[10-Q] ONE LIBERTY PROPERTIES INC Quarterly Earnings Report
One Liberty Properties (OLP) filed its Q3 2025 10‑Q, showing higher rent-driven revenue and sizable gains from property sales. Total revenues were $23.8M for the quarter, up from $22.2M a year ago, as fixed and variable lease revenues increased. Operating income reached $15.9M versus $10.0M, aided by $9.1M in gains on real estate sales and despite higher expenses and a $1.3M impairment. Net income was $11.1M (diluted EPS $0.48) compared with $5.2M (EPS $0.23) last year.
Year to date, revenue totaled $72.5M and operating income $40.8M, with $16.7M of gains from asset sales. The company executed an active capital recycling program: it acquired $112.3M of industrial assets in 2025 through September with partial mortgage financing and later bought a Minnesota industrial property for $23.0M. It sold properties for $49.5M year to date. Cash from operations was $33.1M; cash ended at $18.8M. Mortgages payable, net, were $458.7M; the $100M credit facility had no outstanding balance. The Board declared a $0.45 quarterly dividend.
- None.
- None.
Insights
Stronger rents and sale gains offset higher costs; balance sheet stable.
OLP posted higher rent revenue and margin support from
Year to date, acquisitions of
Outcomes depend on sustained occupancy and rent collections, execution on held-for-sale assets, and interest costs. The declared
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
For the quarterly period ended
OR
Commission File Number
ONE LIBERTY PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
MARYLAND |
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(State or other jurisdiction of | | (I.R.S. employer |
incorporation or organization) | | identification number) |
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(Address of principal executive offices) | | (Zip code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | | Trading Symbol(s) | | Name of each exchange on |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ◻ |
| Accelerated filer ◻ |
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| Smaller reporting company | |
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Emerging growth company | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Yes ◻ No ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of October 31, 2025, the registrant had
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One Liberty Properties, Inc. and Subsidiaries
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Part I — Financial Information | | ||||
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Item 1. | Unaudited Consolidated Financial Statements | | |||
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| Consolidated Balance Sheets — September 30, 2025 and December 31, 2024 | | 1 | ||
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| Consolidated Statements of Income — Three and nine months ended September 30, 2025 and 2024 | | 2 | ||
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| Consolidated Statements of Comprehensive Income — Three and nine months ended September 30, 2025 and 2024 | | 3 | ||
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| Consolidated Statements of Changes in Equity — Three and nine months ended September 30, 2025 and 2024 | | 4 | ||
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| Consolidated Statements of Cash Flows — Nine months ended September 30, 2025 and 2024 | | 6 | ||
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| Notes to Consolidated Financial Statements | | 8 | ||
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 26 | ||
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk | | 40 | ||
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Item 4. | Controls and Procedures | | 40 | ||
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Part II — Other Information | | 41 | |||
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Item 1. | Legal Proceedings | | 41 | ||
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Item 5. | Other Information | | 41 | ||
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Item 6. | Exhibits | | 42 | ||
Table of Contents
Part I — FINANCIAL INFORMATION
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 | | $ | | | $ | |
Buildings and improvements | | | | | | |
Total real estate investments, at cost | | | | | | |
Less accumulated depreciation | | | | | | |
Real estate investments, net | | | | | | |
| | | | | | |
Properties held-for-sale | | | | | | — |
Investment in unconsolidated joint ventures | | | | | | |
Cash and cash equivalents | | | | | | |
Unbilled rent receivable | | | | | | |
Unamortized intangible lease assets, net | | | | | | |
Escrow, deposits and other assets and receivables | | | | | | |
Total assets(1) | | $ | | | $ | |
LIABILITIES AND EQUITY | | | | | | |
Liabilities: | | | | | | |
Mortgages payable, net (see Note 8) | | $ | | | $ | |
Line of credit | | | — | | | — |
Dividends payable | | | | | | |
Accrued expenses and other liabilities | | | | | | |
Unamortized intangible lease liabilities, net | | | | | | |
Total liabilities(1) | | | | | | |
| | | | | | |
Commitments and contingencies | | | | | | |
| | | | | | |
Equity: | | | | | | |
One Liberty Properties, Inc. stockholders’ equity: | | | | | | |
Preferred stock, $ | | | — | | | — |
Common stock, $ | | | | | | |
Paid-in capital | | | | | | |
Accumulated other comprehensive income | | | | | | |
Distributions in excess of net income | | | ( | | | ( |
Total One Liberty Properties, Inc. stockholders’ equity | | | | | | |
Non-controlling interests in consolidated joint ventures(1) | | | | | | |
Total equity | | | | | | |
Total liabilities and equity | | $ | | | $ | |
| (1) |
See accompanying notes to consolidated financial statements.
1
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
| | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Revenues: | | | | | | | | | | | | |
Rental income, net | | $ | | | $ | | | $ | | | $ | |
Lease termination fees | | | — | | | — | | | | | | |
Total revenues | | | | | | | | | | | | |
| | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | |
Depreciation and amortization | | | | | | | | | | | | |
Real estate expenses (see Note 9 for related party information) | | | | | | | | | | | | |
General and administrative (see Note 9 for related party information) | | | | | | | | | | | | |
Impairment loss | | | | | | — | | | | | | |
State tax expense | | | | | | | | | | | | |
Total operating expenses | | | | | | | | | | | | |
| | | | | | | | | | | | |
Other operating income | | | | | | | | | | | | |
Gain on sale of real estate, net | | | | | | | | | | | | |
Operating income | | | | | | | | | | | | |
| | | | | | | | | | | | |
Other income and expenses: | | | | | | | | | | | | |
Equity in earnings (loss) of unconsolidated joint ventures | | | | | | ( | | | | | | |
Equity in earnings from sale of unconsolidated joint venture properties | | | | | | — | | | | | | — |
Other income | | | | | | | | | | | | |
Interest: | | | | | | | | | | | | |
Expense | | | ( | | | ( | | | ( | | | ( |
Amortization and write-off of deferred financing costs | | | ( | | | ( | | | ( | | | ( |
| | | | | | | | | | | | |
Net income | | | | | | | | | | | | |
Net income attributable to non-controlling interests | | | ( | | | ( | | | ( | | | ( |
Net income attributable to One Liberty Properties, Inc. | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Weighted average number of common shares outstanding: | | | | | | | | | | | | |
Basic | | | | | | | | | | | | |
Diluted | | | | | | | | | | | | |
| | | | | | | | | | | | |
Earnings per common share attributable to common stockholders: | | | | | | | | | | | | |
Basic | | $ | | | $ | | | $ | | | $ | |
Diluted | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Cash distributions per share of common stock | | $ | | | $ | | | $ | | | $ | |
See accompanying notes to consolidated financial statements.
2
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in Thousands)
(Unaudited)
| | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Net income | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Other comprehensive income | | | | | | | | | | | | |
Net unrealized loss on derivative instruments | | | ( | | | ( | | | ( | | | ( |
Comprehensive income | | | | | | | | | | | | |
| | | | | | | | | | | | |
Net income attributable to non-controlling interests | | | ( | | | ( | | | ( | | | ( |
Comprehensive income attributable to One Liberty Properties, Inc. | | $ | | | $ | | | $ | | | $ | |
See accompanying notes to consolidated financial statements.
3
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in Thousands, Except Per Share Data)
(Unaudited) (Continued on Next Page)
| | | | | | | | | | | | | | | | | |
| | | | | | | Accumulated | | Accumulated | | Non-Controlling | | | | |||
| | |
| | |
| Other |
| Distributions |
| Interests in |
| | | |||
| Common | | Paid-in | | Comprehensive | | in Excess of | | Consolidated | | | | |||||
| Stock | | Capital | | Income (loss) | | Net Income | | Joint Ventures | | Total | ||||||
Balances, December 31, 2024 | $ | | | $ | | | $ | | | $ | ( | | $ | | | $ | |
Cash distributions — common stock ($ | | — | | | — | | | — | | | ( | | | — | | | ( |
Compensation expense — restricted stock and RSUs | | — | | | | | | — |
| | — |
| | — | | | |
Shares issued through dividend reinvestment plan | | |
| | |
| | — |
| | — |
| | — |
| | |
Restricted stock vesting | | | | | ( |
| | — |
| | — |
| | — |
| | — |
Distributions to non-controlling interests | | — |
| | — |
| | — |
| | — |
| | ( |
| | ( |
Net income | | — |
| | — |
| | — |
| | |
| | |
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Other comprehensive loss | | — |
| | — |
| | ( |
| | — |
| | — |
| | ( |
Balances, March 31, 2025 | | | | | | | | | | | ( | | | | | | |
Cash distributions — common stock ($ | | — |
| | — |
| | — |
| | ( |
| | — |
| | ( |
Compensation expense — restricted stock and RSUs | | — |
| | |
| | — |
| | — |
| | — |
| | |
Shares issued through dividend reinvestment plan | | | | | | | | — |
| | — |
| | — | | | |
Restricted stock vesting | | | | | ( |
| | — |
| | — |
| | — |
| | — |
Distributions to non-controlling interests | | — | | | — | | | — | | | — | | | ( | | | ( |
Net income | | — |
| | — |
| | — |
| | |
| | |
| | |
Other comprehensive loss | | — |
| | — |
| | ( |
| | — |
| | — |
| | ( |
Balances, June 30, 2025 | | | | | | | | | | | ( | | | | | | |
Cash distributions — common stock ($ | | — |
| | — |
| | — |
| | ( |
| | — |
| | ( |
Compensation expense — restricted stock and RSUs | | — | | | |
| | — |
| | — |
| | — |
| | |
Shares issued through dividend reinvestment plan | | | | | | | | — |
| | — |
| | — | | | |
Restricted stock unit vesting | | | | | ( | | | — |
| | — |
| | — | | | — |
Distributions to non-controlling interests | | — |
| | — |
| | — |
| | — |
| | ( |
| | ( |
Net income | | — |
| | — |
| | — |
| | |
| | |
| | |
Other comprehensive loss | | — |
| | — |
| | ( |
| | — |
| | — |
| | ( |
Balances, September 30, 2025 | $ | | | $ | | | $ | | | $ | ( | | $ | | | $ | |
See accompanying notes to consolidated financial statements.
4
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in Thousands, Except Per Share Data)
(Unaudited) (Continued)
| | | | | | | | | | | | | | | | | |
| | | | | | | Accumulated | | Accumulated | | Non-Controlling | | | | |||
| | |
| | |
| Other |
| Distributions |
| Interests in |
| | | |||
| Common | | Paid-in | | Comprehensive | | in Excess of | | Consolidated | | | | |||||
| Stock | | Capital | | Income (loss) | | Net Income | | Joint Ventures | | Total | ||||||
Balances, December 31, 2023 | $ | | | $ | | | $ | | | $ | ( | | $ | | | $ | |
Cash distributions — common stock ($ | | — |
| | — |
| | — |
| | ( |
| | — |
| | ( |
Compensation expense — restricted stock and RSUs | | — |
| | |
| | — |
| | — |
| | — |
| | |
Shares issued through dividend reinvestment plan | | |
| | |
| | — |
| | — |
| | — |
| | |
Restricted stock vesting | | |
| | ( |
| | — |
| | — |
| | — |
| | — |
Contributions to non-controlling interests | | — | | | — | | | — | | | — | | | | | | |
Distributions to non-controlling interests | | — |
| | — |
| | — |
| | — |
| | ( |
| | ( |
Net income | | — |
| | — |
| | — |
| | |
| | |
| | |
Other comprehensive loss | | — |
| | — |
| | ( |
| | — |
| | — |
| | ( |
Balances, March 31, 2024 | | | | | | | | | | | ( | | | | | | |
Cash distributions — common stock ($ | | — |
| | — |
| | — |
| | ( |
| | — |
| | ( |
Compensation expense — restricted stock and RSUs | | — |
| | |
| | — |
| | — |
| | — |
| | |
Shares issued through dividend reinvestment plan | | | | | |
| | — |
| | — |
| | — |
| | |
Distributions to non-controlling interests | | — |
| | — |
| | — |
| | — |
| | ( |
| | ( |
Net income | | — |
| | — |
| | — |
| | |
| | |
| | |
Other comprehensive loss | | — |
| | — |
| | ( |
| | — |
| | — |
| | ( |
Balances, June 30, 2024 | | | | | | | | | | | ( | | | | | | |
Cash Distributions – common stock ($ | | — |
| | — |
| | — |
| | ( |
| | — |
| | ( |
Compensation expense – restricted stock and RSUs | | — |
| | |
| | — |
| | — |
| | — |
| | |
Shares issued through dividend reinvestment plan | | | | | |
| | — |
| | — |
| | — |
| | |
Restricted stock unit vesting | | |
| | ( |
| | — |
| | — |
| | — |
| | — |
Distributions to non-controlling interests | | — |
| | — |
| | — |
| | — |
| | ( |
| | ( |
Net income | | — |
| | — |
| | — |
| | |
| | |
| | |
Other comprehensive loss | | — |
| | — |
| | ( |
| | — |
| | — |
| | ( |
Balances, September 30, 2024 | $ | | | $ | | | $ | | | $ | ( | | $ | | | $ | |
See accompanying notes to consolidated financial statements.
