committee qualify as a “financial expert.” All of the members of each committee were independent during their period of service on such committee and in the case of the audit committee, each such member was also financially literate.

You can find each charter and the corporate governance guidelines by accessing the corporate governance section of our website at www.brtrealty.com. Copies of these charters and the corporate governance guidelines may be obtained by writing to us at 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021, Attention: Secretary.

The table below provides membership and meeting information for each of the board committees for 2014:

Audit Committee

This committee is responsible for assisting the board in overseeing, among other things, (i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, (iii) our independent registered public accounting firm’s qualification and independence, (iv) the performance of the accounting firm performing our internal control audit function, and (v) for the preparation of the audit committee report required by the Securities and Exchange Commission for inclusion in this proxy statement. This committee is also responsible for the selection and engagement of our independent registered public accounting firm and for approving related party transactions.

Compensation Committee

This committee reviews and makes recommendations and/or determinations with respect to the salaries, bonuses and stock awards of our trustees and named executive officers.

Nominating and Corporate Governance Committee

This committee’s principal responsibilities include proposing to the board of trustees a slate of nominees for election to the board of trustees at the annual meeting of shareholders, making a recommendation to the board of trustees with respect to the independence of each trustee, identifying and recommending candidates to fill vacancies on the board of trustees or committees thereof between annual meetings of shareholders, proposing a slate of officers to the trustees for election at the annual meeting of the board and monitoring corporate governance matters, including overseeing our corporate governance guidelines.

Special Committee

This committee was established in March 2011 to, among other things, review, analyze, monitor and make recommendations with respect to our management structure and the advisory agreement pursuant to which we make payments to our advisor, REIT Management Corp., which is wholly-owned by Fredric H. Gould, a Trustee and former Chairman of the Board. In March 2014, the Board determined that this committee was no longer necessary and ended its term. See “Executive Compensation—Compensation Discussion and Analysis—Analysis—Advisor Fees.”

Trustee Qualifications

The board believes that it should be comprised of trustees with complementary backgrounds, and that trustees should, at a minimum, have expertise that may be useful to us. Our nominating and corporate governance committee has not adopted a formal diversity policy in connection with the consideration of trustee nominations or the selection of nominees. It considers the personal and professional attributes and the business experience of each trustee candidate to promote diversity of expertise and experience among our trustees. Additionally, trustees should possess the highest personal and professional ethics and should be willing and able to devote the required amount of time to our business.

When considering candidates for trustee, the nominating and corporate governance committee will take into account a number of factors, including the following:

The nominating and corporate governance committee will consider candidates for trustee suggested by shareholders, applying the criteria for candidates described above, considering the additional information referred to below and evaluating such nominees in the same manner as other candidates. Shareholders wishing to suggest a candidate for trustee should write to our Secretary and include:

Before nominating a sitting trustee for re-election at an annual meeting of shareholders, the nominating and corporate governance committee will consider:

When seeking candidates for trustee, the nominating and corporate governance committee may solicit suggestions from management, incumbent trustees or others. The committee or its chairman will interview a candidate if it is believed the candidate might be suitable to be a trustee. The nominating and corporate governance committee may also ask the candidate to meet with management. If the nominating and corporate governance committee believes a candidate would be a valuable addition to the board, it will recommend the candidate’s election to the full board.

The nominating and corporate governance committee generally intends to recommend that the board nominate incumbent trustees whom the committee believes will continue to make important contributions to us.

The committee believes that the continuing service of qualified incumbents promotes stability and continuity, giving us the benefit of the familiarity and insight into our affairs that its trustees have accumulated during their tenure, while contributing to the board’s ability to work as a collective body.

Independence of Trustees

In determining whether our trustees are independent, we apply the New York Stock Exchange’s corporate governance listing standards. Such standards provide:

The board has affirmatively determined that each of Kenneth F. Bernstein, Alan H. Ginsburg, Louis C. Grassi, Gary Hurand, Jeffrey Rubin, Jonathan H. Simon and Elie Weiss, constituting approximately 64% of our trustees, is “independent” for the purposes of Section 303A of the Listed Company Manual of the New York Stock Exchange, and all of the members of our committees are independent for the purposes of Section 303A. The board based these determinations primarily on a review of the responses of our trustees to questions regarding employment and compensation history, affiliations and family and other relationships, discussions with trustees and relevant facts and circumstances provided to management of any relationships bearing on the independence of a trustee.

In determining the independence of each of the foregoing trustees, the board considered that Gary Hurand owns approximately a 40% beneficial interest in a family entity which owns a preferred limited partnership interest in Gould Investors L.P., an affiliate of our company, that is primarily engaged in the ownership and operation of real estate properties held for investment. See “Certain Relationships and Related Transactions.” The preferred limited partnership interest owned by the Hurand family entity had, as of December 31, 2014, a deemed value of approximately $11.7 million (the redemption price of the interest) and limited voting rights, and no member of the Hurand family, including Mr. Hurand, has any management involvement in Gould Investors. For 2014, distributions of approximately $675,000 were accrued and paid on the interests owned by the Hurand family entity. In October 2014, the family entity and Gould Investors agreed that the family entity would defer

its right to require Gould Investors to purchase, and Gould Investors would defer its right to redeem, (i) until the 12 months beginning October 1, 2018, up to 25% of the outstanding preferred interest that would otherwise be subject to potential redemption or repurchase during the six months beginning October 1, 2014 and (ii) until the 12 months beginning October 1, 2019, up to 25% of the outstanding preferred interest, which we refer to as the 2019 partnership interest, that would otherwise be subject to potential or repurchase during the 12 months beginning October 1, 2014. In connection therewith, the parties agreed to reduce the annual distribution rate on the 2019 partnership interest from 8% to 5%. Each 25% preferred interest has a redemption value of approximately $2.9 million.

