One Liberty Properties Posts Strong Q3 Earnings, Driven by Rental Growth

TL;DR

**OLP is buying up properties and selling high, driving strong earnings growth despite rising interest costs – a clear buy signal for long-term REIT investors.**

AI Summary

ONE LIBERTY PROPERTIES INC (OLP) reported a strong financial performance for the nine months ended September 30, 2025, with net income attributable to OLP increasing by 16% to $23.064 million, up from $19.885 million in the prior year. Basic earnings per common share rose to $1.06 from $0.92. Total revenues saw a significant increase of 8.6% to $72.486 million, compared to $66.707 million in the same period of 2024, primarily driven by a 9% rise in rental income to $72.420 million. The company also realized substantial gains on the sale of real estate, net, totaling $16.712 million, a 47.3% increase from $11.347 million in 2024. However, operating expenses increased by 10.8% to $48.361 million, and interest expense rose by 17.3% to $16.896 million. Cash and cash equivalents decreased to $18.800 million as of September 30, 2025, from $42.315 million at December 31, 2024, largely due to significant real estate purchases totaling $112.925 million. The company's real estate investments, net, grew to $715.482 million from $672.305 million, reflecting strategic acquisitions.

Why It Matters

OLP's robust revenue and net income growth, particularly from rental income and strategic property sales, signals a healthy operational environment for the REIT sector. The significant increase in real estate purchases, totaling $112.925 million, indicates an aggressive expansion strategy, which could lead to future revenue growth but also increases capital expenditure. For investors, the consistent cash distributions of $0.45 per share, despite increased interest expenses, demonstrate OLP's commitment to shareholder returns. This performance, especially in a potentially rising interest rate environment, positions OLP competitively against other REITs by showcasing its ability to generate substantial gains from its portfolio management.

Risk Assessment

Risk Level: medium — The company's cash and cash equivalents decreased significantly from $42.315 million to $18.800 million, while mortgages payable, net, increased from $420.555 million to $458.671 million. This indicates increased leverage and reduced liquidity, which could pose a risk if market conditions deteriorate or interest rates continue to rise, making debt servicing more expensive.

Analyst Insight

Investors should consider OLP's strategic acquisitions and strong rental income growth as positive indicators for long-term value. However, they should monitor the increasing debt levels and interest expenses, evaluating OLP's ability to sustain its dividend payout of $0.45 per share amidst these financial shifts. A deeper dive into the specifics of the new property acquisitions and their expected returns is warranted.

Financial Highlights

debt To Equity

1.62

revenue

$72.486M

operating Margin

33.3%

total Assets

$802.305M

total Debt

$458.671M

net Income

$23.064M

eps

$1.06

gross Margin

N/A

cash Position

$18.800M

revenue Growth

+8.6%

Revenue Breakdown

Key Numbers

• $23.064M — Net income attributable to One Liberty Properties, Inc. (Increased by 16% from $19.885 million for the nine months ended September 30, 2024.)
• $1.06 — Basic earnings per common share (Increased from $0.92 for the nine months ended September 30, 2024.)
• $72.486M — Total revenues (Increased by 8.6% from $66.707 million for the nine months ended September 30, 2024.)
• $72.420M — Rental income, net (Increased by 9% from $66.457 million for the nine months ended September 30, 2024.)
• $16.712M — Gain on sale of real estate, net (Increased by 47.3% from $11.347 million for the nine months ended September 30, 2024.)
• $112.925M — Purchase of real estate (Significant increase from $44.877 million for the nine months ended September 30, 2024.)
• $18.800M — Cash and cash equivalents (Decreased from $42.315 million at December 31, 2024.)
• $458.671M — Mortgages payable, net (Increased from $420.555 million at December 31, 2024.)
• $0.45 — Cash distributions per share of common stock (Consistent for both the three and nine months ended September 30, 2025 and 2024.)
• 98 — Number of properties owned (As of September 30, 2025, located in 30 states.)