5
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited) (Continued on Next Page)
| | | | | | |
| | Nine Months Ended | ||||
| | September 30, | ||||
| | 2025 |
| 2024 | ||
Cash flows from operating activities: | | | | | | |
Net income | | $ | | | $ | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | |
Gain on sale of real estate, net | | | ( | | | ( |
Impairment loss | | | | | | |
Increase in net amortization of unbilled rental income | | | ( | | | ( |
Amortization and write-off of intangibles relating to leases, net | | | ( | | | ( |
Amortization of restricted stock and RSU compensation expense | | | | | | |
Equity in earnings of unconsolidated joint ventures | | | ( | | | ( |
Equity in earnings from sale of unconsolidated joint venture properties | | | ( | | | — |
Distributions of earnings from unconsolidated joint ventures | | | | | | |
Depreciation and amortization | | | | | | |
Amortization and write-off of deferred financing costs | | | | | | |
Payment of leasing commissions | | | ( | | | ( |
Increase in escrow, deposits, other assets and receivables | | | ( | | | ( |
Increase (decrease) in accrued expenses and other liabilities | | | | | | ( |
Net cash provided by operating activities | | | | | | |
| | | | | | |
Cash flows from investing activities: | | | | | | |
Purchase of real estate | | | ( | | | ( |
Improvements to real estate | | | ( | | | ( |
Investments in ground leased property | | | ( | | | ( |
Net proceeds from sale of real estate | | | | | | |
Net proceeds from repayment of loan receivable | | | | | | — |
Distributions of capital from unconsolidated joint ventures | | | | | | — |
Net cash used in investing activities | | | ( | | | ( |
| | | | | | |
Cash flows from financing activities: | | | | | | |
Proceeds from mortgage financings | | | | | | |
Repayments of mortgage financings | | | ( | | | ( |
Scheduled amortization payments of mortgages payable | | | ( | | | ( |
Proceeds from bank line of credit | | | | | | — |
Repayments on bank line of credit | | | ( | | | — |
Issuance of shares through dividend reinvestment plan | | | | | | |
Payment of financing costs | | | ( | | | ( |
Capital contribution from non-controlling interest | | | — | | | |
Distributions to non-controlling interests | | | ( | | | ( |
Cash distributions to common stockholders | | | ( | | | ( |
Net cash provided by (used in) financing activities | | | | | | ( |
| | | | | | |
Net decrease in cash, cash equivalents and restricted cash | | | ( | | | ( |
Cash, cash equivalents and restricted cash at beginning of year | | | | | | |
Cash, cash equivalents and restricted cash at end of period | | $ | | | $ | |
| | | | | | |
Supplemental disclosure of cash flow information: | | | | | | |
Cash paid during the period for interest expense | | $ | | | $ | |
Supplemental disclosure of non-cash investing activity: | | | | | | |
Purchase accounting allocation - intangible lease assets | | $ | | | $ | |
Purchase accounting allocation - intangible lease liabilities | | | ( | | | ( |
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited) (Continued)
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows:
| | | | | | |
| | Nine Months Ended | ||||
| | September 30, | ||||
| | 2025 |
| 2024 | ||
Cash and cash equivalents | | $ | | | $ | |
Restricted cash included in escrow, deposits and other assets and receivables | | | | | | |
Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows | | $ | | | $ | |
Restricted cash included in escrow, deposits and other assets and receivables represents amounts related to real estate tax and other reserve escrows required to be held by lenders in accordance with the Company’s mortgage agreements. The restriction on these escrow reserves will lapse when the related mortgage is repaid or when the related reserve conditions are satisfied.
See accompanying notes to consolidated financial statements.
7
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
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
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 primary beneficiary. OLP and its consolidated subsidiaries are referred to herein as the “Company”. Material intercompany items and transactions have been eliminated in consolidation.
Purchase Accounting for Acquisition of Real Estate
In acquiring real estate, the Company evaluates whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, and if that requirement is met, the asset group is accounted for as an asset acquisition and not a business combination. Transaction costs incurred with such asset acquisitions are capitalized to real estate assets and depreciated over the respectful useful lives.
The Company allocates the purchase price of real estate, including direct transaction costs applicable to an asset acquisition, among land, building, improvements and intangibles (e.g., the value of above, below and at-market leases, origination costs associated with in-place leases and above or below-market mortgages assumed at the acquisition date). The value, as determined, is allocated to the gross assets acquired based on management’s determination of the relative fair values of these assets and liabilities.
The Company assesses the fair value of the gross assets acquired based on available market information which utilize estimated cash flow projections; such inputs are categorized as Level 3 inputs in the fair value hierarchy. In determining fair value, factors considered by management include an evaluation of current market demand, market capitalization rates and discount rates, estimates of carrying costs (e.g., real estate taxes, insurance, and other operating expenses), and lost rental revenue during the expected lease-up periods. Management also estimates costs to execute similar leases, including leasing commissions and tenant improvements.
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
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 any interests pursuant to which the Company may have a variable interest as a lessor. Leases may contain certain protective rights, such as the right of sale and the receipt of certain escrow deposits.
The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting. All investments in unconsolidated joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result,
The Company reviews on a quarterly basis its investments in unconsolidated joint ventures for other-than-temporary losses in investment value. Any decline that is not expected to be recovered based on the underlying assets of the investment is considered other than temporary and an impairment charge is recorded as a reduction in the carrying value of the investment. During the three and nine months ended September 30, 2025 and 2024, there were no such other-than-temporary impairment charges related to the Company’s investments in unconsolidated joint ventures.
The Company has elected to follow the cumulative earnings approach when assessing, for the consolidated statement of cash flows, whether the distribution from the investee is a return of the investor’s investment as compared to a return on its investment. The source of the cash generated by the investee to fund the distribution is not a factor in the analysis (that is, it does not matter whether the cash was generated through investee refinancing, sale of assets or operating results). Consequently, the investor only considers the relationship between the cash received from the investee to its equity in the undistributed earnings of the investee, on a cumulative basis, in assessing whether the distribution from the investee is a return on or a return of its investment. Cash received from the unconsolidated entity is presumed to be a return on the investment to the extent that, on a cumulative basis, distributions received by the investor are less than its share of the equity in the undistributed earnings of the entity.
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
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 | | $ | | | $ | | | $ | | | $ | |
Variable lease revenues | | | | | | | | | | | | |
Lease revenues (a) | | $ | | | $ | | | $ | | | $ | |
| (a) | Excludes amortization related to lease intangible assets and liabilities of $ |
In many of the Company’s leases, the tenant is obligated to pay the real estate taxes, insurance, and certain other expenses directly to the vendor. These obligations, which have been assumed by the tenants, are not reflected in the Company’s consolidated financial statements. To the extent any such tenant defaults on its lease or if it is deemed probable that the tenant will fail to pay for such obligations, a liability for such obligations would be recorded.
On a quarterly basis, the Company assesses the collectability of substantially all lease payments due by, among other things, reviewing the tenant’s payment history or financial condition. Changes to collectability are recognized as a current period adjustment to rental revenue. As of September 30, 2025, the Company has assessed the collectability of all recorded lease revenues as probable.
Minimum Future Rents
As of September 30, 2025, the minimum future contractual rents to be received on non-cancellable operating leases are included in the table below (amounts in thousands). The minimum future contractual rents do not include (i) straight-line rent or amortization of lease intangibles or incentives and (ii) variable lease payments as described above.
| | | |
From October 1 – December 31, 2025 | | $ | |
For the year ending December 31, | | | |
2026 | | | |
2027 | | | |
2028 | | | |
2029 | | | |
2030 | | | |
Thereafter | | | |
Total | | $ | |
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 3 – LEASES (CONTINUED)
Lease Termination Fees
In June 2025, the Company recognized a lease termination fee of $
In March 2024, a consolidated joint venture in Lakewood, Colorado, in which the Company held a
Lessee Accounting
Ground Lease
The Company is a lessee under a ground lease in Greensboro, North Carolina, which is classified as an operating lease. The ground lease expires March 3, 2030 and provides for up to
Office Lease
The Company is a lessee under a corporate office lease in Great Neck, New York, which is classified as an operating lease. The lease expires December 31, 2031 and provides for a five-year renewal
Minimum Future Lease Payments
As of September 30, 2025, the minimum future lease payments related to these operating leases are as follows (amounts in thousands):
| | | |
From October 1 – December 31, 2025 | | $ | |
For the year ending December 31, | | | |
2026 | | | |
2027 | | | |
2028 | |
| |
2029 | |
| |
2030 | |
| |
Thereafter | |
| |
Total undiscounted cash flows | | $ | |
Present value discount | |
| ( |
Lease liability | | $ | |
The lease liability is included in Accrued expenses and other liabilities on the consolidated balance sheet.