The board concluded that the foregoing did not disqualify Mr. Hurand from being independent.

Compensation Committee Interlocks and Insider Participation

None of the members of the compensation committee has ever been an officer or employee of our company or any of our subsidiaries or has had any relationship with the Trust that would require disclosure under Item 404 of Regulation S-K (Certain Relationships and Related Party Transactions).

Compensation of Trustees

The following table sets forth the cash compensation payable to the non- management members of our board of trustees for service on our board and the committees thereof:

In addition, in each of 2013 and 2014, each non-management member of our board of trustees was awarded 3,250 restricted common shares under the 2012 Incentive Plan. The restricted shares have a five year vesting period, subject to acceleration upon the occurrence of specified events, during which the registered owner is entitled to vote and receive distributions, if any, on such shares. Non-management trustees who reside outside of the local area in which our executive office is located are reimbursed for travel expenses incurred in attending board and committee meetings.

The following table sets forth the cash and non-cash compensation of trustees for 2014:

Gould and Israel Rosenzweig by REIT Management Corp., our advisor and Majestic Property Management Corp., each of which is wholly-owned by Fredric H. Gould. See “Executive Compensation—Summary Compensation Table” and “Certain Relationships and Related Transactions” for information regarding Jeffrey A. Gould’s compensation and “Certain Relationships and Related Transactions” for information regarding payments to Fredric H. Gould, Matthew J. Gould and Israel Rosenzweig.

The table below shows the aggregate number of unvested restricted shares awarded to and held by the named trustees and the value thereof as of September 30, 2014:

Non-Management Trustee Executive Sessions

In accordance with New York Stock Exchange listing standards, our non- management trustees meet regularly in executive sessions without management. “Non-management” trustees are all those trustees who are not employees or officers of our company and include trustees, if any, who are not employees or officers but who were not determined to be “independent” by our board of trustees. The person who presides over executive sessions of non-management trustees is one of the committee chairmen. To the extent practicable, the presiding trustee at the executive sessions is rotated among the chairmen of the board’s committees.

Communications with Trustees

Shareholders and interested persons who want to communicate with our board or any individual trustee can write to:

BRT Realty Trust
60 Cutter Mill Road, Suite 303
Great Neck, NY 11021
Attention: Secretary

Your letter should indicate that you are a shareholder of BRT Realty Trust. Depending on the subject matter, the Secretary will:

At each board meeting, the Secretary will present a summary of communications received, if any, since the last meeting and make those communications available to the trustees on request.

In the event that a shareholder, employee or other interested person would like to communicate with our non-management trustees confidentially, they may do so by sending a letter to “Non-Management Trustees” at the address set forth above. Please note that the envelope should contain a clear notation that it is confidential.

INFORMATION REGARDING BENEFICIAL OWNERSHIP OF PRINCIPAL
SHAREHOLDERS, TRUSTEES AND MANAGEMENT

The following table sets forth information concerning our common shares owned as of January 15, 2015 by (i) each person beneficially owning five percent or more of our common shares, (ii) each trustee, (ii) each executive officer named in the Summary Compensation Table, and (iii) all trustees and executive officers as a group.

ELECTION OF TRUSTEES
(Proposal 1)

The board of trustees is divided into three classes, each of which is elected for a staggered term of three years. Our Third Amended and Restated Declaration of Trust provides for the number of trustees to be between five and fifteen, the exact number to be determined by our board of trustees. The board has fixed the number of trustees at eleven. The board may, following the meeting, increase or decrease the size of the board and fill any resulting vacancy or vacancies.

At the annual meeting of shareholders, three Class I Trustees (Alan Ginsburg, Jeffrey A. Gould, and Jonathan Simon) are standing for election to our board of trustees. Each nominee has been recommended to our board of trustees by the nominating and corporate governance committee for election at the annual meeting and each nominee has been nominated by our board of trustees to stand for election at the annual meeting, to hold office until our 2018 annual meeting and until his successor is elected and qualified. Class II Trustees will be considered for election at our 2016 annual meeting and Class III Trustees will be considered for election at our 2017 annual meeting. Proxies will not be voted for a greater number of persons than the number of nominees named in the proxy statement.

We expect each nominee to be able to serve if elected. However, if any nominee is unable to serve as a trustee, unless a shareholder withholds authority, the persons named in the proxy card may vote for any substitute nominee proposed by the board of trustees. Each nominee, if elected, will serve until the annual meeting of shareholders to be held in 2018. Each other trustee whose current term will continue after the date of our 2015 annual meeting will serve until the annual meeting of shareholders to be held in 2016 with respect to the Class II Trustees and 2017 with respect to the Class III Trustees.

