One Liberty Properties Reports Third Quarter 2024 Results

— Closes on Previously Announced Purchase of Industrial Property For $33.0 Million,, Completes Sales and Secures Sales Agreements for Six Properties for an Estimated Gain of Approximately $9 Million,

GREAT NECK, N.Y., Nov. 05, 2024 (GLOBE NEWSWIRE) -- One Liberty Properties, Inc. (NYSE:OLP), a real estate investment trust focused on net leased industrial properties, today announced operating results for the quarter ended September 30, 2024.

"We continue to evolve the portfolio towards industrial assets, with approximately 70% of our base rent being derived from this property sector. Our recent $33 million purchase of an industrial property further strengthens our industrial platform and provides greater stability of cashflow over the longer term," stated Patrick J. Callan, Jr., President and Chief Executive. Officer of One Liberty. "While our current results were pressured relative to the prior year, we believe that our efforts to further expand our industrial portfolio will result in a stronger company in the coming years."

Operating Results: Third Quarter Ended September 30, 2024

Rental income was $22.2 million compared to $22.5 million in the third quarter of 2023. The change was due primarily to the net impact of acquisitions and dispositions. Total operating expenses were flat year-over-year at $14.3 million.

Net income attributable to One Liberty in the third quarter of 2024 was $5.2 million, or $0.23 per diluted share, compared to $2.7 million, or $0.12 per diluted share, in same quarter of 2023. Net income in 2024 improved primarily due to a $2.1 million, or $0.10 per share, gain on the sale of three properties, and the inclusion, in 2023, of an $850,000, or $0.04 per share, impairment charge related to the Manahawkin, New Jersey retail shopping center that was sold in December 2023.

Funds from Operations, or FFO1, was $9.2 million, or $0.43 per diluted share, for the third quarter of 2024, compared to $9.7 million, or $0.45 diluted share, in the same quarter of 2023. The change is due to a reduction in rental income and increases in real estate operating and interest expense, offset by an increase in interest income.

Adjusted Funds from Operations, or AFFO, was $9.9 million, or $0.46 per diluted share for the quarter compared to $10.5 million, or $0.49 per diluted share, in 2023. The change is due primarily to the factors contributing to the change in FFO.

Diluted per share net income, FFO and AFFO were impacted negatively in the quarter ended September 30, 2024 compared to the corresponding quarter in the prior year by an average increase of approximately 140,000 in the weighted average number of shares of common stock outstanding as a result of stock issuances in connection with the equity incentive and dividend reinvestment programs.

_________________________________1 A reconciliation of GAAP amounts to non-GAAP amounts (i.e., FFO and AFFO) is presented with the financial information included in this release.

Balance Sheet:

The Company had $25.7 million of cash and cash equivalents, total assets of $768.8 million, total debt of $426.1 million, and total stockholders' equity of $304.2 million at quarter end.

At November 1, 2024, One Liberty's available liquidity was approximately $129.8 million, including approximately $29.8 million of cash and cash equivalents (including the credit facility's required $3.0 million average deposit maintenance balance) and $100 million available under its credit facility.

Transactions:

In August 2024, the Company completed the previously announced purchase of a 302,347 square foot, multi-tenant industrial property located in Council Bluffs, Iowa for $33.0 million. In connection with the acquisition, a new mortgage of approximately $18.4 million bearing an interest rate of 6.08% (interest only until 2029) and maturing in 2034 was secured.

The Company sold three properties (a vacant industrial property, a retail property and a vacant fitness center) for net proceeds of $6.9 million and an aggregate gain of $2.1 million during the quarter.

Events Subsequent to September 30, 2024:

On October 15, the Company signed an agreement to sell an LA Fitness property in Secaucus, New Jersey for $21.4 million. It is anticipated that the sale, subject to the buyer's right to terminate, will close by year-end and that the net proceeds, after paying-off the related mortgage of $6.7 million, will be approximately $13 million. The sale is projected to generate a gain of approximately $6.4 million.

On October 24, the Company signed an agreement to sell a retail property in Hilliard, Ohio for $1.6 million. It is anticipated that the sale, subject to the buyer's right to terminate, will close by year-end and that the net proceeds, after paying-off the related mortgage of $771,000 will be approximately $700,000. The sale is projected to generate a gain of approximately $300,000.

On November 4, the Company signed an agreement to sell a multi-tenant retail property in St. Louis Park, Minnesota for $14.2 million. It is anticipated that the sale, subject to the buyer's right to terminate, will close in early 2025 and that the net proceeds will be approximately $14 million. The sale is projected to generate a gain of approximately $300,000.

In November 2024, we terminated the previously announced contract to acquire, for $28.3 million, a second property in Council Bluffs, Iowa, and our deposit was returned. Although we continue to evaluate such acquisition, we can provide no assurance that it will be completed.

Non-GAAP Financial Measures:

One Liberty computes FFO in accordance with the "White Paper on Funds from Operations" issued by the National Association of Real Estate Investment Trusts ("NAREIT") and NAREIT's related guidance. FFO is defined in the White Paper as net income (calculated in accordance with generally accepted accounting principles), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, impairment write-downs of certain real estate assets and investments in entities where the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. In computing FFO, management does not add back to net income the amortization of costs in connection with its financing activities or depreciation of non-real estate assets.