Key Players & Entities

• ONE LIBERTY PROPERTIES INC (company) — registrant
• OLP (company) — ticker symbol
• New York Stock Exchange (regulator) — exchange where common stock is registered
• Securities and Exchange Commission (regulator) — filing oversight body
• FASB (regulator) — Financial Accounting Standards Board
• Maryland (person) — state of incorporation
• 60 Cutter Mill Road , Great Neck , New York (person) — principal executive offices address

FAQ

Risk Factors

• Increased Debt Levels [medium — financial]: Mortgages payable, net increased by $38.116 million to $458.671 million as of September 30, 2025, from $420.555 million at December 31, 2024. This increase in leverage could heighten financial risk.
• Decreased Cash Position [medium — financial]: Cash and cash equivalents decreased significantly by $23.515 million to $18.800 million as of September 30, 2025, from $42.315 million at December 31, 2024. This reduction is largely attributed to substantial real estate purchases of $112.925 million.
• Operating Expense Growth [medium — operational]: Operating expenses increased by 10.8% to $48.361 million for the nine months ended September 30, 2025. This outpaced revenue growth, potentially impacting profitability if not managed effectively.
• Rising Interest Expense [medium — financial]: Interest expense rose by 17.3% to $16.896 million for the nine months ended September 30, 2025. This increase is likely due to higher debt levels and potentially rising interest rates, impacting net income.
• Real Estate Market Fluctuations [medium — market]: The company's performance is tied to the real estate market. Significant real estate purchases of $112.925 million indicate strategic expansion, but also expose OLP to potential downturns in property values or rental demand.
• Dependence on Rental Income [medium — operational]: The company's primary revenue source is rental income, which grew by 9% to $72.420 million. Any disruption to tenant occupancy or ability to pay rent could significantly impact financial results.

Industry Context

ONE LIBERTY PROPERTIES INC operates within the industrial real estate sector, a segment that has shown resilience and growth, particularly driven by e-commerce and supply chain logistics. The company's strategy of acquiring and managing industrial properties aligns with this trend. The competitive landscape involves numerous REITs and private real estate firms vying for similar assets, making strategic acquisitions and efficient property management crucial for sustained success.

Regulatory Implications

As a REIT, OLP is subject to specific IRS regulations to maintain its tax-advantaged status, including distributing a significant portion of its taxable income to shareholders. Changes in real estate investment regulations or tax laws could impact its operational flexibility and profitability. Compliance with environmental, zoning, and building codes across the 30 states where it operates is also a key regulatory consideration.

What Investors Should Do

1. Monitor operating expense trends relative to revenue growth.
2. Analyze the impact of increased debt on interest coverage ratios.
3. Evaluate the strategy behind significant real estate acquisitions.
4. Assess the sustainability of gains on sale of real estate.

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Reported net income of $23.064 million, a 16% increase year-over-year, driven by strong rental income and significant gains on real estate sales.
• 2025-09-30: As of September 30, 2025 — Company owned 98 properties in 30 states, with real estate investments, net growing to $715.482 million.
• 2025-09-30: Nine months ended September 30, 2025 — Significant real estate purchases totaling $112.925 million, leading to a decrease in cash and cash equivalents.
• 2024-12-31: As of December 31, 2024 — Cash and cash equivalents stood at $42.315 million prior to the significant investment period.

Glossary

REIT

Real Estate Investment Trust. A company that owns, operates, or finances income-generating real estate. (OLP is structured as a REIT, which has specific tax and operational implications.)

Variable Interest Entities (VIEs)

Entities where equity investors do not have sufficient equity at risk to finance activities without additional support, requiring consolidation by the primary beneficiary. (OLP consolidates VIEs where it has the power to control and obligation to absorb losses or receive benefits, impacting its reported assets and liabilities.)

Unconsolidated Joint Ventures

Investments in entities where OLP shares control with partners and accounts for them using the equity method. (OLP's investments in these ventures are recorded at cost and adjusted for equity in earnings, impacting its 'Investment in unconsolidated joint ventures' line item.)

Real estate investments, net

The net book value of properties owned by the company after deducting accumulated depreciation. (This represents the core asset base of OLP, showing growth from $672.305 million to $715.482 million.)

Mortgages payable, net

The outstanding balance of loans secured by the company's real estate properties. (This is a significant component of OLP's liabilities, indicating its use of debt financing for property acquisition and operations.)

Distributions in excess of net income

A contra-equity account reflecting cumulative cash distributions paid to shareholders that exceed cumulative net income. (This account indicates the extent to which OLP has distributed earnings to shareholders, impacting total equity.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, ONE LIBERTY PROPERTIES INC has demonstrated robust revenue growth of 8.6%, reaching $72.486 million, primarily fueled by a 9% increase in rental income. Net income attributable to OLP also saw a significant 16% rise to $23.064 million. However, this growth was accompanied by a substantial increase in real estate purchases ($112.925 million vs. $44.877 million), leading to a considerable decrease in cash and cash equivalents from $42.315 million to $18.800 million. Operating expenses and interest expense also rose, by 10.8% and 17.3% respectively, indicating increased costs associated with expansion and financing.