The following table sets forth certain information regarding each nominee for election to the board of trustees:

Nominees for Election as Class I Trustees Whose Term will Expire in 2018

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE ELECTION OF ALAN GINSBURG, JEFFREY A. GOULD, AND JONATHAN SIMON AS CLASS I TRUSTEES. THE PERSONS NAMED IN THE PROXY CARD INTEND TO VOTE SUCH PROXY FOR THE ELECTION OF SUCH PERSONS AS TRUSTEES.

The following table sets forth certain information regarding trustees whose terms will continue after the date of the annual meeting:

Class II Trustees Whose Term Will Expire in 2016

Class III Trustees Whose Term Will Expire in 2017

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Proposal 2)

General

The audit committee and the board of trustees is seeking ratification of the appointment of BDO USA, LLP (“BDO”) as our independent registered public accounting firm for the year ending September 30, 2015. Representatives of BDO, our auditors for 2014, are expected to be present at the annual meeting and will have the opportunity to make a statement if such representatives desire to do so and will be available to respond to appropriate questions.

We are not required to have our shareholders ratify the selection of BDO as our independent registered public accounting firm. We are doing so because we believe it is good corporate practice. If our shareholders do not ratify the selection, the audit committee will reconsider whether or not to retain BDO, but may, after reconsidering, still decide to retain such firm. Even if the selection is ratified, the audit committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in our best interests.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION OF THE APPOINTMENT OF BDO AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING SEPTEMBER 30, 2015.

Audit and Other Fees

The following table presents, except as otherwise indicated, BDO’s fees (including expenses) for the services indicated for 2014 and 2013:

Approval Policy for Audit and Non-Audit Services

The audit committee annually reviews and approves the retention of our independent registered public accounting firm for each fiscal year and the audit of our financial statements for such fiscal year, including the fee associated with the audit. In addition, the audit committee approves the provision of tax related and other non-audit services. Any fees for the audit and any fees for non-audit services in excess of those approved by the audit committee must receive the prior approval of the audit committee.

Proposals for any non-audit services to be performed by our independent registered public accounting firm must be approved in advance by the audit committee.

For 2014, the audit committee pre-approved all of the audit, tax and non-audit services rendered by our independent registered public accounting firm.

REPORT OF THE AUDIT COMMITTEE

The audit committee of the board of trustees is comprised of three independent trustees and operates under a written charter adopted by the board of trustees. The board of trustees has determined that each member of the audit committee was independent during his service on the committee.

The role of the audit committee is to, among other things, select and engage our independent registered public accounting firm and to oversee and monitor our financial reporting process, the independence and performance of the independent registered public accounting firm and the functioning of our internal controls. It is management’s responsibility to prepare financial statements in accordance with generally accepted accounting principles and of the independent registered public accounting firm to perform an independent audit of the financial statements and to express an opinion on the conformity of those financial statements with generally accepted accounting principles.

In performing its duties, the audit committee:

The audit committee meets with the independent registered public accounting firm and the accounting firm performing the internal control audit function, with and without management present, to discuss the results of their examinations, their evaluations of the internal controls, and the overall quality of our financial reporting.

Based on the reviews and discussions referred to above, the audit committee recommended that the Trust’s audited consolidated financial statements for the year ended September 30, 2014 be included in the Trust’s Annual Report on Form 10-K for the year ended September 30, 2014 for filing with the Securities and Exchange Commission.

Louis C. Grassi (Chairman)
Gary Hurand
Elie Weiss

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Highlights

The following are highlights of our compensation practices; we encourage you to read the more detailed information set forth herein:

General

This compensation discussion and analysis describes our compensation objectives and policies as applied to our chief executive officer, chief financial officer and our three other most highly compensated officers (collectively, the “named executive officers”) in 2014. This discussion and analysis focuses on the information contained in the compensation tables that follow this discussion and analysis. We also describe compensation actions taken historically to the extent it enhances an understanding of our executive compensation disclosure. Generally, our compensation committee oversees our compensation program, recommends the compensation of executive officers employed by us on a full- time basis to our board of trustees for its approval, and our audit committee reviews the appropriateness of the allocation to us under a shared services agreement of the compensation of executive officers who perform services for us on a part time basis. Another element of our compensation program is the fee paid by us to our advisor, REIT Management Corp., pursuant to the advisory agreement, and the related payments by our advisor of compensation to certain of our executive officers.

Historically, we have used the following compensation structure with respect to the compensation paid by us to our executive officers:

employees in areas involving multi-family property acquisitions, property management and capital raising. David W. Kalish, Senior Vice President, Finance and Mark H. Lundy, Senior Vice President and General Counsel, are the only named executive officers who fit into this category;

Say-on-Pay

In reviewing our compensation practices and determinations and in approving base salaries for calendar 2014, the compensation committee was aware of the results of our March 2011 “say- on-pay” vote in which approximately 96% of the shares that voted on such proposal voted to approve our executive compensation practices. In approving the bonuses paid for services rendered in 2014, the compensation committee was aware of the results of our March 2014 “say-on-pay” vote in which approximately 99% of the shares that voted on such proposal voted to approve our executive compensation determination and practices. The committee viewed such results as generally supportive of our compensation practices and determinations.

Objectives of our Executive Compensation Program

A principal objective of our compensation program for full-time officers is to ensure that the total compensation paid to them is fair and competitive. The compensation committee believes that relying on this principle permits us to retain and motivate these officers.

