One Liberty Properties Q3 2024 Update

TL;DR

OLP Q3 24: Property sales ongoing, focus on REIT operations. #RealEstate

AI Summary

One Liberty Properties Inc. filed its 10-Q for the period ending September 30, 2024. The company reported on its real estate investment trust activities, including details on variable interest entities and property disposals. Notably, the company was involved with the Walgreens Retail Property in Cape Girardeau, Missouri, and the Hacienda Colorado Restaurant Parcel in Lakewood, Colorado, both of which were disposed of by sale not discontinued operations.

Why It Matters

This filing provides insight into the financial health and strategic property management decisions of One Liberty Properties Inc., impacting investors and stakeholders in the real estate sector.

Risk Assessment

Risk Level: medium — The filing details financial performance and property transactions, which carry inherent risks in the real estate market.

Key Numbers

• 20653000 — Variable Interest Entity Two Primary Beneficiary Member (Financial metric related to a specific entity)
• 20323000 — Variable Interest Entity One Primary Beneficiary Member (Financial metric related to a specific entity)

Key Players & Entities

• ONE LIBERTY PROPERTIES INC (company) — Filer
• 20240930 (date) — Period of Report
• 20241106 (date) — Filing Date
• Walgreens Retail Property in Cape Girardeau, Missouri (company) — Property associated with Variable Interest Entity Two
• Hacienda Colorado Restaurant Parcel in Lakewood, Colorado (company) — Property associated with Variable Interest Entity One

FAQ

Filing Documents

• olp-20240930x10q.htm (10-Q) — 3240KB
• olp-20240930xex31d1.htm (EX-31.1) — 12KB
• olp-20240930xex31d2.htm (EX-31.2) — 11KB
• olp-20240930xex32d1.htm (EX-32.1) — 7KB
• olp-20240930xex32d2.htm (EX-32.2) — 9KB
• 0001558370-24-014590.txt ( ) — 12147KB
• olp-20240930.xsd (EX-101.SCH) — 80KB
• olp-20240930_cal.xml (EX-101.CAL) — 79KB
• olp-20240930_def.xml (EX-101.DEF) — 309KB
• olp-20240930_lab.xml (EX-101.LAB) — 639KB
• olp-20240930_pre.xml (EX-101.PRE) — 477KB
• olp-20240930x10q_htm.xml (XML) — 2395KB

— Financial Information

Part I — Financial Information Item 1. Unaudited Consolidated Financial Statements Consolidated Balance Sheets — September 30, 2024 and December 31, 2023 1 Consolidated Statements of Income — Three and nine months ended September 30, 2024 and 2023 2 Consolidated Statements of Comprehensive Income — Three and nine months ended September 30, 2024 and 2023 3 Consolidated Statements of Changes in Equity — Three and nine months ended September 30, 2024 and 2023 4 Consolidated Statements of Cash Flows — Nine months ended September 30, 2024 and 2023 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 26 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 41 Item 4.

Controls and Procedures

Controls and Procedures 41

— Other Information

Part II — Other Information 42 Item 5 . Other Information 42 Item 6. Exhibits 42 Table of Contents

— FINANCIAL INFORMATION

Part I — FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in Thousands, Except Par Value) September 30, December 31, 2024 2023 ASSETS (Unaudited) Real estate investments, at cost Land $ 171,401 $ 172,309 Buildings and improvements 704,688 692,346 Total real estate investments, at cost 876,089 864,655 Less accumulated depreciation 186,709 182,705 Real estate investments, net 689,380 681,950 Investment in unconsolidated joint ventures 2,038 2,051 Cash and cash equivalents 25,684 26,430 Unbilled rent receivable 17,312 16,661 Unamortized intangible lease assets, net 14,763 14,681 Escrow, deposits and other assets and receivables 19,669 19,833 Total assets (1) $ 768,846 $ 761,606 LIABILITIES AND EQUITY Liabilities: Mortgages payable, net (see Note 8) $ 426,139 $ 418,347 Line of credit — — Dividends payable 9,949 9,916 Accrued expenses and other liabilities 15,350 15,502 Unamortized intangible lease liabilities, net 12,088 10,096 Total liabilities (1) 463,526 453,861 Commitments and contingencies Equity: One Liberty Properties, Inc. stockholders' equity: Preferred stock, $ 1 par value; 12,500 shares authorized; none issued — — Common stock, $ 1 par value; 50,000 shares authorized; 20,653 and 20,323 shares issued and outstanding 20,653 20,323 Paid-in capital 333,083 326,379 Accumulated other comprehensive income 271 844 Distributions in excess of net income ( 49,830 ) ( 40,843 ) Total One Liberty Properties, Inc. stockholders' equity 304,177 306,703 Non-controlling interests in consolidated joint ventures (1) 1,143 1,042 Total equity 305,320 307,745 Total liabilities and equity $ 768,846 $ 761,606 (1) The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VI