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 4 – REAL ESTATE ACQUISITIONS
The following tables detail the Company’s real estate asset acquisitions and purchase price allocations during the nine months ended September 30, 2025 (amounts in thousands):
| | | | | | | | | | |
| | | | Contract | | | | Capitalized | ||
| | | | Purchase | | | | Transaction | ||
Description of Industrial Property |
| Date Acquired |
| Price |
| Terms of Payment |
| Costs | ||
Multi-tenant (2 properties) | | | | | | | | | | |
Theodore, Alabama | | January 16, 2025 | | $ | | | Cash and $ | | $ | |
Amazon.com Services, LLC | | | | | | | | | | |
Wichita, Kansas | | February 6, 2025 | | | | | Cash and $ | | | |
Multi-tenant | | | | | | | | | | |
Council Bluffs, Iowa | | March 14, 2025 | | | | | Cash and $ | | | |
Charter Next Generation, Inc. | | | | | | | | | | |
Blythewood, South Carolina | | August 27, 2025 | | | | | Cash and $ | | | |
Totals for the nine months ended September 30, 2025 | | $ | |
|
| | $ | | ||
| (a) | Simultaneously with the acquisition of these properties, the Company obtained new mortgage debt of $ |
| (b) | Simultaneously with the acquisition of this property, the Company obtained new mortgage debt of $ |
| (c) | Simultaneously with the acquisition of this property, the Company obtained new mortgage debt of $ |
| (d) | Simultaneously with the acquisition of this property, the Company obtained new mortgage debt of $ |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | Rate (a) | ||
| | | | | Building & | | Intangible Lease | | | | | Market | | | |||||
Description of Industrial Property |
| Land |
| Improvements | | Asset |
| Liability | | Total | | Cap | | Discount | |||||
Multi-tenant (2 properties) | | | | | | | | | | | | | | | | | | | |
Theodore, Alabama | | $ | | | $ | | | $ | | | $ | ( | | $ | | | | ||
Amazon.com Services, LLC | | | | | | | | | | | | | | | | | | | |
Wichita, Kansas | | | | | | | | | | | | ( | | | | | | ||
Multi-tenant | | | | | | | | | | | | | | | | | | | |
Council Bluffs, Iowa | | | | | | | | | | | | ( | | | | | | ||
Charter Next Generation, Inc. | | | | | | | | | | | | | | | | | | | |
Blythewood, South Carolina | | | | | | | | | | | | — | | | | | | ||
Totals for the nine months ended September 30, 2025 | | $ | | | $ | | | $ | | | $ | ( | | $ | | | | | |
| (a) | The fair value of the tangible assets and lease-related intangibles were assessed as of the acquisition date using an income approach and estimated cash flow projections which utilize an appropriate market capitalization rate and discount rate which are categorized as Level 3 unobservable inputs in the fair value hierarchy (as defined in Note 12). |
Acquisition subsequent to September 30, 2025
On October 30, 2025, the Company acquired a
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 5 – SALES OF PROPERTIES, PROPERTIES HELD-FOR-SALE AND IMPAIRMENT LOSS
Sales of Properties
The following table details the Company’s sales of real estate during the nine months ended September 30, 2025 and 2024 (amounts in thousands):
| | | | | | | | | | | |
| | | | | | Gross | | (Loss) Gain on Sale | | ||
Description of Property | | City, State | | Date Sold | | Sales Price | | of Real Estate, Net | | ||
Land and improvements (a) | | Lakewood, Colorado | | January 16, 2025 | | $ | | | $ | ( | (a) |
Hooters restaurant property | | Concord, North Carolina | | January 21, 2025 | | | | | | | |
Multi-tenant retail stores (b) | | Lakewood, Colorado | | June 23, 2025 | | | | | | | (b) |
Total Wine retail property | | Greensboro, North Carolina | | June 25, 2025 | | | | | | | |
La-Z-Boy retail property | | Gurnee, Illinois | | June 27, 2025 | | | | | | | |
Land parcel (c) | | Lakewood, Colorado | | July 15, 2025 | | | | | | | (c) |
Office Depot retail property | | Eugene, Oregon | | August 1, 2025 | | | | | | | |
Blue Pearl Veterinary hospital | | Newark, Delaware | | September 8, 2025 | | | | | | | |
Vacant retail property | | Bolingbrook, Illinois | | September 25, 2025 | | | | | | | |
Totals for the nine months ended September 30, 2025 | $ | | (d) | $ | | (e) | |||||
| | | | | | | | | | | |
Hacienda Colorado restaurant parcel (f) | | Lakewood, Colorado | | March 6, 2024 | | $ | | (f) | $ | | (f) |
Applebee's restaurant property | | Kennesaw, Georgia | | May 6, 2024 | | | | | | | |
FedEx industrial property | | Miamisburg, Ohio | | May 9, 2024 | | | | | | | |
Havertys retail property | | Wichita, Kansas | | June 6, 2024 | | | | | | | |
Urban Outfitters retail property | | Lawrence, Kansas | | June 7, 2024 | | | | | | | |
Walgreens retail property (g) | | Cape Girardeau, Missouri | | June 10, 2024 | | | | | | | (g) |
Vacant retail property | | Kennesaw, Georgia | | June 28, 2024 | | | | | | | |
Vacant health and fitness property | | Hamilton, Ohio | | August 15, 2024 | | | | | | | (h) |
Vacant industrial property | | Wauconda, Illinois | | August 29, 2024 | | | | | | | |
Hobby Lobby retail property | | Woodbury, Minnesota | | September 16, 2024 | | | | | | | |
Totals for the nine months ended September 30, 2024 | $ | | (i) | $ | | (j) | |||||
| (a) | A consolidated joint venture, in which the Company held a |
| (b) | The Colorado JV sold its multi-tenant, in-line retail stores that were part of the shopping center at this property. The non-controlling interest’s share of the gain was $ |
| (c) | The Colorado JV sold the last remaining land parcel at this property. The non-controlling interest’s share of the gain was $ |
| (d) | In connection with these sales, the Company paid off mortgages in an aggregate of $ |
| (e) | As a result of these sales, the Company wrote-off, as a reduction to Gain on sale of real estate, net, an aggregate of $ |
| (f) | The Colorado JV sold a restaurant parcel which was part of the multi-tenant shopping center. The non-controlling interest’s share of the gain was $ |
| (g) | This property was owned by a consolidated joint venture in which the Company held a |
| (h) | See discussion below regarding a $ |
| (i) | In connection with these sales, the Company paid off mortgages in an aggregate of $ |
| (j) | As a result of these sales, the Company wrote-off, as a reduction to Gain on sale of real estate, net, an aggregate of $ |
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 5 – SALES OF PROPERTIES, PROPERTIES HELD-FOR-SALE AND IMPAIRMENT LOSS (CONTINUED)
Properties Held-for-Sale and Impairment Loss
On September 9, 2025, the Company entered into a contract to sell a retail property located in Port Clinton, Ohio for $
On September 10, 2025, the Company and its ground lease tenant entered into a contract to sell the entire collective interest in The Vue Apartments, a multi-family property located in Beachwood, Ohio (see Note 7). At September 30, 2025, the Company re-measured the property’s net book value to its fair value based on the estimated net sales price (which was determined to be a Level 3 unobservable input in the fair value hierarchy, as discussed in Note 12). As a result, the Company recognized a $
The Company recognized a $
NOTE 6 – INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
On August 26, 2025, the Company and its joint venture partners sold the last two remaining unconsolidated joint venture properties in Savannah, Georgia for an aggregate of $
As of September 30, 2025 and December 31, 2024, the Company’s equity investment in these ventures totaled $
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 7 – VARIABLE INTEREST ENTITIES, CONSOLIDATED JOINT VENTURES AND CONTINGENT LIABILITY
Variable Interest Entity – Consolidated Joint Ventures
As of September 30, 2025, the Company has
The following is a summary of the consolidated VIEs’ carrying amounts and classification in the Company’s consolidated balance sheets, none of which are restricted (amounts in thousands):
| | | | | | |
| | September 30, | | December 31, | ||
|
| 2025 |
| 2024 (a) | ||
Land | | $ | | | $ | |
Buildings and improvements, net of accumulated depreciation of $ | | | | | | |
Cash | | | | | | |
Unbilled rent receivable | | | | | | |
Unamortized intangible lease assets, net | | | — | | | |
Escrow, deposits and other assets and receivables | | | | | | |
Mortgages payable, net of unamortized deferred financing costs of $ | | | | | | |
Accrued expenses and other liabilities | | | | | | |
Unamortized intangible lease liabilities, net | | | — | | | |
Non-controlling interests in consolidated joint ventures | | | | | | |
| (a) | 2024 includes the balances of the Colorado JV which was sold during 2025 (see Note 5). |
Distributions to each joint venture partner are determined pursuant to the applicable operating agreement and, in the event of a sale of, or refinancing of the mortgage encumbering, the property owned by such venture, the distributions to the Company may be less than that implied by the Company’s equity ownership interest in the venture.
Variable Interest Entity – Ground Lease
The Company determined it has a variable interest through its ground lease at its Beachwood, Ohio property (the Vue Apartments) and the owner/operator of this property is a VIE because its equity investment at risk is insufficient to finance its activities without additional subordinated financial support. The Company further determined that it is not the primary beneficiary of this VIE because the Company does not have power over the activities that most significantly impact the owner/operator’s economic performance and therefore, does not consolidate this VIE for financial statement purposes. Accordingly, the Company accounts for this investment as land and the revenues from the ground lease as Rental income, net. The ground lease provides for rent which can be deferred and paid based on the operating performance of the property; therefore, this rent is recognized as rental income when the operating performance is achieved and the rent is received. No such ground lease rental income has been collected since October 2020. On November 4, 2025, the Company and its ground lease tenant sold the entire collective interest in this multi-family property (see Note 5).
As of September 30, 2025, the VIE’s maximum exposure to loss was $
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 8 – DEBT OBLIGATIONS
Mortgages Payable
The following table details the Mortgages payable, net, balances per the consolidated balance sheets (amounts in thousands):
| | | | | | |
| | September 30, | | December 31, | ||
|
| 2025 |
| 2024 | ||
Mortgages payable, gross | | $ | | | $ | |
Unamortized deferred financing costs | |
| ( | |
| ( |
Unamortized mortgage intangible assets | | | ( | | | ( |
Mortgages payable, net | | $ | | | $ | |
The following table sets forth, as of September 30, 2025, scheduled principal repayments with respect to the Company’s mortgage debt (amounts in thousands):
| | | | | | | | | | | | | | | | | | | | | |
| | For the Three | | | | | | | | | | | | | | | | | | | |
| | Months Ending | | For the Years Ending | | | | | | | |||||||||||
| | December 31, | | December 31, | | | | | | | |||||||||||
|
| 2025 |
| 2026 |
| 2027 |
| 2028 |
| 2029 |
| Thereafter |
| Total | |||||||
Amortization payments | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Principal due at maturity | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Total | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Line of Credit
The Company’s credit facility with Manufacturers and Traders Trust Company and VNB New York, LLC, provides that it may borrow up to $
The facility, which matures December 31, 2026, provides for an interest rate equal to
At September 30, 2025 and October 31, 2025, $
At September 30, 2025 and December 31, 2024, the Company had unamortized deferred financing costs of $
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 9 – RELATED PARTY TRANSACTIONS
Compensation and Services Agreement
Pursuant to the compensation and services agreement with Majestic Property Management LLC (“Majestic”), Majestic provides the Company with certain (i) executive, administrative, legal, accounting, clerical, property management, property acquisition, consulting (i.e., sale, leasing, brokerage, and mortgage financing), and construction supervisory services (collectively, the “Services”) and (ii) facilities and other resources. Majestic provides compensation to several of the Company’s executive officers and is indirectly owned by, among others, Matthew J. Gould, the Company’s chairman, and Jeffrey A. Gould, a director and senior vice president of the Company.
In consideration for the Services, the Company paid Majestic $
Executive officers and others providing services to the Company under the compensation and services agreement were awarded shares of restricted stock and restricted stock units (“RSUs”) under the Company’s stock incentive plans (described in Note 10). The related expense charged to the Company’s operations was $
The amounts paid under the compensation and services agreement (except for the property management services which are included in Real estate expenses) and the costs of the stock incentive plans are included in General and administrative expense on the consolidated statements of income.
Other
During 2025 and 2024, the Company paid quarterly fees of (i) $
The Company obtains its property insurance in conjunction with Gould Investors L.P. (“Gould Investors”), a related party, and reimburses Gould Investors annually for the Company’s insurance cost relating to its properties. Amounts reimbursed to Gould Investors were $
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 10 – STOCKHOLDERS’ EQUITY
Common Stock Dividend
On September 10, 2025, the Board of Directors declared a quarterly cash dividend of $
Dividend Reinvestment Plan
The Company’s Dividend Reinvestment Plan (the “DRP”), among other things, provides stockholders with the opportunity to reinvest all or a portion of their cash dividends paid on the Company’s common stock in additional shares of its common stock, at a discount, determined in the Company’s sole discretion, of up to
Stock Repurchase Program
The Board of Directors authorized a repurchase program pursuant to which the Company can repurchase shares of its common stock in open-market, through privately negotiated transactions or otherwise.