With respect to senior executive officers whose compensation is allocated to us under the shared services agreement (i.e., part-time officers), it is our objective that the compensation which is allocated to us with respect to each of these officers is reasonable for the services they perform on our behalf, and that those executives provide us with sufficient time and attention to meet our needs and to perform their duties on our behalf. The compensation committee believes that:

Compensation Setting Process

Since we have only seven full-time employees, we determine compensation for our full-time employees, including our executive officers, on a case- by-case basis and our compensation decisions are subjective. We have not to date used specific performance targets though it is anticipated that performance goals will be established in connection with the grant in the future of performance based awards to our senior executives.

Full-Time Officers

For our full-time executive officers, other than the president and chief executive officer, the recommendations of our president and chief executive officer plays a significant role in the compensation-setting process, since the president and chief executive officer is aware of each executive officer’s duties and

responsibilities and is most qualified to assess the level of each officer’s performance in carrying out his duties and responsibilities. The president and chief executive officer, prior to making recommendations to the compensation committee concerning each executive officer’s compensation, consults with other senior executive officers. During this process, the compensation committee considers our overall performance for the preceding year including, without limitation, the progress of our business in general, our multi-family property acquisition activities, progress made at the Teachers Village project, our revenues, results of operations and the management of our real estate and loan portfolios. Since executive officers have different responsibilities, no performance criteria is given more weight than any other. In considering base compensation, the president and chief executive officer, chairman of the board and other senior executive officers assess an individual’s performance, which assessment is highly subjective. After this process, the president and chief executive officer proposes to the compensation committee with respect to each full-time executive officer, a base salary for the next year, a cash bonus applicable to the preceding year (which is paid in the following calendar year), and the number of shares of restricted stock to be awarded to each individual executive officer. At its annual compensation committee meeting, the compensation committee reviews these recommendations. The compensation committee has discretion to accept, reject or modify the recommendations. The final decision by the compensation committee on compensation matters related to executive officers is reported to the board of trustees, which can approve or modify the action of the committee.

With respect to our president and chief executive officer, after the compensation committee has considered our overall performance for the preceding year, the chairman of the committee meets with the president and chief executive officer to discuss and review his total compensation, including the compensation he receives from our advisor and from the other parties to the shared services agreement. The compensation committee then determines annual base compensation, and bonus, if any, for the president and chief executive officer and reports its determinations to the board of trustees. The number of shares of restricted stock to be awarded to the president and chief executive officer is considered and determined by the committee annually, at the same time the committee considers and approves all restricted stock awards to be made for that year.

Part-Time Officers

Fredric H. Gould, the former Chairman of our Board, is an executive and/or sole owner of each private entity which participates with us in the shared services agreement. In such capacity, he, in consultation with our president and chief executive officer and others, determines the annual base compensation of our part-time executive officers to be paid in the aggregate by one or more of the entities which are parties to the shared services agreement and the profit participation, if any, of part-time executive officers in the earnings of the private entities which are parties to the shared services agreement. The annual base compensation, bonus, if any, pension contribution, and perquisites of certain of our part-time executive officers is allocated to us and other parties to the shared services agreement, pursuant to the shared services agreement. Our audit committee reviews the allocations made under the shared services agreement to determine that the allocations have been made in accordance with the terms of the shared services agreement.

The compensation committee is apprised of the compensation paid to our advisor. Since the compensation we pay the advisor is pursuant to an agreement approved by our board of trustees, the compensation committee does not approve such compensation. In addition, our compensation committee is apprised of the compensation paid by our advisor and other affiliates to each of our part-time executive officers.

Components of Executive Compensation

The principal elements of our compensation program for executive officers in 2014 were:

In determining 2014 compensation, the compensation committee did not have a specific allocation goal between cash and equity-based compensation.

Base Salary

Full-Time Executive Officers

Base salary is the basic, least variable form of compensation for the job an executive officer performs and provides each full-time executive officer with a guaranteed annual income. Base salaries of executive officers compensated by us directly are generally targeted to be competitive with the salaries paid to executives performing substantially similar functions at other REITs with a market capitalization similar to ours, taking into consideration the region in which our executive officers are located. Any increase in base salary is determined on a case by case basis, is not based upon a structured formula and is based upon, among other considerations, (i) such executive’s current base salary, (ii) the recommendation of the president and chief executive officer and other senior executive officers, (iii) our performance in the preceding year (e.g., acquisitions, revenues, net income, funds from operations, adjusted funds from operations and share price performance), (iv) the individual’s performance, (v) years of service, and (vi) job responsibilities.

Part-Time Executive Officers

In setting the annual base salary for these officers, Fredric H. Gould, and others with whom he consults in determining annual base salary, consider the executive’s responsibilities to all parties to the shared services agreement, the executive’s performance, years of service, current annual base salary and the performance of the companies which participate in the shared services agreement. The annual base salary is allocated to the entities which are parties to the shared services agreement, including us, based on the estimated time devoted to each of the entities.