Filing Documents

• olp-20250930x10q.htm (10-Q) — 3201KB
• olp-20250930xex31d1.htm (EX-31.1) — 11KB
• olp-20250930xex31d2.htm (EX-31.2) — 11KB
• olp-20250930xex32d1.htm (EX-32.1) — 7KB
• olp-20250930xex32d2.htm (EX-32.2) — 8KB
• 0001104659-25-107784.txt ( ) — 12067KB
• olp-20250930.xsd (EX-101.SCH) — 81KB
• olp-20250930_cal.xml (EX-101.CAL) — 79KB
• olp-20250930_def.xml (EX-101.DEF) — 303KB
• olp-20250930_lab.xml (EX-101.LAB) — 651KB
• olp-20250930_pre.xml (EX-101.PRE) — 464KB
• olp-20250930x10q_htm.xml (XML) — 2338KB

— Financial Information

Part I — Financial Information Item 1. Unaudited Consolidated Financial Statements Consolidated Balance Sheets — September 30, 2025 and December 31, 2024 1 Consolidated Statements of Income — Three and nine months ended September 30, 2025 and 2024 2 Consolidated Statements of Comprehensive Income — Three and nine months ended September 30, 2025 and 2024 3 Consolidated Statements of Changes in Equity — Three and nine months ended September 30, 2025 and 2024 4 Consolidated Statements of Cash Flows — Nine months ended September 30, 2025 and 2024 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 40 Item 4.

Controls and Procedures

Controls and Procedures 40

— Other Information

Part II — Other Information 41 Item 1.

Legal Proceedings

Legal Proceedings 41 Item 5 . Other Information 41 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, 2025 2024 ASSETS (Unaudited) Real estate investments, at cost Land $ 144,984 $ 165,708 Buildings and improvements 764,308 695,044 Total real estate investments, at cost 909,292 860,752 Less accumulated depreciation 193,810 188,447 Real estate investments, net 715,482 672,305 Properties held-for-sale 17,229 — Investment in unconsolidated joint ventures 203 2,101 Cash and cash equivalents 18,800 42,315 Unbilled rent receivable 16,861 16,988 Unamortized intangible lease assets, net 19,520 13,649 Escrow, deposits and other assets and receivables 14,210 19,596 Total assets (1) $ 802,305 $ 766,954 LIABILITIES AND EQUITY Liabilities: Mortgages payable, net (see Note 8) $ 458,671 $ 420,555 Line of credit — — Dividends payable 10,126 10,049 Accrued expenses and other liabilities 15,893 16,023 Unamortized intangible lease liabilities, net 11,843 11,752 Total liabilities (1) 496,533 458,379 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; 20,898 and 20,698 shares issued and outstanding 20,898 20,698 Paid-in capital 339,935 335,539 Accumulated other comprehensive income 45 208 Distributions in excess of net income ( 55,302 ) ( 49,020 ) Total One Liberty Properties, Inc. stockholders' equity 305,576 307,425 Non-controlling interests in consolidated joint ventures (1) 196 1,150 Total equity 305,772 308,575 Total liabilities and equity $ 802,305 $ 766,954 (1) The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 2025 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 portfolio consisting primarily of industrial properties. As of September 30, 2025, OLP owns 98 properties, including one property owned by a consolidated joint venture. The 98 properties are located in 30 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, 2025 and 2024 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, 2024. 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-owned subsidiaries, its joint venture in which the Company, as defined, has a controlling interest, and variable interest entities ("VIEs") of which the Company is the primar

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) SEPTEMBER 30, 2025 (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, 2025 (CONTINUED) NOTE 3 – LEASES Lessor Accounting The Company owns rental properties which are leased to tenants under operating leases with current expirations ranging from 2025 to 2046, 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, 2025 2024 2025 2024 Fixed lease revenues $ 19,555 $ 18,638 $ 59,177 $ 55,230 Variable lease revenues 3,984 3,298 12,482 10,287 Lease revenues (a) $ 23,539 $ 21,936 $ 71,659 $ 65,517 (a) Excludes amortization related to lease intangible assets and liabilities of $ 232 and $ 761 for the three and nine months ended September 30, 2025, respectively, and $ 275 and $ 940 for the three and nine months ended

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