Stock Based Compensation
The Company’s 2025, 2022 and 2019 Incentive Plans (collectively, the “Plans”), permit the Company to grant, among other things, stock options, restricted stock, RSUs, performance share awards and dividend equivalent rights and any one or more of the foregoing to its employees, officers, directors and consultants. A maximum of
The following details the shares subject to awards that are outstanding under the Plans as of September 30, 2025:
| | | | | | |
| | Restricted Stock | | RSUs | | Totals |
2025 Incentive Plan | | — | | | | |
2022 Incentive Plan (a) | | | | | | |
2019 Incentive Plan (a) | | | | — | | |
Totals | | | | | | |
| (a) |
Restricted Stock
For accounting purposes, the restricted stock is not included in the shares shown as outstanding on the balance sheet until they vest; however, dividends are paid on the unvested shares. The restricted stock grants are charged to General and administrative expense over the respective vesting periods based on the market value of the common stock on the grant date. Unless earlier forfeited because the participant’s relationship with the Company terminated, unvested restricted stock awards vest
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 10 – STOCKHOLDERS’ EQUITY (CONTINUED)
RSUs
The following table reflects the activities involving RSUs:
| | | | | | | | | | | | | |
|
| 2025 Grant | (a) | | 2024 Grant | | | 2023 Grant | | 2022 Grant | | 2021 Grant | |
RSUs granted (b) | | | | | | | | | | | | | |
RSUs vested | | — | | | — | | | — | | | (c) | | (d) |
RSUs forfeited | | — | | | | (e) | | | (e) | | (f) | | (g) |
RSUs outstanding | | | | | | | | | | — | | — | |
Vesting date (h)(i) | | 6/30/2028 | | | 6/30/2027 | | | 6/30/2026 | | 6/30/2025 | | 6/30/2024 | |
| (a) | For accounting purposes, these shares were granted in July 2025. |
| (b) | The shares underlying the RSUs are excluded from the shares shown as outstanding on the balance sheet until they have vested and been issued. |
| (c) | Such shares were issued in August 2025. |
| (d) | Such shares were issued in August 2024. |
| (e) | Such shares were forfeited in May 2025 as the recipient did not maintain a relationship with the Company during the applicable three-year performance cycle. |
| (f) | Of such shares, (i) |
| (g) | Of such shares (i) |
| (h) | Generally, the recipient must maintain a relationship with the Company during the applicable three-year performance cycle. |
| (i) | RSUs vest upon satisfaction of metrics related to average annual total stockholder return (“TSR Metric”) and average annual return on capital (“ROC Metric”; together with the TSR Metric, the “Metrics”) and are issued to the extent the Compensation Committee determines that the Metrics with respect to the vesting of such shares have been satisfied. |
The Metrics and other material terms and conditions of the RSUs are as follows:
| | | | | | | | |
| | | | | | Performance Criteria (a) | ||
Year RSU Granted | | Metric | | Weight | | Minimum | | Maximum |
2022 - 2025 (b)(c)(d) | | ROC Metric (e) | | | Average annual of at least | | Average annual of at least | |
| | TSR Metric (f) | | | Average annual of at least | | Average annual of at least | |
| (a) | If the Metrics fall between the applicable minimum and maximum performance criteria, a pro-rata portion of such units (as calculated pursuant to the applicable award agreement), as applicable, vest. |
| (b) | The RSUs are not entitled to voting rights. |
| (c) | Upon vesting, the holders of such RSUs receive an amount equal to the dividends that would have been paid on the underlying shares had such shares been outstanding during the three-year performance cycle. As of September 30, 2025 and December 31, 2024, the Company accrued an aggregate of $ |
| (d) | In August 2025, the Company paid the holders of the 2022 RSU grant an aggregate of approximately $ |
| (e) | The ROC Metrics meet the definition of a performance condition. Fair value is based on the market value on the date of grant. For ROC Awards, the Company does not recognize expense when performance conditions are not expected to be met; such performance assumptions are re-evaluated quarterly. |
| (f) | The TSR Metrics meet the definition of a market condition. A third-party appraiser prepares a Monte Carlo simulation pricing model to determine the fair value of such awards, which is recognized ratably over the three-year service period. For the 2025 TSR awards, the per unit or share fair value was estimated using the following assumptions: an expected life of |
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 10 – STOCKHOLDERS’ EQUITY (CONTINUED)
As of September 30, 2025, based on performance and market assumptions, the fair value of the RSUs granted in 2025, 2024 and 2023 is $
The following is a summary of the activity of the Plans:
| | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Restricted stock: | | | | | | | | | | | | |
Number of shares granted | | | — | | | — | | | | | | |
Average per share grant price | | $ | — | | $ | — | | $ | | | $ | |
Deferred compensation to be recognized over vesting period | | $ | — | | $ | — | | $ | | | $ | |
| | | | | | | | | | | | |
Number of non-vested shares: | | | | | | | | | | | | |
Non-vested beginning of the period | | | | | | | | | | | | |
Grants | | | — | | | — | | | | | | |
Vested during the period | | | — | | | — | | | ( | | | ( |
Forfeitures | | | — | | | — | | | ( | | | — |
Non-vested end of the period | | | | | | | | | | | | |
| | | | | | | | | | | | |
RSUs: | | | | | | | | | | | | |
Number of underlying shares granted | | | | | | | | | | | | |
Average per share grant price | | $ | | | $ | | | $ | | | $ | |
Deferred compensation to be recognized over vesting period | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Number of non-vested shares: | | | | | | | | | | | | |
Non-vested beginning of the period | | | | | | | | | | | | |
Grants | | | | | | | | | | | | |
Vested during the period | | | — | | | — | | | ( | | | ( |
Forfeitures | | | — | | | — | | | ( | | | ( |
Non-vested end of the period | | | | | | | | | | | | |
| | | | | | | | | | | | |
Restricted stock and RSU grants (based on grant price): | | | | | | | | | | | | |
Weighted average per share value of non-vested shares | | $ | | | $ | | | $ | | | $ | |
Value of stock vested during the period | | $ | — | | $ | — | | $ | | | $ | |
Weighted average per share value of shares forfeited during the period | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Total charge to operations: | | | | | | | | | | | | |
Outstanding restricted stock grants | | $ | | | $ | | | $ | | | $ | |
Outstanding RSUs | | | | | | | | | | | | |
Total charge to operations | | $ | | | $ | | | $ | | | $ | |
As of September 30, 2025, total compensation costs of $
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 11 – EARNINGS PER COMMON SHARE
Basic earnings per share was determined by dividing net income allocable to common stockholders for each period by the weighted average number of shares of common stock outstanding during the applicable period. Net income is also allocated to the unvested restricted stock outstanding during each period, as the restricted stock is entitled to receive dividends and is therefore considered a participating security. As of September 30, 2025, the shares of common stock underlying the RSUs (see Note 10) are excluded from the basic earnings per share calculation, as these units are not participating securities until they vest and are issued.
Diluted earnings per share reflects the potential dilution that could occur if securities or other rights exercisable for, or convertible into, common stock were exercised or converted or otherwise resulted in the issuance of common stock that shared in the earnings of the Company.
The following table provides a reconciliation of the numerator and denominator of earnings per share calculations (amounts in thousands, except per share amounts):
| | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
Numerator for basic and diluted earnings per share: | | | | | | | | | | | | |
Net income | | $ | | | $ | | | $ | | | $ | |
Deduct net income attributable to non-controlling interests | |
| ( | |
| ( | |
| ( | |
| ( |
Deduct earnings allocated to unvested restricted stock (a) | |
| ( | | | ( | | | ( | | | ( |
Net income available for common stockholders: basic and diluted | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Denominator for basic earnings per share: | | | | | | | | | | | | |
Weighted average number of common shares outstanding | |
| | | | | | | | | | |
Effect of dilutive securities: RSUs | |
| | | | | | | | | | |
Denominator for diluted earnings per share: | | | | | | | | | | | | |
Weighted average number of shares | |
| | |
| | |
| | |
| |
| | | | | | | | | | | | |
Earnings per common share: basic | | $ | | | $ | | | $ | | | $ | |
Earnings per common share: diluted | | $ | | | $ | | | $ | | | $ | |
| (a) | Represents an allocation of distributed earnings to unvested restricted stock that, as participating securities, are entitled to receive dividends. |
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 11 – EARNINGS PER COMMON SHARE (CONTINUED)
The following table identifies the number of shares of common stock underlying the RSUs that are included in the calculation, on a diluted basis, of the weighted average number of shares of common stock for such periods:
| | | | | | | | | | |
Three and Nine Months Ended September 30, 2025: | ||||||||||
|
| Total Number |
| Shares Included Based on (a) |
| | ||||
| | of Underlying | | Return on | | Stockholder | | | | Shares |
Date of Award |
| Shares |
| Capital Metric |
| Return Metric |
| Total |
| Excluded (b) |
July 1, 2025 (c) | | | | | | — | | | | |
July 16, 2024 (c)(d) | | | | | | — | | | | |
July 1, 2023 (c)(d) |
| | | | | | | | | |
Totals |
| |
| |
| | | |
| |
| | | | | | | | | | |
Three and Nine Months Ended September 30, 2024: | ||||||||||
|
| Total Number |
| Shares Included Based on (a) |
| | ||||
| | of Underlying | | Return on | | Stockholder | | | | Shares |
Date of Award |
| Shares |
| Capital Metric |
| Return Metric |
| Total |
| Excluded (b) |
July 16, 2024 (c)(d) |
| | | | | | | | | |
July 1, 2023 (c)(d) |
| | | | | | | | | |
July 1, 2022 (e) | | | | | | | | | | |
Totals |
| |
| |
| |
| |
| |
| (a) | Reflects the number of shares underlying RSUs that would be issued assuming the measurement date used to determine whether the applicable conditions are satisfied is September 30 of the applicable period. |
| (b) | Excluded as the applicable conditions had not been met for these shares at the applicable measurement dates. |
| (c) | The RSUs awarded in 2025, 2024 and 2023 vest, subject to satisfaction of the applicable market and/or performance conditions, as of June 30, 2028, 2027 and 2026, respectively (see Note 10). |
| (d) | In May 2025, RSUs with respect to |
| (e) | With respect to the RSUs awarded July 1, 2022, |
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 12 – FAIR VALUE MEASUREMENTS
The Company measures the fair value of financial instruments based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. In accordance with the fair value hierarchy, Level 1 assets/liabilities are valued based on quoted prices for identical instruments in active markets, Level 2 assets/liabilities are valued based on quoted prices in active markets for similar instruments, on quoted prices in less active or inactive markets, or on other “observable” market inputs and Level 3 assets/liabilities are valued based significantly on “unobservable” market inputs.
The carrying amounts of cash and cash equivalents, escrow, deposits and other assets and receivables (excluding interest rate swaps), dividends payable, and accrued expenses and other liabilities, are not measured at fair value on a recurring basis but are considered to be recorded at amounts that approximate fair value.
The fair value and carrying amounts of the Company’s mortgages payable are as follows (dollars in thousands):
| | | | | | | | |
| | September 30, | | | December 31, | | ||
|
| 2025 |
| | 2024 |
| ||
Fair value of mortgages payable (a) | | $ | | | | $ | | |
Carrying value of mortgages payable, gross | | $ | | | | $ | | |
Fair value less than the carrying value | | $ | ( | | | $ | ( | |
Blended market interest rate (a) | | | | % | | | | % |
Weighted average interest rate | | | | % | | | | % |
Weighted average remaining term to maturity (years) | | | | | | | | |
| (a) | Estimated using unobservable inputs such as available market information and discounted cash flow analysis based on borrowing rates the Company believes it could obtain with similar terms and maturities. These fair value measurements fall within Level 3 of the fair value hierarchy. |
Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.
Fair Value on a Recurring Basis
As of September 30, 2025, the Company had in effect
Fair values are approximated using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. This fair value analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. Although the Company has determined the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the associated credit valuation adjustments use Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparty. As of September 30, 2025, the Company has assessed and determined the impact of the credit valuation adjustments on the overall valuation of its derivative positions is not significant. As a result, the Company determined its derivative valuation is classified in Level 2 of the fair value hierarchy.
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 12 – FAIR VALUE MEASUREMENTS (CONTINUED)
The Company does not currently own any financial instruments that are measured on a recurring basis and that are classified as Level 1 or 3.
The carrying and fair value of the Company’s derivative financial instruments was $
The following table presents the effect of the Company’s derivative financial instruments on the consolidated statements of income for the periods presented (amounts in thousands):
| | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
|
| 2025 | | 2024 |
| 2025 |
| 2024 | ||||
Amount of gain (loss) recognized on derivatives in other comprehensive income | | $ | | | $ | ( | | $ | | | $ | |
Amount of reclassification from Accumulated other comprehensive income into Interest expense | | | | | | | | | | | | |
During the twelve months ending September 30, 2026, the Company estimates an additional $
The derivative agreements in effect at September 30, 2025 provide that if the wholly-owned subsidiary of the Company which is a party to such agreement defaults or is capable of being declared in default on any of its indebtedness, then a default can be declared on such subsidiary’s derivative obligation. In addition, the Company is a party to the derivative agreements and if there is a default by the subsidiary on the loan subject to the derivative agreement to which the Company is a party and if there are swap breakage losses on account of the derivative being terminated early, the Company could be held liable for such swap breakage losses.
Fair Value on a Non-Recurring Basis
Non-financial assets measured at fair value on a non-recurring basis in the consolidated financial statements consist of properties located in (a) Beachwood, Ohio, for which the Company recorded an impairment loss of $
NOTE 13 – SEGMENT REPORTING
Substantially all of the Company’s real estate assets, at acquisition, are comprised of real estate owned that is leased to tenants on a long-term basis. Therefore, the Company aggregates real estate assets for reporting purposes and operates in
The Company’s Chief Operating Decision Makers (“CODMs”) are its Chief Executive Officer and Chief Operating Officer. As the Company operates in
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
SEPTEMBER 30, 2025 (CONTINUED)
NOTE 14 – NEW ACCOUNTING PRONOUNCEMENT
In November 2024, the FASB issued ASU No. 2024–03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220–40): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses into specified categories within the footnotes to the financial statements. ASU No. 2024–03 is applicable for fiscal years beginning after December 15, 2026. The Company is in the process of evaluating the new guidance to determine the extent to which it will impact the Company’s consolidated financial statements.
NOTE 15 – SUBSEQUENT EVENTS
Subsequent events have been evaluated and except as noted below and previously disclosed herein, there were no other events relative to the consolidated financial statements that require additional disclosure.