Commissions

While we were engaged in the real estate lending business, we provided the opportunity for some of our full-time executive officers involved in such activities to earn a commission on each loan originated. The commission was provided to incentivize our executives engaged in loan origination activities. The commission, which in 2014 and 2013 was an aggregate of 12-basis points of the loans originated, was divided among some of our full-time executive officers and employees engaged in those activities. Fifty percent of the commission was paid at the time the loan was originated and the balance at loan payoff. As we are no longer engaged in real estate lending, no commissions will be paid by us in the future.

Bonus

We provide the opportunity for our full-time executive officers and other full-time employees to earn an annual cash bonus. We provide this opportunity both to reward our officers and employees for past performance and to motivate and retain talented people. We recognize that annual bonuses are almost universally provided by other companies with which we might compete for talent. Annual cash bonuses for our executive officers (including the three named executive officers who devote substantially all of their business time to our affairs) are determined on a case-by-case basis and are determined subjectively. In determining annual cash bonuses, consideration is given to both an executive’s performance and to our overall performance in the applicable year. Once our compensation committee has approved the annual bonus to be paid to each executive officer, the compensation committee presents its recommendations to the board of trustees for approval. Based on our present structure and our small number of full-time executive officers, our compensation committee has not established formulas or performance goals to determine cash bonuses for our executive officers.

Long-Term Equity Awards

We provide the opportunity for our executive officers to receive long-term equity incentive awards. Our long-term equity incentive compensation program is designed to recognize responsibilities, reward performance, motivate future performance, align the interests of our executive officers with our shareholders’ and retain our executive officers. The compensation committee reviews annually management’s recommendations for long-term equity awards for all our officers, trustees and employees and makes recommendations to our board of trustees

for the grant of equity awards. In determining the long- term equity compensation component, the compensation committee considers the factors it considers relevant, including our performance and individual performance. Existing ownership levels are not a factor in award determinations.

We do not have a formal policy with respect to whether equity compensation should be paid in the form of stock options or restricted stock. For approximately the past nine years, we have awarded only restricted stock. The compensation committee believes restricted stock awards are more effective in achieving our compensation objectives, as restricted stock has a greater retention value. In addition, because fewer shares are normally awarded, it is potentially less dilutive. Executive officers realize value upon the vesting of the restricted stock, with the value potentially increasing if our stock performance increases.

All the outstanding restricted stock awards provide for five-year “cliff” vesting. The compensation committee believes that restricted stock awards with five-year “cliff” vesting provide a strong retention incentive for executives, and aligns the interests of our executive officers with our shareholders. We view our capital stock as a valuable asset that should be awarded judiciously. For that reason, it has been our policy that the aggregate restricted stock awards granted each year to our executive officers, employees, trustees and consultants should not exceed approximately 1% of our issued and outstanding common shares.

We do not have a formal policy on timing equity compensation grants in connection with the release of material non-public information. Generally, equity awards are granted in January of each year. In January 2015, we awarded 142,950 shares of restricted stock (including an aggregate of 22,750 shares awarded to non-management trustees and an aggregate of 55,750 shares to our named executive officers). The aggregate restricted stock authorized for awards by us on such date represents approximately 1.1% of our issued and outstanding shares.

Our compensation committee retained FPL Associates to assist with implementing a new performance-based long-term incentive program which takes into account our transformation from a real estate lender to an owner, operator and developer of multi-family properties. Although the new program has not yet been finalized, it is currently contemplated that it will contain a multi-year performance period, that is likely to be in excess of three years, with one or more interim measurement periods during the performance period. The performance measures may consist of metrics relating to funds from operations, adjusted funds from operations, total shareholder return and the achievement of objectives relating to our multi-family property activities. We contemplate that performance based awards will be granted in 2015. The maximum number of shares with respect to which any participant may be granted performance based awards in any calendar year is 60,000 shares.

Executive Benefits and Perquisites

We provide our executive officers and our employees with a competitive benefits and perquisites program. For 2014, the executive benefits and perquisites we provided to executive officers accounted for a small percentage of the compensation provided by, or allocated to, us for our executive officers. The executive benefits and perquisites we provided to certain of our full-time executive officers, in addition to the benefits and perquisites we provided to all our full-time employees, consisted of automobile allowances (including payments for automobile maintenance and repairs), the payment of certain educational expenses and the payment of premiums for additional disability insurance and/or long-term care insurance. The cost of the executive benefits and perquisites provided to our part-time executive officers, which benefits are similar to those provided to our full-time executive officers, was allocated among us and other entities pursuant to the shared services agreement.

Employment and Severance Agreements; Post-Employment Benefits; Change of Control

None of our named executive officers has employment or severance agreements with us. They are “at will” employees who serve at the pleasure of our board of trustees.

We do not provide for any post-employment benefits to our named executive officers other than their right to the vested portion of the defined contribution plan in which they participate and accelerated vesting of our restricted stock awards.

Generally, in the event of death, disability (i.e., the inability to engage in gainful activity due to a life threatening or long lasting mental or physical impairment), retirement (having reached the age of 65 and worked for us for at least ten consecutive years) or a change of control (as described below), such person’s shares of restricted stock vest fully. Subject to the specific terms and conditions of the applicable plan and award

agreement, a change of control is generally deemed to occur if (i) any person, with specified exceptions, becomes the “beneficial owner” of securities representing 20% or more of the combined voting power of our then outstanding securities, (ii) a business combination or sale of all or substantially all of our assets is completed or (iii) there is a change in the composition of a majority of our board of trustees, other than changes approved by incumbent trustees.