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 2024 NOTE 1 – ORGANIZATION AND BACKGROUND One Liberty Properties, Inc. ("OLP") was incorporated in 1982 in Maryland. OLP is a self-administered and self-managed real estate investment trust ("REIT"). OLP acquires, owns and manages a geographically diversified portfolio consisting primarily of industrial and, to a lesser extent, retail properties, many of which are subject to long-term net leases. As of September 30, 2024, OLP owns 104 properties, including two properties owned by consolidated joint ventures and two properties owned by unconsolidated joint ventures. The 104 properties are located in 31 states. NOTE 2 – SUMMARY ACCOUNTING POLICIES Principles of Consolidation/Basis of Preparation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by U.S. Generally Accepted Accounting Principles ("GAAP") for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statement disclosures. In the opinion of management, all adjustments of a normal recurring nature necessary for fair presentation have been included. The results of operations for the three and nine months ended September 30, 2024 and 2023 are not necessarily indicative of the results for the full year. These statements should be read in conjunction with the consolidated financial statements and related notes included in OLP's Annual Report on Form 10-K for the year ended December 31, 2023. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The consolidated financial statements include the accounts and operations of OLP, its wholly-own

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 2024 (CONTINUED) NOTE 2 – SUMMARY ACCOUNTING POLICIES (CONTINUED) Investment in Joint Ventures and Variable Interest Entities The Financial Accounting Standards Board, or FASB, provides guidance for determining whether an entity is a VIE. VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A VIE is required to be consolidated by its primary beneficiary, which is the party that (i) has the power to control the activities that most significantly impact the VIE's economic performance and (ii) has the obligation to absorb losses, or the right to receive benefits, of the VIE that could potentially be significant to the VIE. The Company assesses the accounting treatment for each of its investments, including a review of each venture or limited liability company or partnership agreement, to determine the rights of each party and whether those rights are protective or participating. The agreements typically contain certain protective rights, such as the requirement of partner approval to sell, finance or refinance the property and to pay capital expenditures and operating expenditures outside of the approved budget or operating plan. In situations where, among other things, the Company and its partners jointly (i) approve the annual budget, (ii) approve certain expenditures, (iii) prepare or review and approve the joint venture's tax return before filing, or (iv) approve each lease at a property, the Company does not consolidate as the Company considers these to be substantive participation rights that result in shared, joint power over the activities that most significantly impact the performance of the joint venture or property. Additionally, the Company assesses the accounting treatment for an

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 2024 (CONTINUED) NOTE 3 – LEASES Lessor Accounting The Company owns rental properties which are leased to tenants under operating leases with current expirations ranging from 2024 to 2042, with options to extend or terminate the lease. Revenues from such leases are reported as Rental income, net, and are comprised of (i) lease components, which includes fixed and variable lease payments and (ii) non-lease components which includes reimbursements of property level operating expenses. The Company does not separate non-lease components from the related lease components, as the timing and pattern of transfer are the same, and account for the combined component in accordance with ASC 842. Fixed lease revenues represent the base rent that each tenant is required to pay in accordance with the terms of its respective leases, and any lease incentives paid or payable to the lessee, reported on a straight-line basis over the non-cancelable term of the lease. Variable lease revenues typically include payments based on (i) tenant reimbursements, (ii) changes in the index or market-based indices after the inception of the lease, (iii) percentage rents and (iv) the operating performance of the property. Variable lease revenues are not recognized until the specific events that trigger the variable payments have occurred. The components of lease revenues are as follows (amounts in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 Fixed lease revenues $ 18,638 $ 18,872 $ 55,230 $ 57,159 Variable lease revenues 3,298 3,431 10,287 10,048 Lease revenues (a) $ 21,936 $ 22,303 $ 65,517 $ 67,207 (a) Excludes amortization related to lease intangible assets and liabilities of $ 275 and $ 940 for the three and nine months ended September 30, 2024, respectively, and $ 243 and $ 698 for the three and nine months ended

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View this 10-Q filing on SEC EDGAR