Beachwood, Ohio Litigation
On October 30, 2025, in connection with the sale of the Beachwood, Ohio property (see Notes 5 and 7), the Company entered into an agreement pursuant to which it is to receive $
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, together with other statements and information publicly disseminated by us, contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend 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 purposes 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 and include, without limitations, statements regarding our future estimated rental income, funds from operations, adjusted funds from operations and our dividend. Among other things, forward looking statements with respect to (i) estimates of base rent and rental income exclude variable rent (including tenant reimbursements) and the adjustments required by GAAP to present rental income, (ii) estimates of base rent may not, unless otherwise expressly indicated, reflect the expenses (e.g., real estate expenses, interest, depreciation and amortization or any one or more of the foregoing) with respect to the associated property, (iii) anticipated property purchases, sales, financings and/or refinancings may not be completed during the period or on the terms indicated or at all, and (iv) estimates of gains and/or net proceeds from property sales (i.e., cash collected by us at closing after giving effect to, among other things, as applicable, the payoff of any mortgages on the properties sold and our non-controlling interest’s share of the proceeds) or proceeds from financing or refinancing transactions are subject to adjustment, among other things, because actual closing costs may differ from the estimated costs. 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 our control and which could materially affect actual results, performance or achievements.
The uncertainties, risks and factors which may cause actual results to differ materially from current expectations include, but are not limited to:
| ● | the financial failure of, or other default in payment by, tenants under their leases and the potential resulting vacancies; |
| ● | adverse changes and disruption in the sectors in which our tenants operate (e.g., industrial and retail), which could impact our tenants’ ability to pay rent and expense reimbursement; |
| ● | the level and volatility of interest rates; |
| ● | loss or bankruptcy of one or more of our tenants, and bankruptcy laws that may limit our remedies if a tenant becomes bankrupt and rejects its lease; |
| ● | general economic and business conditions and developments, including those currently affecting or that may affect our economy; |
| ● | general and local real estate conditions, including any changes in the value of our real estate; |
| ● | our ability to renew or re-lease space as leases expire; |
| ● | our ability to pay dividends; |
| ● | the effect of changes in political conditions in the U.S., including in connection with the new administration’s policies and priorities, or otherwise; |
| ● | changes in governmental laws and regulations relating to real estate and related investments; |
| ● | compliance with credit facility and mortgage debt covenants; |
| ● | the availability of, and costs associated with, sources of capital and liquidity; |
| ● | competition in our industry; |
| ● | technological changes, such as artificial intelligence, autonomous vehicles, reconfiguration of supply chains, robotics, 3D printing or other technologies; |
| ● | potential natural disasters, epidemics, pandemics or outbreak of infectious disease, such as COVID-19, and other potentially catastrophic events such as acts of war and/or terrorism; and |
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| ● | the other risks, uncertainties and factors described in the reports and documents we file with the SEC including the risks, uncertainties and factors described in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Report”) under the caption “Item 1A. Risk Factors” for a discussion of certain factors which may cause actual results to differ materially from current. |
In light of the factors referred to above, the future events discussed or incorporated by reference in this report and other documents we file with the SEC may not occur, and actual results, performance or achievements could differ materially from those anticipated or implied in the forward-looking statements. Given these uncertainties, you should not rely on any forward-looking statements.
Except as may be required under the U.S. federal securities laws, we undertake no obligation to publicly update our forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make in our reports that are filed with or furnished to the SEC.
Challenges and Uncertainties Facing Certain Tenants and Properties
We face challenges due to the volatile economic environment (including the impact of threatened and/or imposed tariffs, and the related possibility of trade wars and the impact of the foregoing on us and in particular, on our seaport based industrial/warehouse properties). Our cash flow and profitability will be adversely impacted if these challenges are not resolved in a satisfactory manner.
Overview
We are a self-administered and self-managed real estate investment trust, or REIT. To qualify as a REIT, under the Internal Revenue Code of 1986, as amended, we must meet a number of organizational and operational requirements, including a requirement that we distribute currently at least 90% of ordinary taxable income to our stockholders. We intend to comply with these requirements and to maintain our REIT status.
We acquire, own and manage a portfolio consisting primarily of industrial properties. As of September 30, 2025, we own 98 properties (including 61 industrial properties) located in 30 states. Based on square footage, our occupancy rate at September 30, 2025 is approximately 98.2%.
We face a variety of risks and challenges in our business, including the possibility we will not be able to: acquire or dispose of properties on acceptable terms, lease our properties on terms favorable to us or at all, collect amounts owed to us by our tenants, renew or re-let, on acceptable terms, leases that are expiring or otherwise terminating.
Other than with respect to our continuing focus on acquiring industrial properties, we generally seek to manage the risk of our real property portfolio and the related financing arrangements by (i) diversifying among locations, tenants, scheduled lease expirations, mortgage maturities and lenders, and (ii) minimizing our exposure to interest rate fluctuations. Substantially all of our mortgage debt either bears interest at fixed rates or is subject to interest rate swaps, limiting our exposure to fluctuating interest rates on our outstanding mortgage debt.
We monitor the risk of tenant non-payments through a variety of approaches tailored to the applicable situation. Generally, based on our assessment of the credit risk posed by our tenants, we monitor a tenant’s financial condition through one or more of the following actions: reviewing tenant financial statements or other financial information, obtaining other tenant related information, changes in tenant payment patterns, regular contact with tenant’s representatives, tenant credit checks and regular management reviews of our tenants. We have in the past, and we may in the future, sell a property if the tenant’s financial condition is unsatisfactory.
In acquiring and disposing of properties, among other things, we evaluate the terms of the leases, the credit of the existing tenants, the terms and conditions of the related financing arrangement (including any contemplated financing) and engage in a fundamental analysis of the real estate to be bought or sold. This fundamental analysis takes into account, among other things, the estimated value of the property, local competition and demographics, and the ability to re-rent or dispose of the property on favorable terms upon lease expiration or early termination. In addition, in evaluating property sales, we take into account, among other things, the property type (i.e., industrial, retail or other), our perception of the property’s long-term
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prospects (including the likelihood for, and the extent of, any further appreciation or diminution in value), the term remaining on the related lease and mortgage debt, the price and other terms and conditions for the sale of such property and the returns anticipated to be generated from the reinvestment of the net proceeds to us from such property sale.
Our 2026 base rent is approximately $77.4 million and represents, after giving effect to any abatements, concessions, deferrals or adjustments, the base rent (excluding tenant reimbursements) payable to us during the twelve months ending September 30, 2026 under leases in effect at September 30, 2025.
Our 2026 base rent:
| ● | excludes $103,000 representing the 2026 base rent of a retail property in Port Clinton, Ohio which is anticipated to be sold during the three months ending December 31, 2025. |
| ● | includes $235,000 of base rent from Hooters, a restaurant tenant at our Myrtle Beach, South Carolina property which filed for bankruptcy protection in April 2025. |
The following table sets forth information about our properties by industry sector as of September 30, 2025:
| | | | | | | | |
|
| |
| | |
| |
|
| | Number of | | | | | Percentage of |
|
Type of Property | | Properties | | 2026 Base Rent | | 2026 Base Rent |
| |
Industrial | | 61 | | $ | 61,538,000 |
| 79.6 | |
Retail (a) | | 31 | |
| 11,934,000 |
| 15.4 | |
Other (b) | | 6 | |
| 3,886,000 |
| 5.0 | |
|
| 98 | | $ | 77,358,000 |
| 100.0 | |
| (a) | Includes Retail-Furniture which accounts for $3.1 million, or 4.1%, and Retail-Office Supply which accounts for $642,000, or 0.8%. |
| (b) | Includes an office, two theaters, a health and fitness center, a restaurant and The Vue Apartments. |
The following table sets forth scheduled expirations of leases at our properties as of September 30, 2025 for the years indicated below:
| | | | | | | | | |
| | | | Approximate | | | | Percentage of | |
| | Number of | | Square Footage | | 2026 Base Rent | | 2026 Base Rent | |
Lease Expiration (a) | | Expiring | | Subject to | | Under | | Represented by | |
12 Months Ending September 30, |
| Leases |
| Expiring Leases (b) |
| Expiring Leases |
| Expiring Leases | |
2026 |
| 4 | | 187,595 | | $ | 682,000 | | 0.9 |
2027 |
| 27 | | 2,075,730 | |
| 13,568,000 | | 17.5 |
2028 |
| 22 | | 1,474,349 | |
| 9,744,000 | | 12.6 |
2029 |
| 16 | | 1,650,255 | |
| 10,534,000 | | 13.6 |
2030 |
| 21 | | 1,401,195 | |
| 10,986,000 | | 14.2 |
2031 |
| 17 | | 1,792,800 | |
| 12,064,000 | | 15.6 |
2032 |
| 7 | | 729,994 | |
| 4,604,000 | | 6.0 |
2033 |
| 12 | | 1,011,989 | |
| 9,922,000 | | 12.8 |
2034 |
| 5 | | 207,607 | |
| 2,094,000 | | 2.7 |
2035 | | 3 | | 25,217 | | | 233,000 | | 0.3 |
2036 and thereafter |
| 5 | | 847,659 | |
| 2,927,000 | | 3.8 |
|
| 139 |
| 11,404,390 | | $ | 77,358,000 |
| 100.0 |
| (a) | Lease expirations assume tenants do not exercise existing renewal or termination options. |
| (b) | Excludes an aggregate of 206,761 square feet of vacant space. |
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Property Transactions
Acquisition during the three months ended September 30, 2025
On August 27, 2025, we acquired a 210,600 square foot, single-tenant industrial property located in Blythewood, South Carolina for $24.0 million, incurred $87,000 of transaction costs that were capitalized and simultaneously obtained new mortgage debt of $14.0 million bearing an interest rate of 5.77% (interest only through maturity) and maturing in 2030 (see Note 4 to our consolidated financial statements). We estimate that commencing October 1, 2025, the quarterly rental income (excluding variable lease revenues), depreciation and amortization expense and mortgage interest expense from this property will be $405,000, $223,000 and $202,000, respectively.
Sales during the three months ended September 30, 2025
We sold the following properties (amounts in thousands):
| | | | | | | | | | | | | | | |
| | | | | | Gross | | Gain on | | | Net | | |||
| | | | | | Sales | | Sale of Real | | | Proceeds | | |||
Description of Property | | City, State | | Date Sold | | Price | | Estate, net | | | on Sale | | |||
Land parcel (a) | | Lakewood, Colorado | | July 15, 2025 | | $ | 3,457 | | $ | 2,849 | (a) | | $ | 2,755 | (a) |
Office Depot retail property | | Eugene, Oregon | | August 1, 2025 | | | 6,000 | | | 2,497 | | | | 5,685 | |
Blue Pearl Veterinary hospital | | Newark, Delaware | | September 8, 2025 | | | 6,774 | | | 3,236 | | | | 5,389 | (b) |
Vacant retail property | | Bolingbrook, Illinois | | September 25, 2025 | | | 2,600 | | | 489 | | | | 2,459 | |
| | | | | | $ | 18,831 | | $ | 9,071 | | | $ | 16,288 | |
| (a) | This parcel was owned through a consolidated joint venture in which we held a 90% interest; the non-controlling interest’s share of the gain was $641. The net proceeds on sale give effect to the non-controlling interest’s $800 share. |
| (b) | The net proceeds on sale give effect to the payoff of the $966 mortgage on this property. |
On August 26, 2025, we and our joint venture partners sold the last two remaining unconsolidated joint venture properties in Savannah, Georgia for an aggregate of $4.6 million, net of closing costs. Our 50% share of the (i) gain from these sales was $991,000, which is recorded as Equity in earnings from sale of unconsolidated joint venture properties on the consolidated statements of income for the three and nine months ended September 30, 2025, and (ii) net proceeds was $2.4 million.
Properties held-for-sale and Impairment loss at September 30, 2025
On September 9, 2025, we entered into a contract to sell a retail property located in Port Clinton, Ohio for $1.3 million. It is anticipated that the (i) property will be sold during the fourth quarter of 2025, (ii) net proceeds on sale will be approximately $500,000, after repaying approximately $700,000 of mortgage debt on the property, and (iii) sale will result in a gain of approximately $200,000, which will be recognized as Gain on sale of real estate, net, in the consolidated statement of income for the year-ending December 31, 2025.