We provide for accelerated vesting upon a change in control (on a single trigger basis) because, depending on the structure of the transaction, continuing such awards may unnecessarily complicate a potentially beneficial transaction. Among other things, it may not be possible to replace these awards with comparable awards of the acquiring company’s stock and it would not be fair to our executives to lose the benefit of these awards. In addition, the acceleration of vesting aligns the interests of executives in a potential change in control transaction with those of our shareholders, by motivating them to work towards the completion of the transaction.

Chairman of the Board’s Compensation

We pay our chairman of the board an annual fee of $200,000, payable in quarterly installments. Our chairman does not receive any additional direct compensation from us, other than any long-term equity awards granted to him by our board of trustees based upon our compensation committee’s recommendation. Our chairman may also receive compensation from our advisor and its affiliates. For additional information regarding payments to our chairman, see “Certain Relationships and Related Transactions.”

Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code of 1986, as amended, imposes a limitation on the deductibility of certain compensation in excess of $1 million earned by each of the chief executive officer and the four other most highly compensated officers of publicly held companies. In 2014, all compensation paid to our full-time executives is deductible by us. The compensation committee generally intends to preserve the deductibility of compensation payments and benefits to the extent reasonably practicable but has not adopted a formal policy that requires all such compensation to be fully deductible.

Analysis

Base Salary and Bonus

Full-Time Executive Officers

In accordance with the compensation setting process described above, base salary and cash bonuses for 2014 were approved as follows for the named executive officers compensated directly by us:

In setting Jeffrey A. Gould’s base salary for 2014, the compensation committee took into account our profitability in 2013 and that his base salary for 2014 represented a 6.5% increase from his 2013 base salary. In determining his 2014 bonus, the compensation committee considered Mr. Gould’s efforts with respect to our multi-family property activities (particularly, our acquisition of 13 properties with an aggregate of 3,824 units for an aggregate purchase price of approximately $205 million) and the activities of the Newark Joint Venture (in

particular, its construction of two buildings at the Teachers Village site and the successful $30.2 million debt and New Markets Tax Credit financing transaction)). The increases in 2014 base salary for Messrs. Mitchell Gould (excluding the impact of the $52,160 decrease in commissions he earned on loan originations) and George Zweier are attributable to our profitability in 2013 and their individual performances. Mitchell Gould’s 2014 bonus was based on his performance and his efforts with respect to our multi-family property activities. George Zweier’s 2014 bonus was based on his individual performance and his increased responsibilities with respect to financial and accounting matters relating to our multi-family property acquisitions and the Newark Joint Venture.

The base salary and bonus of Jeffrey A. Gould, our President and Chief Executive Officer, in 2014 was equal to 1.4x Mitchell Gould’s base salary and bonus and 2.1x George Zweier’s base salary and bonus. We have not adopted a policy with regard to the relationship of compensation among named executive officers or other employees. The compensation committee was aware of the differential in compensation among these executive officers and concluded that the differential was appropriate because, among other things, both Mitchell Gould and George Zweier have responsibilities primarily related to a specific activity, whereas Jeffrey A. Gould’s responsibilities cover all our business activities including, among other things, sourcing, negotiating and finalizing property acquisitions, negotiating joint venture agreements, property sales, capital raising and investor relations.

Part-Time Executive Officers

Mark H. Lundy serves as our Senior Vice President. His responsibilities include legal matters relating to multi-family property transactions, joint ventures (and in particular, our Newark Joint Venture), litigation and agreements entered into by us. In addition, he reviews, as necessary, our filings under the Securities Exchange Act of 1934, as amended, and our public disclosures. David W. Kalish serves as our senior vice president, finance. He has overall responsibility for implementation and enforcement of our internal controls, performs oversight and guidance in connection with our annual audit and our quarterly reports, performs oversight and guidance related to tax matters, is involved in banking relationships, chairs our disclosure controls and procedures committee and participates in the preparation and review of our disclosures under the Securities Exchange Act of 1934, as amended, and press releases. The compensation committee determined that based on the value of such person’s services on our behalf, the compensation of Messrs. Lundy and Kalish, which is allocated to us, was reasonable.

Long-Term Equity Awards

We believe that our long-term equity compensation program, using restricted stock awards with five-year cliff vesting provides motivation for our executives and employees and is a beneficial retention tool. We are mindful of the potential dilution and compensation cost associated with awarding shares of restricted stock. Our policy remains to limit dilution and compensation costs. In January 2015 and 2014 we issued 142,950 and 140,100 restricted share awards, respectively, representing approximately 1.1% and 0.99% of our outstanding shares, respectively. In the past five fiscal years, we have awarded an average of 139,275 shares each year, representing an average of 0.99 % per annum of our outstanding shares.

Advisor Fees

We and our advisor, REIT Management Corp., are parties to an amended and restated advisory agreement, as amended, pursuant to which our advisor performs the services described under “Executive Compensation—Compensation Discussion and Analysis—General” and for which we paid the advisor the fees described below. Our advisor in turn compensates certain of our executive officers. See “Certain Relationships and Related Transactions.” Fredric H. Gould, the former Chairman of our Board, is the sole shareholder of our advisor.