One Liberty computes adjusted funds from operations, or AFFO, by adjusting from FFO for its straight-line rent accruals and amortization of lease intangibles, deducting from income additional rent from ground lease tenant, income on settlement of litigation, income on insurance recoveries from casualties, lease termination and assignment fees, and adding back amortization of restricted stock and restricted stock unit compensation expense, amortization of costs in connection with our financing activities (including its share of its unconsolidated joint ventures), debt prepayment costs and amortization of lease incentives and mortgage intangible assets. Since the NAREIT White Paper does not provide guidelines for computing AFFO, the computation of AFFO may vary from one REIT to another.

One Liberty believes that FFO and AFFO are useful and standard supplemental measures of the operating performance for equity REITs and are used frequently by securities analysts, investors and other interested parties in evaluating equity REITs, many of which present FFO and AFFO when reporting their operating results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate assets, which assumes that the value of real estate assets diminish predictability over time. In fact, real estate values have historically risen and fallen with market conditions. As a result, management believes that FFO and AFFO provide a performance measure that when compared year over year, should reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, interest costs and other matters without the inclusion of depreciation and amortization, providing a perspective that may not be necessarily apparent from net income. Management also considers FFO and AFFO to be useful in evaluating potential property acquisitions.

FFO and AFFO do not represent net income or cash flows from operating, investing or financing activities as defined by GAAP. FFO and AFFO should not be an alternative to net income as a reliable measure of our operating performance nor as an alternative to cash flows as measures of liquidity. FFO and AFFO do not measure whether cash flow is sufficient to fund all of the Company's cash needs.

Forward Looking Statement:

Certain information contained in this press release, together with other statements and information publicly disseminated by One Liberty Properties, Inc. is forward looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. The Company intends such forward looking statements to be covered by the safe harbor provision for forward looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for the purpose of complying with these safe harbor provisions. Forward looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words "may," "will," "could," "believe," "expect," "intend," "anticipate," "estimate," "project," or similar expressions or variations thereof. Information regarding important factors that could cause actual outcomes or other events to differ materially from any such forward looking statements appear in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and the reports filed with the Securities and Exchange Commission thereafter; in particular, the sections of such reports entitled "Cautionary Note Regarding Forward Looking Statements", "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations", included therein. In addition, estimates of rental income for 2024 and thereafter exclude any related variable rent, anticipated property purchases and/or sales may not be completed during the period indicated or at all, estimates of net proceeds and gains from property sales are subject to adjustment, among other things, because actual closing costs (including the amounts, if any, required to pay-off mortgage debt on properties being sold) may differ from the estimated costs, and amounts presented in this press release and the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2024 may differ from one another due to rounding. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company's control and which could materially affect the Company's results of operations, financial condition, cash flows, performance or future achievements or events.

About One Liberty Properties:

One Liberty is a self-administered and self-managed real estate investment trust incorporated in Maryland in 1982. The Company acquires, owns and manages a geographically diversified portfolio consisting primarily of industrial properties. Many of these properties are subject to long-term net leases under which the tenant is typically responsible for the property's real estate taxes, insurance and ordinary maintenance and repairs.

Contact: One Liberty Properties Investor Relations Phone: (516) 466-3100www.1liberty.com

 

 

ONE LIBERTY PROPERTIES, INC.

CONDENSED BALANCE SHEETS

(Amounts in Thousands)

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

September 30, 

 

December 31, 

 

2024

    

2023

ASSETS

 

 

 

 

 

Real estate investments, at cost

$

876,089

 

 

$

864,655

 

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

 

Other assets

 

19,669

 

 

 

19,833

 

Total assets

$

768,846

 

 

$

761,606

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Liabilities:

 

 

 

 

 

Mortgages payable, net

$

426,139

 

 

$

418,347

 

Line of credit, net

 

—

 

 

 

—

 

Unamortized intangible lease liabilities, net

 

12,088

 

 

 

10,096

 

Other liabilities

 

25,299

 

 

 

25,418

 

Total liabilities

 

463,526

 

 

 

453,861

 

 

 

 

 

 

 

Total One Liberty Properties, Inc. stockholders' equity

 

304,177

 

 

 

306,703

 

Non-controlling interests in consolidated joint ventures

 

1,143

 

 

 

1,042

 

Total equity

 

305,320

 

 

 

307,745

 

Total liabilities and equity

$

768,846

 

 

$

761,606

 

 

ONE LIBERTY PROPERTIES, INC. (NYSE:OLP)

(Amounts in Thousands, Except Per Share Data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30, 

 

September 30, 

 

2024

 

2023

 

2024

 

2023

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Rental income, net

$

22,211

 

 

$

22,546

 

 

$

66,457

 

 

$

67,905

 

Lease termination fee

 

—

 

 

 

—

 

 

 

250

 

 

 

—

 

Total revenues

 

22,211

 

 

 

22,546

 

 

 

66,707

 

 

 

67,905

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

6,133

 

 

 

6,310

 

 

 

18,119

 

 

 

18,569

 

Real estate expenses

 

4,231

 

 

 

4,061

 

 

 

12,677

 

 

 

12,139

 

General and administrative

 

3,886

 

 

 

3,864

 

 

 

11,585

 

 

 

12,068

 

Impairment loss

 

—

 

 

 

—

 

 

 

1,086

 

 

 

—

 

State taxes

 

74