On September 10, 2025, we and our ground lease tenant entered into a contract to sell the entire collective interest in The Vue Apartments, a multi-family property located in Beachwood, Ohio (see Notes 5 and 7 to our consolidated financial statements). We had not generated any revenue from this property since 2020. In connection with the sale, we recorded an impairment charge of $1.3 million during the three and nine months ended September 30, 2025. The property was sold on November 4, 2025 and the net proceeds to us will be approximately $16.4 million. On October 30, 2025, we entered into an agreement pursuant to which we are to receive $1.3 million in connection with the settlement of a lawsuit with respect to this property which will be recognized on the consolidated statement of income for the year ending December 31, 2025 (see Note 15 to our consolidated financial statements). We expect to receive these settlement proceeds in November 2025. We anticipate (i) using the proceeds from this sale and the settlement of this litigation to fund acquisitions, including the proposed acquisition of the Pittsburgh Portfolio (as defined), and for general working capital purposes and (ii) investing such proceeds in short-term government securities until such proceeds are applied for the foregoing or other purposes.
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Acquisition-related transactions subsequent to September 30, 2025
On October 13, 2025, we entered into a contract to acquire a 397,440 square foot, six-building, multi-tenant industrial property (the “Pittsburgh Portfolio”) located in Sewickley, Pennsylvania, part of the Pittsburgh MSA, for $53.5 million. In connection with the acquisition, we anticipate obtaining new mortgage debt of approximately $32.4 million bearing an interest rate of 5.45% (interest only for five years) and maturing in 2032. We anticipate paying the balance of the purchase price from our available cash, including the net proceeds from property sales and, if needed, our line of credit. We estimate the annual base rent will be approximately $3.4 million (with annual base rent increases ranging from 2.0% to 3.0%) and anticipate the closing will occur during the three months ending December 31, 2025.
On October 30, 2025, we acquired a 199,919 square foot, single-tenant industrial property located in Oakdale, Minnesota for $23.0 million. We obtained new mortgage debt on the property of approximately $13.8 million bearing an interest rate of 5.10% (interest only until maturity) and maturing in 2030. We estimate the annual base rent will be approximately $1.5 million (with annual base rent increases of 4.0%).
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Results of Operations
Total revenues
The following table compares total revenues for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | | | | | | Nine Months Ended | | | | | | ||||||||
| | September 30, | | Increase | | | | September 30, | | Increase | | | ||||||||||
(Dollars in thousands) |
| 2025 |
| 2024 |
| (Decrease) |
| % Change |
| 2025 |
| 2024 |
| (Decrease) |
| % Change | ||||||
Rental income, net | | $ | 23,771 | | $ | 22,211 | | $ | 1,560 |
| 7.0 | | $ | 72,420 | | $ | 66,457 | | $ | 5,963 |
| 9.0 |
Lease termination fees | | | — | | | — | | | — |
| — | | | 66 | | | 250 | | | (184) |
| (73.6) |
Total revenues | | $ | 23,771 | | $ | 22,211 | | $ | 1,560 |
| 7.0 | | $ | 72,486 | | $ | 66,707 | | $ | 5,779 |
| 8.7 |
Rental income, net
The following table details the components of rental income, net, for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | | | | | | Nine Months Ended | | | | | | ||||||||
| | September 30, | | Increase | | | | September 30, | | Increase | | | ||||||||||
(Dollars in thousands) |
| 2025 |
| 2024 |
| (Decrease) |
| % Change |
| 2025 |
| 2024 |
| (Decrease) |
| % Change | ||||||
Acquisitions (a) | | $ | 3,231 | | $ | 580 | | $ | 2,651 | | 457.1 | | $ | 8,454 | | $ | 739 | | $ | 7,715 | | 1,044.0 |
Dispositions (b) | | | 54 | | | 1,389 | | | (1,335) | | (96.1) | | | 1,999 | | | 5,363 | | | (3,364) | | (62.7) |
Same store (c) | | | 20,486 | | | 20,242 | | | 244 | | 1.2 | | | 61,967 | | | 60,355 | | | 1,612 | | 2.7 |
Rental income, net | | $ | 23,771 | | $ | 22,211 | | $ | 1,560 | | 7.0 | | $ | 72,420 | | $ | 66,457 | | $ | 5,963 | | 9.0 |
| (a) | Represents rental income from eight properties acquired since January 1, 2024. |
| (b) | Represents rental income from 17 properties sold since January 1, 2024. |
| (c) | Represents rental income from 90 properties that were owned for the entirety of the periods presented. |
Changes at same store properties
The changes in same store rental income during the three and nine months ended September 30, 2025 are due primarily to increases of:
| - | $410,000 and $1.1 million, respectively, from lease amendments and/or extensions at several properties, |
| - | $335,000 and $861,000, respectively, due to new tenants at several properties, and |
| - | $236,000 and $1.1 million, respectively, in tenant reimbursements, of which $154,000 and $634,000, respectively, relates to the reimbursement of real estate tax expense generally incurred during the applicable period. |
The increases were offset during the three and nine months ended September 30, 2025 by decreases in rental income of $652,000 and $1.3 million, respectively, from lease expirations at various properties.
Lease Termination Fees
In the nine months ended September 30, 2025, we recognized a lease termination fee of $66,000 from an industrial tenant in a lease buy-out transaction. The space was simultaneously re-leased to a new industrial tenant. In the nine months ended September 30, 2024, a consolidated joint venture in Lakewood, Colorado, in which we held a 90% interest, received a lease termination fee of $250,000 due to the early termination of a lease in connection with the sale of the related restaurant parcel.
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Operating Expenses
The following table compares operating expenses for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | | | | | | Nine Months Ended | | | | | | ||||||||
| | September 30, | | Increase | | | | September 30, | | Increase | | | ||||||||||
(Dollars in thousands) |
| 2025 |
| 2024 |
| (Decrease) |
| % Change |
| 2025 |
| 2024 |
| (Decrease) |
| % Change | ||||||
Operating expenses: |
| |
|
| |
|
| |
|
|
|
| |
|
| |
|
| |
|
|
|
Depreciation and amortization | | $ | 6,698 | | $ | 6,133 | | $ | 565 |
| 9.2 | | $ | 20,070 | | $ | 18,119 | | $ | 1,951 |
| 10.8 |
Real estate expenses | |
| 4,824 | |
| 4,231 | |
| 593 |
| 14.0 | |
| 14,753 | |
| 12,677 | |
| 2,076 |
| 16.4 |
General and administrative | |
| 4,128 | |
| 3,886 | |
| 242 |
| 6.2 | |
| 12,236 | |
| 11,585 | |
| 651 |
| 5.6 |
Impairment loss | | | 1,300 | | | — | | | 1,300 | | n/a | | | 1,300 | | | 1,086 | | | 214 | | 19.7 |
State tax expense | |
| 29 | |
| 74 | |
| (45) |
| (60.8) | |
| 2 | |
| 184 | |
| (182) |
| (98.9) |
Total operating expenses | | $ | 16,979 | | $ | 14,324 | | $ | 2,655 |
| 18.5 | | $ | 48,361 | | $ | 43,651 | | $ | 4,710 |
| 10.8 |
Depreciation and amortization. The increases in the three and nine months ended September 30, 2025 are due primarily to (i) $1.1 million and $3.3 million, respectively, from the properties acquired since January 1, 2024, and (ii) in the nine months ended September 30, 2025, $321,000 from improvements at several properties.
The increases were offset during the three and nine months ended September 30, 2025 primarily by (i) the inclusion, in the corresponding 2024 periods, of $358,000 and $972,000, respectively, from the properties sold since January 1, 2024, and (ii) decreases of $264,000 and $684,000, respectively, related to tenant origination costs at several properties that prior to September 30, 2025 were fully amortized.
Real estate expenses. The increases in the three and nine months ended September 30, 2025 are due primarily to (i) $522,000 and $1.3 million, respectively, from the properties acquired since January 1, 2024, (ii) $370,000 and $1.0 million, respectively, related to real estate taxes at several properties, and (iii) in the nine months ended September 30, 2025, $505,000 related to common area maintenance and insurance expense at several properties, none of which were individually significant.
The increase was offset by the inclusion, in the corresponding 2024 periods, of $387,000 and $787,000, respectively, from the properties sold since January 1, 2024.
A substantial portion of real estate expenses is rebilled to tenants and is included in Rental income, net, on the consolidated statements of income.
General and administrative. The increases (i) in the three and nine months ended September 30, 2025 are due primarily to increases of non-cash expense of $151,000 and $354,000, respectively, primarily from the re-assessment of the achievability of performance metrics related to the RSUs, and (ii) of $153,000 for the nine months ended September 30, 2025, is primarily due to higher levels of payroll and payroll-related expenses.
Impairment loss. During the three and nine months ended September 30, 2025, we recorded a $1.3 million impairment loss at our Beachwood, Ohio property. During the nine months ended September 30, 2024, we recorded a $1.1 million impairment loss at our former Hamilton, Ohio property. (See Note 5 to our consolidated financial statements).
State tax expense. During the nine months ended September 30, 2025, our state tax expense was offset by a $135,000 refund from Tennessee related to franchise taxes paid in 2023, as the state amended the method of calculating such taxes, resulting in an overpayment in 2023.
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Gain on sale of real estate, net
The following table compares gain on sale of real estate, net for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | | | | | | Nine Months Ended | | | | | | ||||||||
| | September 30, | | Increase | | | | September 30, | | Increase | | | ||||||||||
(Dollars in thousands) |
| 2025 |
| 2024 |
| (Decrease) |
| % Change |
| 2025 |
| 2024 |
| (Decrease) |
| % Change | ||||||
Gain on sale of real estate, net | | $ | 9,071 | | $ | 2,115 | | $ | 6,956 |
| 328.9 | | $ | 16,712 | | $ | 11,347 | | $ | 5,365 |
| 47.3 |
The following table lists the sold properties and the related gains, net, for the periods indicated:
| | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
(Dollars in thousands) |
| 2025 |
| 2024 | | 2025 |
| 2024 | ||||
Land parcel - Lakewood, Colorado (a) | | $ | 2,849 | | $ | — | | $ | 2,849 | | $ | — |
Retail property - Eugene, Oregon | | | 2,497 | | | — | | | 2,497 | | | — |
Veterinary hospital - Newark, Delaware | | | 3,236 | | | — | | | 3,236 | | | — |
Vacant retail property - Bolingbrook, Illinois | | | 489 | | | — | | | 489 | | | — |
Multi-tenant retail stores - Lakewood, Colorado (b) | | | — | | | — | | | 3,276 | | | — |
Retail property - Greensboro, North Carolina | | | — | | | — | | | 2,232 | | | — |
Retail property - Gurnee, Illinois | | | — | | | — | | | 1,023 | | | — |
Restaurant property - Concord, North Carolina | | | — | | | — | | | 1,154 | | | — |
Land and improvements - Lakewood, Colorado (c) | | | — | | | — | | | (44) | | | — |
Vacant health and fitness property - Hamilton, Ohio | | | — | | | 17 | | | — | | | 17 |
Vacant industrial property - Wauconda, Illinois | | | — | | | 1,177 | | | — | | | 1,177 |
Retail property - Woodbury, Minnesota | | | — | | | 921 | | | — | | | 921 |
Restaurant parcel - Lakewood, Colorado (d) | | | — | | | — | | | — | | | 1,784 |
Restaurant property - Kennesaw, Georgia | | | — | | | — | | | — | | | 964 |
Industrial property - Miamisburg, Ohio | | | — | | | — | | | — | | | 1,507 |
Retail property - Wichita, Kansas | | | — | | | — | | | — | | | 1,884 |
Retail property - Lawrence, Kansas | | | — | | | — | | | — | | | 43 |
Retail property - Cape Girardeau, Missouri (e) | | | — | | | — | | | — | | | 978 |
Vacant retail property - Kennesaw, Georgia | | | — | | | — | | | — | | | 2,072 |
Total Gain on sale of real estate, net | | $ | 9,071 | | $ | 2,115 | | $ | 16,712 | | $ | 11,347 |
| (a) | A multi-tenant shopping center in Lakewood, Colorado, which was owned through a consolidated joint venture in which we held a 90% interest (the “Colorado JV”), sold a land parcel at this property. The non-controlling interest’s share of this gain was $641. |
| (b) | The Colorado JV sold the multi-tenant, in-line retail stores at this property. In connection with this sale, the joint venture paid off the $5,808 mortgage balance on the property. The non-controlling interest’s share of this gain was $972. |
| (c) | The Colorado JV sold a land parcel and the related parking lot in connection with the sale of the restaurant parcel in (d) below. The non-controlling interest’s share of the loss was $4. |
| (d) | This restaurant parcel was part of the Colorado JV. The non-controlling interest’s share of this gain was $178. |
| (e) | This property was owned through a consolidated joint venture in which we had a 95% interest. The non-controlling interest’s share of this gain was $105. |
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Other Income and Expenses
The following table compares other income and expenses for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | | | | | | Nine Months Ended | | | | | | ||||||||
| | September 30, | | Increase | | % | | September 30, | | Increase | | % | ||||||||||
(Dollars in thousands) |
| 2025 |
| 2024 |
| (Decrease) |
| Change |
| 2025 |
| 2024 |
| (Decrease) |
| Change | ||||||
Other income and expenses: | | | | | | | | | | | | | | | | | | | | | | |
Equity in earnings (loss) of unconsolidated joint ventures | | $ | 24 | | $ | (9) | | $ | 33 | | (366.7) | | $ | 100 | | $ | 87 | | $ | 13 | | 14.9 |
Equity in earnings from sale of unconsolidated joint venture properties | | | 991 | | | — | | | 991 | | n/a | | | 991 | | | — | | | 991 | | n/a |
Other income | | | 85 | | | 353 | | | (268) | | (75.9) | | | 411 | | | 896 | | | (485) | | (54.1) |
Interest: | | | | | | | | | | | | | | | | | | | | | | |
Expense | | | (5,617) | | | (4,932) | | | 685 | | 13.9 | | | (16,896) | | | (14,399) | | | 2,497 | | 17.3 |
Amortization and write-off of deferred financing costs | | | (241) | | | (225) | | | 16 | | 7.1 | | | (751) | | | (741) | | | 10 | | 1.3 |
Equity in earnings from sale of unconsolidated joint venture properties. The three and nine months ended September 30, 2025 include our 50% share of the gain on the sales of our two Savannah, Georgia joint venture properties which were sold in August 2025. (See Note 6 to our consolidated financial statements).