Pursuant to this agreement, we pay our advisor the following annual fees, which are paid on a quarterly basis:

The agreement contemplates that in certain cases, we may own real estate assets or hold loans with another person or entity (a “co-venturer”) pursuant to a joint venture, participation or other form of joint ownership arrangement. With respect to real estate assets held by us and a co- venturer, the agreement provides for the payment of the following fees:

With respect to loans held by us and a co-venturer, the agreement provides for the payment of the following fees:

The agreement further provides: (i) that the minimum and maximum fees payable in a fiscal year to our advisor is $750,000 and $4 million, respectively, subject to adjustment for any fiscal year of less than twelve months; and (ii) renews automatically on July 1^st of each year, provided that either party may terminate the agreement for any reason whatsoever effective as of the last day of any quarter if notice is given at least 75 days prior to the end of such quarter.

Since the fee paid by us to the advisor under the advisory agreement is based on an agreement which was approved by our board of trustees, the compensation committee does not review the fee nor the determinations made by Fredric H. Gould as to the payment of compensation by the advisor to any of our senior executive officers.

Three of our named executive officers (Jeffrey A. Gould, David W. Kalish and Mark H. Lundy) receive compensation from our advisor. The compensation committee is advised of such payments. The compensation committee has determined that if the compensation paid by us to our executive officers is reasonable, then the amounts paid to them by the advisor should not be considered as a factor in the determination of compensation relating to such executive’s performance for us as long as these persons are satisfactorily performing their duties on our behalf. The compensation committee has determined that all persons who receive compensation from us and also from our advisor satisfactorily performed their duties on our behalf.

Stock Ownership Policy

In view of the fact that our executive officers and trustees beneficially own in the aggregate 40.6% of our common shares, we do not have nor do we believe there is a need to adopt a policy regarding ownership of our shares by executive officers and trustees since their extensive ownership interest aligns their interest with the interests of our shareholders.

Perquisites

The perquisites we provide to our executive officers, which are in addition to the benefits we provide to all our employees, account for a small percentage of the compensation paid by us to or allocated to us for our executive officers. We believe that such perquisites are competitive and appropriate.

Post-Employment Benefits Program

The following table sets forth the value (based on the closing price of our stock on September 30, 2014 of $7.50 per share) and the number of shares subject to restricted stock awards held by our named executive officers that would vest upon death, disability or a change in control as of September 30, 2014:

Summary Compensation Table

The following summary compensation table discloses the compensation paid and accrued for services rendered in all capacities to us during the years indicated for our named executive officers:

Grants of Plan-Based Awards

The following table discloses the grants of plan-based awards during 2014 to our named executive officers:

Outstanding Equity Awards at Fiscal Year-End

The following table discloses the outstanding equity awards at September 30, 2014 for our named executive officers:

Option Exercises and Stock Vested

The following table discloses stock vested during 2014 for our named executive officers:

COMPENSATION COMMITTEE REPORT

We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussions with management, we recommended to the Board of Trustees that the Compensation Discussion and Analysis be included in this proxy statement.

The Compensation Committee

Jeffrey Rubin (Chairman)
Alan Ginsburg
Jonathan H. Simon

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Introduction

Fredric H. Gould, a trustee and former chairman of our board of trustees, is vice chairman of the board of directors of One Liberty Properties, Inc. a real estate investment trust listed on the New York Stock Exchange that is engaged in the ownership of a diversified portfolio of income-producing real properties that are net leased to tenants, generally under long-term leases. He is also a director and sole stockholder of the managing general partner of Gould Investors, and through December 31, 2014, was a member of a limited liability company which is the other general partner of Gould Investors. Gould Investors, a limited partnership that owns and operates a diversified portfolio of real estate and invests in other companies active in the real estate and finance industries, owns approximately 20.4% of our outstanding common shares. In addition, Mr. Gould is an officer and sole shareholder of REIT Management, our advisor.

Israel Rosenzweig, Chairman of our Board of Trustees, is a Senior Vice President of One Liberty Properties and a Senior Vice President of the managing general partner of Gould Investors. Jeffrey A. Gould, a Trustee and our President and Chief Executive Officer, is a Senior Vice President and a Director of One Liberty Properties, a Senior Vice President and Director of the managing general partner of Gould Investors and, commencing January 1, 2015, a member of a limited liability company which is the other general partner of Gould Investors. Matthew J. Gould, a Trustee and Senior Vice President, is the Chairman of the Board of Directors of One Liberty Properties, Chairman of the Board of the managing general partner of Gould Investors and, commencing January 1, 2015, serves as trustee of a trust that is a member of a limited liability company which is the other general partner of Gould Investors. He is also an executive officer of REIT Management and of Majestic Property Management Corp. In addition, David W. Kalish, Isaac Kalish, Simeon Brinberg and Mark H. Lundy, each of whom is an executive officer of our company, are executive officers of One Liberty Properties and of the corporate managing general partner of Gould Investors. Messrs. D. Kalish and Lundy are also officers of Majestic Property Management.

Related Party Transactions

We and certain related entities, including Gould Investors, One Liberty Properties, Inc., Majestic Property Management and REIT Management, occupy common office space and share certain services and personnel in common. In 2014, we reimbursed Gould Investors L.P. $474,000 for common general and administrative expenses, including telecommunication services, computer services, bookkeeping, secretarial and other clerical services and legal and accounting services. This sum includes amounts allocated to us for services performed by certain executive officers who are engaged by us on a part-time basis, including the amounts allocated for the salary and benefits of David W. Kalish and Mark H. Lundy as set forth in the “Summary Compensation Table” and $93,326, and $67,312 allocated for the salary of Simeon Brinberg, and Isaac Kalish, respectively. The allocation of general and administrative expenses is computed in accordance with a shared services agreement, and is based on the estimated time devoted by executive, administrative and clerical personnel to the affairs of each participating entity to the shared services agreement. The amount of general and administrative expenses allocated to us represents approximately 24% of the total expenses allocated to all entities which are parties to the shared services agreement. In addition, we also lease from a subsidiary of Gould Investors, 4,300 square feet of office space at an annual rental of $149,000 (including real estate tax increases) which is a competitive rent for comparable office space in the area in which the building is located.

In 2014, pursuant to the Advisory Agreement between us and REIT Management, a company wholly-owned by Fredric H. Gould, we paid REIT Management fees of $2,016,000. See “Executive Compensation— Compensation Disclosure and Analysis—Advisor Fees.” The total compensation received in 2014 from REIT Management by Messrs. Fredric H. Gould and Matthew J. Gould, each an executive officer of REIT Management, is $174,468 and $466,742, respectively. The compensation received in 2014 by Jeffrey A. Gould, David W. Kalish and Mark H. Lundy from REIT Management is set forth in the Summary Compensation Table and the notes thereto. Simeon Brinberg, Israel Rosenzweig and Isaac Kalish received compensation from REIT Management in 2014 of $19,934, $38,128 and $39,152, respectively.

Majestic Property Management, which is wholly-owned by Fredric H. Gould, provides real property management services and construction supervisory fees, real estate brokerage, mortgage brokerage and construction supervision services for affiliated entities, as well as companies that are non-affiliated entities. In

2014, we paid Majestic Property Management fees totaling $28,000, representing, in the aggregate, less than 0.5% of the 2014 revenues of Majestic Property. Each of Fredric H. Gould, Jeffrey A. Gould, Matthew J. Gould, David W. Kalish, Simeon Brinberg, Mark H. Lundy, Israel Rosenzweig and Isaac Kalish, received compensation from Majestic Property, which compensation is not included in the Summary Compensation Table. The fees paid by us to REIT Management and Majestic Property Management and the expenses reimbursed to Gould Investors under the shared services agreement were reviewed by our audit committee. The fees paid to REIT Management were paid pursuant to the advisory agreement. The expenses reimbursed to Gould Investors are reimbursed pursuant to the shared services agreement. The fees to Majestic Property Management are based on fees which would have been charged by unaffiliated persons for comparable services. Simeon Brinberg, Fredric H. Gould, Jeffrey A. Gould, Matthew J. Gould, David W. Kalish, Mark H. Lundy, Israel Rosenzweig and Isaac Kalish also receive compensation from other entities wholly-owned by Fredric H. Gould and parties to the shared services agreement, none of which provided services to us or received compensation from us in 2014.

Policies and Procedures

Our code of business conduct and ethics provides in the “Conflicts of Interest” section that our board of trustees is aware of certain transactions between us and affiliated entities, including the sharing of services pursuant to the terms of a shared services agreement and the provision of services by affiliated entities to us. The provision states that the board has determined that the services provided by affiliated entities to us are beneficial and that we may enter into a contract or transaction with an affiliated entity provided that any such transaction is approved by the audit committee which is satisfied that the fees, charges and other payments made to the affiliated entities are at no greater cost or expense to us then would be incurred if we were to obtain substantially the same services from unrelated and unaffiliated entities. The term “affiliated entities” is defined in the code of business conduct and ethics as all parties to the shared services agreement and other entities in which our officers and trustees have an interest.

Our audit committee is advised of related party transactions which occurred in the prior quarter at each quarterly meeting, reviews the transactions and, except to the extent such transaction is effectuated pursuant to an agreement previously approved by such committee, either approves/ratifies or disapproves the transactions. If a transaction relates to a member of our audit committee, such member does not participate in the audit committee’s deliberations. Our audit committee reports our related party transactions to our board of trustees on at least an annual basis.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers, trustees and persons who beneficially own more than 10% of our common shares to file Initial Reports of Ownership and Reports of Changes in Ownership with the SEC. Executive officers, trustees and greater than 10% beneficial owners are required by the rules and regulations promulgated pursuant to the Securities Exchange Act of 1934, as amended, to furnish us with copies of all Section 16(a) forms they file.

Based, among other things, on our review of copies of these reports filed with the SEC, we believe that none of our trustees, executive officers and greater than 10% beneficial owners have failed to file on a timely basis reports required by Section 16(a) during 2014.

OTHER MATTERS

As of the date of this proxy statement, we do not know of any matter other than those stated in this proxy statement which are to be presented at the annual meeting of shareholders. If any other matter should properly come before the meeting, the persons named in the proxy card will vote the common shares represented by it in accordance with their best judgment. Discretionary authority to vote on other matters is included in the proxy.

	By order of the Board of Trustees
	S. Asher Gaffney, Secretary