Other income. The three and nine months ended September 30, 2025 primarily reflect decreases in interest income from less amounts invested in short-term U.S. treasury bills.
Interest expense. The following table compares interest expense for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | | | | | | Nine Months Ended | | | | | | ||||||||
| | September 30, | | Increase | | % | | September 30, | | Increase | | % | ||||||||||
(Dollars in thousands) |
| 2025 |
| 2024 |
| (Decrease) |
| Change | | 2025 |
| 2024 |
| (Decrease) |
| Change | ||||||
Interest expense: | | |
|
| |
|
| |
|
|
| | |
|
| |
|
| |
|
|
|
Mortgage interest | | $ | 5,544 | | $ | 4,868 | | $ | 676 |
| 13.9 | | $ | 16,508 | | $ | 14,210 | | $ | 2,298 |
| 16.2 |
Credit line interest | | | 73 | | | 64 | | | 9 |
| 14.1 | | | 388 | | | 189 | | | 199 |
| 105.3 |
Total | | $ | 5,617 | | $ | 4,932 | | $ | 685 |
| 13.9 | | $ | 16,896 | | $ | 14,399 | | $ | 2,497 |
| 17.3 |
Mortgage interest
The following table reflects the average interest rate on the average principal amount of outstanding mortgage debt for the periods indicated:
| | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | | | | | | Nine Months Ended | | | | | | ||||||||
| | September 30, | | Increase | | % | | September 30, | | Increase | | % | ||||||||||
(Dollars in thousands) |
| 2025 |
| 2024 |
| (Decrease) |
| Change | | 2025 |
| 2024 |
| (Decrease) |
| Change | ||||||
Weighted average principal amount | | $ | 456,187 | | $ | 428,583 | | $ | 27,604 |
| 6.4 | | $ | 459,835 | | $ | 424,261 | | $ | 35,574 |
| 8.4 |
Weighted average interest rate | | | 4.79 | % | | 4.51 | % | | 0.28 | % | 6.2 | | | 4.74 | % | | 4.43 | % | | 0.31 | % | 7.1 |
The increases in mortgage interest in the three and nine months ended September 30, 2025 are due to increases in the weighted average principal amount of mortgage debt outstanding and the weighted average interest rate.
We anticipate that our mortgage interest expense will increase (and our earnings and the amount we are required to distribute to stockholders to maintain our REIT status may decrease) as we refinance our mortgages maturing through 2027 because current comparable mortgage interest rates are generally higher than the weighted average interest rate on such maturing mortgages. The weighted average interest rate of (i) our mortgages maturing in the three months ending December 31, 2025 and for the years ending December 31, 2026 and 2027 is 3.78%, 3.91% and 3.64%, respectively, and (ii) the mortgages we obtained in connection with the acquisitions completed during the nine months ended September 30, 2025 is 6.11%.
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Credit line interest
The Company paid off the principal balance outstanding on the credit facility in July 2025. The weighted average principal amount outstanding was $4.5 million and the weighted average interest rate was 6.07% for the nine months ended September 30, 2025.
There was no balance outstanding on the credit line during the three and nine months ended September 30, 2024. The interest expense of $64,000 and $189,000 for the three and nine months ended September 30, 2024, respectively, constitutes the unused facility fee.
Liquidity and Capital Resources
Our sources of liquidity and capital include cash flow from operations, cash and cash equivalents, borrowings under our credit facility, refinancing existing mortgage loans, obtaining mortgage loans secured by our unencumbered properties, issuance of our equity securities and property sales. Our available liquidity at October 31, 2025, was $109.4 million, including $9.4 million of cash and cash equivalents (including the credit facility’s required minimum $3.0 million average deposit maintenance balance) and up to $100.0 million available under our credit facility. At October 31, 2025, the facility is available for the acquisition of commercial real estate, repayment of mortgage debt, and up to $40.0 million for renovation and operating expense purposes.
Liquidity and Financing
We expect to meet our short-term (i.e., one year or less) and long-term (i) operating cash requirements (including debt service and anticipated dividend payments) principally from cash flow from operations, our available cash and cash equivalents, proceeds from and, to the extent permitted and needed, our credit facility and (ii) investing and financing cash requirements (including an estimated aggregate of $3.0 million of capital expenditures) from the foregoing, as well as property financings, property sales and sales of our common stock.
At September 30, 2025, we had 59 outstanding mortgages payable secured by 61 properties in the aggregate principal amount of $463.1 million (before netting unamortized deferred financing costs of $3.9 million and mortgage intangibles of $564,000). These mortgages represent first liens on individual real estate investments with an aggregate carrying value of $723.8 million, before accumulated depreciation of $130.5 million. After giving effect to interest rate swap agreements, the mortgage payments bear interest at fixed rates ranging from 3.05% to 6.42% (a 4.79% weighted average interest rate) and mature between 2025 and 2047 (a 6.0 year weighted average remaining term to maturity).
The following table sets forth, as of September 30, 2025, information with respect to our mortgage debt:
| | | | | | | | | | | | | | | | |
| | For the Three | | | | | | | | | | | | | | |
| | Months Ending | | For the Years Ending | | | | | ||||||||
| | December 31, | | December 31, | | | | | ||||||||
(Dollars in thousands) |
| 2025 |
| 2026 | | 2027 |
| 2028 | | Total |
| |||||
Amortization payments | | $ | 2,772 | | $ | 10,912 | | $ | 9,866 | | $ | 9,215 | | $ | 32,765 | |
Principal due at maturity | |
| 3,721 | |
| 18,461 | |
| 38,525 | |
| 30,155 | |
| 90,862 | |
Total | | $ | 6,493 | | $ | 29,373 | | $ | 48,391 | | $ | 39,370 | | $ | 123,627 | |
| | | | | | | | | | | | | | | | |
Weighted average interest rate on principal due at maturity | | | 3.78 | % | | 3.91 | % | | 3.64 | % | | 4.64 | % | | 4.03 | % |
(1)
We intend to make debt amortization payments from operating cash flow and, although no assurance can be given that we will be successful in this regard, generally intend to refinance, extend or pay off the mortgage loans which mature from 2025 through 2028. We generally intend to repay the amounts not refinanced or extended from our existing funds and sources of funds, including our available cash, proceeds from the sale of our common stock and our credit facility (to the extent available).
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We continually seek to refinance existing mortgage loans on terms we deem acceptable to generate additional liquidity. Additionally, in the normal course of our business, we sell properties when we determine that it is in our best interests, which also generates additional liquidity. Further, although we have done so infrequently and primarily in the context of a tenant default at a property for which we have not found a replacement tenant, if we believe we have negative equity in a property subject to a non-recourse mortgage loan, we may convey such property to the mortgagee to terminate our mortgage obligations, including payment of interest, principal and real estate taxes, with respect to such property.
Typically, we utilize funds from our credit facility to acquire a property and, thereafter secure long-term, fixed rate mortgage debt on such property. We apply the proceeds from the mortgage loan to repay borrowings under the credit facility, thus providing us with the ability to re-borrow under the credit facility for the acquisition of additional properties.
Credit Facility
Our credit facility provides that subject to borrowing base requirements, we can borrow up to $100.0 million for the acquisition of commercial real estate, repayment of mortgage debt, and renovation and operating expense purposes; provided, that if used for renovation and operating expense purposes, the amount outstanding for such purposes will not exceed the lesser of $40.0 million and 40% of the borrowing base. The facility matures December 31, 2026 and bears interest equal to 30-day SOFR plus the applicable margin. The applicable margin ranges from 175 basis points if our ratio of total debt to total value (as calculated pursuant to the facility) is equal to or less than 50%, increasing to a maximum of 275 basis points if such ratio is greater than 60%. The applicable margin was 175 basis points for each of the nine months ended September 30, 2025 and 2024. There is an unused facility fee of 0.25% per annum on the difference between the outstanding loan balance and $100.0 million. The credit facility requires the maintenance of $3.0 million in average deposit balances. The interest rate on the facility was 6.03% and 5.88% at September 30, 2025 and October 31, 2025.
The terms of our credit facility include certain restrictions and covenants which may limit, among other things, the incurrence of liens, and which require compliance with financial ratios relating to, among other things, the minimum amount of tangible net worth, the minimum amount of debt service coverage, the minimum amount of fixed charge coverage, the maximum amount of debt to value, the minimum level of net income, certain investment limitations and the minimum value of unencumbered properties and the number of such properties. Net proceeds received from the sale, financing or refinancing of properties are generally required to be used to repay amounts outstanding under our credit facility. At September 30, 2025, we were in compliance with the covenants under this facility.
Application of Critical Accounting Estimates
A complete discussion of our critical accounting estimates is included in our Annual Report. There have been no changes in such estimates.
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Funds from Operations and Adjusted Funds from Operations
We compute funds from operations, or 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 GAAP), 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, we do not add back to net income the amortization of costs in connection with our financing activities or depreciation of non-real estate assets.
We compute adjusted funds from operations, or AFFO, by adjusting FFO for straight-line rent accruals and amortization of lease intangibles, deducting from income (i) additional rent from a ground lease tenant, (ii) income on settlement of litigation, (iii) income on insurance recoveries from casualties, (iv) lease termination and assignment fees, and adding back to income (i) amortization of restricted stock and restricted stock unit compensation expense, (ii) amortization of costs in connection with its financing activities (including its share of its unconsolidated joint ventures), (iii) debt prepayment costs, (iv) amortization of lease incentives and (v) mortgage intangible assets. Since the NAREIT White Paper does not provide guidelines for computing AFFO, the computation of AFFO varies from one REIT to another.
We believe 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, we believe 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. We also consider FFO and AFFO to be useful to us in evaluating potential property acquisitions.
FFO and AFFO do not represent net income or cash flows from operations as defined by GAAP. FFO and AFFO and should not be considered to be an alternative to net income as a reliable measure of our operating performance; nor should FFO and AFFO be considered an alternative to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity. FFO and AFFO do not measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization, capital improvements and distributions to stockholders.
Management recognizes that there are limitations in the use of FFO and AFFO. In evaluating our performance, management is careful to examine GAAP measures such as net income and cash flows from operating, investing and financing activities.
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The tables below provide a reconciliation of net income and net income per common share (on a diluted basis) in accordance with GAAP to FFO and AFFO for the periods indicated (dollars in thousands, except per share amounts):
| | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
|
| 2025 | | 2024 |
| 2025 |
| 2024 | ||||
GAAP net income attributable to One Liberty Properties, Inc. | | $ | 10,478 | | $ | 5,177 | | $ | 23,064 | | $ | 19,885 |
Add: depreciation and amortization of properties | |
| 6,492 | | | 5,921 | | | 19,437 | | | 17,524 |
Add: our share of depreciation and amortization of unconsolidated joint ventures | |
| 5 | | | 6 | | | 18 | | | 16 |
Add: impairment loss | | | 1,300 | | | — | | | 1,300 | | | 1,086 |
Add: amortization of deferred leasing costs | |
| 206 | | | 212 | | | 633 | | | 595 |
Add: our share of amortization of deferred leasing costs of unconsolidated joint ventures | |
| 1 | | | 11 | | | 3 | | | 12 |
Deduct: gain on sale of real estate, net | |
| (9,071) | |
| (2,115) | |
| (16,712) | |
| (11,347) |
Deduct: equity in earnings from sale of unconsolidated joint venture properties | |
| (991) | |
| — | |
| (991) | |
| — |
Adjustments for non-controlling interests | |
| 637 | | | (19) | | | 1,573 | | | 227 |
NAREIT funds from operations applicable to common stock | |
| 9,057 | |
| 9,193 | |
| 28,325 | |
| 27,998 |
Deduct: straight-line rent accruals and amortization of lease intangibles | |
| (650) | | | (836) | | | (1,909) | | | (2,006) |
Adjust: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures | |
| (4) | | | 30 | | | (32) | | | 27 |
Deduct: lease termination fees | | | — | | | — | | | (66) | | | (250) |
Deduct: other income and income on settlement of litigation | | | (27) | | | (27) | | | (82) | | | (82) |
Add: amortization of restricted stock and RSU compensation | |
| 1,399 | |
| 1,248 | |
| 4,041 | | | 3,687 |
Add: amortization and write-off of deferred financing costs | |
| 241 | |
| 225 | |
| 751 | | | 741 |
Add: amortization of lease incentives | | | 24 | | | 30 | | | 83 | | | 90 |
Add: amortization of mortgage intangible assets | | | 34 | | | 34 | | | 103 | | | 103 |
Adjustments for non-controlling interests | |
| (2) | | | 2 | | | (11) | | | 30 |
Adjusted funds from operations applicable to common stock | | $ | 10,072 | | $ | 9,899 | | $ | 31,203 | | $ | 30,338 |
| | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended | ||||||||
| | September 30, | | September 30, | ||||||||
|
| 2025 |
| 2024 |
| 2025 |
| 2024 | ||||
GAAP net income attributable to One Liberty Properties, Inc. | | $ | .48 | | $ | .23 | | $ | 1.05 | | $ | .91 |
Add: depreciation and amortization of properties | |
| .31 | | | .29 | | | .90 | | | .83 |
Add: our share of depreciation and amortization of unconsolidated joint ventures | |
| — | | | — | | | — | | | — |
Add: impairment loss | | | .06 | | | — | | | .06 | | | .05 |
Add: amortization of deferred leasing costs | |
| .01 | | | .01 | | | .03 | | | .03 |
Add: our share of amortization of deferred leasing costs of unconsolidated joint ventures | |
| — | | | — | | | — | | | — |
Deduct: gain on sale of real estate, net | |
| (.42) | | | (.10) | | | (.77) | | | (.53) |
Deduct: equity in earnings from sale of unconsolidated joint venture properties | | | (.05) | | | — | | | (.05) | | | — |
Adjustments for non-controlling interests | |
| .03 | | | — | | | .08 | | | .01 |
NAREIT funds from operations per share of common stock (a) | |
| .42 | |
| .43 | |
| 1.30 | |
| 1.30 |
Deduct: straight-line rent accruals and amortization of lease intangibles | |
| (.03) | | | (.04) | | | (.08) | | | (.08) |
Adjust: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures | |
| — | | | — | | | — | | | — |
Deduct: lease termination fees | | | — | | | — | | | — | | | (.01) |
Deduct: other income and income on settlement of litigation | | | — | | | — | | | — | | | — |
Add: amortization of restricted stock and RSU compensation | | | .06 | | | .06 | | | .19 | | | .17 |
Add: amortization and write-off of deferred financing costs | | | .01 | | | .01 | | | .03 | | | .03 |
Add: amortization of lease incentives | | | — | | | — | | | — | | | — |
Add: amortization of mortgage intangible assets | | | — | | | — | | | — | | | — |
Adjustments for non-controlling interests | |
| — | | | — | | | — | | | — |
Adjusted funds from operations per share of common stock (a) | | $ | .46 | | $ | .46 | | $ | 1.44 | | $ | 1.41 |
| (a) | The weighted average number of diluted common shares used to compute FFO and AFFO applicable to common stock includes unvested restricted shares that are excluded from the computation of diluted EPS. |
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Three months ended September 30, 2025 and 2024
The $136,000, or 1.5%, decrease in FFO for the three months ended September 30, 2025 from the corresponding 2024 period is due primarily to a:
| ● | $685,000 increase in interest expense, |
| ● | $593,000 increase in real estate operating expenses, |
| ● | $268,000 decrease in other income, and |
| ● | $242,000 increase in general and administrative expenses. |
Offsetting the decrease is a $1.6 million increase in rental income, net.
The $173,000, or 1.7%, increase in AFFO for the three months ended September 30, 2025 from the corresponding 2024 period is due primarily to the factors impacting FFO as described immediately above, including a (i) $180,000 increase (to $1.7 million) in rental income, net, due to the exclusion of the amortization of straight line rent and lease-related intangibles and (ii) $151,000 decrease (to $91,000) in general and administrative expenses due to the exclusion of the amortization of restricted stock and RSU compensation.
See “—Results of Operations” for further information regarding these changes.
Nine months ended September 30, 2025 and 2024
The $327,000, or 1.2%, increase in FFO for the nine months ended September 30, 2025 from the corresponding 2024 period is due primarily to a:
| ● | $6.0 million increase in rental income, net, and |
| ● | $182,000 decrease in state tax expense. |
Offsetting the increase is a:
| ● | $2.5 million increase in interest expense, |
| ● | $2.1 million increase in real estate operating expenses, |
| ● | $651,000 increase in general and administrative expenses, |
| ● | $485,000 decrease in other income, and |
| ● | $184,000 decrease in lease termination fee income. |
The $865,000, or 2.9%, increase in AFFO for the nine months ended September 30, 2025 from the corresponding 2024 period is primarily due to the factors impacting FFO as described immediately above, including a $354,000 decrease (to $297,000) in general and administrative expenses due to the exclusion of the amortization of restricted stock and RSU compensation and excluding the $184,000 decrease in lease termination fee income.
See “—Results of Operations” for further information regarding these changes.
Diluted per share net income, FFO and AFFO were impacted negatively in the three and nine months ended September 30, 2025 compared to the corresponding quarter in the prior year by an average increase of approximately 214,000 and 248,000, respectively, 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.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our primary market risk exposure is the effect of changes in interest rates on the interest cost of draws on our revolving variable rate credit facility and the effect of changes in the fair value of our interest rate swap agreements. Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control.
We use interest rate swaps to limit interest rate risk on substantially all variable rate mortgages. These swaps are used for hedging purposes - not for speculation. We do not enter into interest rate swaps for trading purposes. At September 30, 2025, we had no liability in the event of the early termination of our swaps.
At September 30, 2025, we had four interest rate swap agreements outstanding. The fair market value of the interest rate swaps is dependent upon existing market interest rates and swap spreads, which change over time. As of September 30, 2025, if there had been an increase of 100 basis points in forward interest rates, the fair market value of the interest rate swaps and the net unrealized gain on derivative instruments would have increased by $18,000. If there were a decrease of 100 basis points in forward interest rates, the fair market value of the interest rate swaps and the net unrealized gain on derivative instruments would have decreased by $18,000. These changes would not have any impact on our net income or cash.
Our variable mortgage debt, after giving effect to the interest rate swap agreements, primarily bears interest at fixed rates and accordingly, the effect of changes in interest rates would not impact the interest expense we incur under these mortgages.
The fair market value of our long-term debt is estimated based on discounting future cash flows at interest rates that our management believes reflect the risks associated with long-term debt of similar risk and duration.
Item 4. Controls and Procedures
Based on their evaluation as of the end of the period covered by this report, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are effective.
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) promulgated under the Exchange Act) during the three months ended September 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On October 30, 2025, in connection with the sale of the Beachwood, Ohio property, we entered into an agreement pursuant to which we are to receive $1.3 million in connection with the settlement of the lawsuit captioned Eastgate LLC, et al. v. OLP Beachwood OH LLC, more fully described in our Annual Report on Form 10-K for the year ended December 31, 2024 under the caption “Item 3. Legal Proceedings”. We expect to receive the settlement proceeds in November 2025.
Item 5. Other Information
Disclosure of 10b5-1 Plans
Impact of the One Big Beautiful Bill Act on the Company and its Stockholders
The discussion under " Federal Income Tax Considerations" in our prospectus dated September 1, 2023, as the same may have been amended or supplemented form time-to-time (the “Prospectus”), is hereby modified to reflect legislation commonly referred to as the One Big Beautiful Bill Act. Capitalized terms used in this section without being defined herein shall have the meanings ascribed to them by the Prospectus.
Enactment of the One Big Beautiful Bill Act: On July 4, 2025, legislation commonly referred to as the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law. Among other changes, the OBBBA included a number of changes to the Code that affect the U.S. federal income tax laws applicable to REITs and their security holders. The most significant of those changes are described below. Prospective investors should consult their tax advisors regarding the effects of the OBBBA on their investment.
REIT Asset Tests: The OBBBA increases the ownership limit applicable to TRSs for taxable years ending after December 31, 2025. For taxable years ending after December 31, 2017 through December 31, 2025, not more than 20% of the value of our total assets may be represented by securities of one or more TRSs. For taxable years ending after December 31, 2025, not more than 25% of the value of our total assets may be represented by securities of one or more TRSs.
Pass-Through Business Income Tax Rate Lowered through Deduction: The OBBBA permanently extends the provisions allowing individuals and some trusts and estates to deduct up to 20% of “qualified REIT dividends,” which are REIT dividends other than capital gain dividends, dividends designated as eligible for capital gain tax rates and certain other income items discussed under “Impact of the Tax Cuts and Jobs Act on the Company and its Stockholders-Pass-Through Business Income Tax Rate Lowered through Deduction.”
Limitations on Interest Deductibility: The OBBBA eases the limitation on the deduction for net interest expense discussed under “Impact of the Tax Cuts and Jobs Act on the Company and its Stockholders-Limitations on Interest Deductibility,” by modifying the definition of “adjusted taxable income” which is one of the limitations on the deduction. For taxable years beginning after December 21, 2025, adjusted taxable income will again be calculated before any deductions for depreciation, amortization, and depletion.
Revised Individual Tax Rates and Deductions: The OBBBA permanently extends the individual income tax changes discussed under “Impact of the Tax Cuts and Jobs Act on the Company and its Stockholders-Revised Individual Tax rates and Deduction.”
The changes made by the OBBBA are complex and we cannot predict the long-term impact of the OBBBA, other new U.S. federal tax laws, and whether, when and how the OBBBA and other new U.S. federal tax laws will be affected by any administrative and judicial interpretations. Stockholders and prospective investors should consult their tax advisors regarding the effects of the OBBBA on their investment.
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Table of Contents
Item 6. Exhibits
Exhibit No. | |
| Title of Exhibit |
31.1 | | Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | | Certification of Senior Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | | Certification of President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | | Certification of Senior Vice President and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101 | | The following financial statements and notes from the One Liberty Properties, Inc. Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025 filed on November 6, 2025, formatted in Inline XBRL: (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Changes in Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to the Consolidated Financial Statements. | |
104 | | | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document and included in Exhibit 101). |
* Indicates a management contract or compensatory plan or arrangement.
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ONE LIBERTY PROPERTIES, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
| ONE LIBERTY PROPERTIES, INC. |
| | (Registrant) |
| | |
| | |
Date: November 6, 2025 | | /s/ Patrick J. Callan, Jr. |
| | Patrick J. Callan, Jr. |
| | President and Chief Executive Officer |
| | (principal executive officer) |
| | |
| | |
Date: November 6, 2025 | | /s/ Isaac Kalish |
| | Isaac Kalish |
| | Senior Vice President and |
| | Chief Financial Officer |
| | (principal financial officer) |
43
FAQ
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