One Liberty Properties Reports First Quarter 2024 Results
One Liberty Properties, Inc. reported its first quarter 2024 results, highlighting the acquisition of an industrial property, the sale of two assets, and contracts for three additional sales. The Company focused on transitioning its portfolio towards industrial ownership in the face of economic uncertainty. Despite a decrease in rental income, the net income was $5.2 million with a gain on sale of real estate. Funds from Operations (FFO) were $9.6 million, and Adjusted Funds from Operations (AFFO) were $10.2 million for the quarter. The balance sheet showed $27.4 million in cash, total assets of $755.7 million, and total debt of $416.5 million. The Company had liquidity of $115.1 million. Transactions included property sales generating net proceeds of $13-14 million and the acquisition of a 63,421 square foot industrial property in Albuquerque for $6.5 million.
The acquisition of an industrial property and strategic sales indicate a proactive approach to portfolio transformation.
The Company's net income of $5.2 million demonstrates profitability, supported by a gain on real estate sales.
Adjusted Funds from Operations (AFFO) of $10.2 million reflect a strong financial performance for the quarter.
The balance sheet shows robust liquidity with $27.4 million in cash and total assets of $755.7 million.
Rental income decreased due to property sales, impacting Funds from Operations (FFO) for the quarter.
AFFO decreased to $10.2 million primarily due to factors affecting FFO, signaling a potential financial challenge.
Total debt of $416.5 million raises concerns about the Company's leverage and debt levels.
Insights
One Liberty Properties, Inc.'s recent financial disclosure reveals a strategic shift toward industrial property ownership, complemented by sales of non-core assets. Despite a slight decrease in rental income from
As for net income, the marginal decline from
Focusing on the balance sheet, the increase in liquidity to
The recent acquisition of an industrial property in Albuquerque aligns with One Liberty Properties' strategic pivot towards industrial real estate, which is currently favored in the market due to e-commerce growth and supply chain reconfiguration. The property's lease terms, including annual increases of
The disposition of non-core assets, such as retail properties, reflects an industry-wide trend where REITs are divesting from sectors facing headwinds, like traditional brick-and-mortar retail. Nonetheless, it is important to monitor the expected gains from these sales, as they contribute substantially to the company's financial performance, evidenced by the pending sale of properties anticipated to generate an approximate
The management's disciplined approach towards transforming the portfolio is commendable. Still, investors should remain attentive to occupancy rates, rental rate trends and the management's execution capabilities to adapt to market conditions and maintain competitiveness within the industrial segment.
—Closes Acquisition of Industrial Property—
—Sells Two Assets and Secures Contracts for Three Additional Sales —
GREAT NECK, N.Y., May 07, 2024 (GLOBE NEWSWIRE) -- One Liberty Properties, Inc. (the “Company” or “One Liberty”) (NYSE: OLP), a real estate investment trust focused on net leased properties, today announced operating results for the quarter ended March 31, 2024.
“We remained focused on the goal of transforming our portfolio towards industrial ownership in the first quarter, working to execute on targeted and opportunistic sales and strategic acquisitions. These efforts led to the sale during the quarter of a restaurant, and subsequent to quarter end, to the addition of an industrial property, along with the sales and pending sales of four assets, including the sales of two retail properties and a restaurant,” stated Patrick J. Callan, Jr., One Liberty’s President and Chief Executive Officer. “While the macro-economic outlook remains uncertain, we believe our thoughtful and disciplined approach will allow us over-time to continue strengthening our portfolio and sustainably growing our cashflow.”
Operating Results:
Rental income was
Total operating expenses were relatively flat at
Net income attributable to One Liberty in the first quarter of 2024 was
Funds from Operations, or FFO1, was
Adjusted Funds from Operations, or AFFO, was
_______________
1 A description and reconciliation of non-GAAP financial measures (i.e., FFO and AFFO) to GAAP financial measures is presented later in this release.
Balance Sheet:
At March 31, 2024, the Company had
At May 1, 2024, One Liberty’s available liquidity was
Transactions:
Dispositions
During the quarter, the Company sold a pad site at a multi-tenant retail shopping center in Lakewood, Colorado, which it owned through a consolidated joint venture, for
Subsequent to quarter end, the Company sold a restaurant for a sales price of
Acquisition
On April 24, 2024, the Company acquired a 63,421 square foot industrial property located on a 5.28-acre lot in Albuquerque, New Mexico for
Non-GAAP Financial Measures:
One Liberty computes FFO in accordance with the “White Paper on Funds from Operations” issued by the National Association of Real Estate Investment Trusts (“NAREIT”) and NAREIT’s related guidance. FFO is defined in the White Paper as net income (calculated in accordance with 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, management does not add back to net income the amortization of costs in connection with its financing activities or depreciation of non-real estate assets.
One Liberty computes AFFO by adjusting from FFO for straight-line rent accruals and amortization of lease intangibles, deducting from income additional rent from ground lease tenant, income on settlement of litigation, income on insurance recoveries from casualties, lease termination and assignment fees, and adding back amortization of restricted stock and restricted stock unit compensation expense, amortization of costs in connection with its financing activities (including its share of its unconsolidated joint ventures), debt prepayment costs and amortization of lease incentives and mortgage intangible assets. Since the NAREIT White Paper does not provide guidelines for computing AFFO, the computation of AFFO varies from one REIT to another.
One Liberty believes that FFO and AFFO are useful and standard supplemental measures of the operating performance for equity REITs and are used frequently by securities analysts, investors and other interested parties in evaluating equity REITs, many of which present FFO and AFFO when reporting their operating results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate assets, which assumes that the value of real estate assets diminish predictability over time. In fact, real estate values have historically risen and fallen with market conditions. As a result, management believes that FFO and AFFO provide a performance measure that when compared year-over-year, should reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, interest costs and other matters without the inclusion of depreciation and amortization, providing a perspective that may not be necessarily apparent from net income. Management also considers FFO and AFFO to be useful in evaluating potential property acquisitions.
FFO and AFFO do not represent net income or cash flows from operating, investing or financing activities as defined by GAAP. FFO and AFFO should not be considered an alternative to net income as a reliable measure of our operating performance nor as an alternative to cash flows from operating, investing or financing activities as measures of liquidity. FFO and AFFO do not measure whether cash flow is sufficient to fund all of the Company’s 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 the Company’s performance, management is careful to examine GAAP measures such as net income and cash flows from operating, investing and financing activities.
Forward Looking Statement:
Certain information contained in this press release, together with other statements and information publicly disseminated by One Liberty Properties, Inc. is forward looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. 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 the purpose of complying with these safe harbor provisions. Forward looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “could,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions or variations thereof. Information regarding important factors that could cause actual outcomes or other events to differ materially from any such forward looking statements appear in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and the reports filed with the Securities and Exchange Commission thereafter; in particular, the sections of such reports entitled “Cautionary Note Regarding Forward Looking Statements”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included therein. In addition, estimates of base rent or rental income for 2024 or thereafter excludes any related variable rent, anticipated property purchases and/or sales may not be completed during the period indicated or at all, and estimates of gains from property sales 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 the Company’s control and which could materially affect the Company’s actual results, financial condition, cash flows, performance or future achievements.
About One Liberty Properties:
One Liberty is a self-administered and self-managed real estate investment trust incorporated in Maryland in 1982. The Company acquires, owns and manages a geographically diversified portfolio consisting primarily of industrial properties. Many of these properties are subject to long-term net leases under which the tenant is typically responsible for the property’s real estate taxes, insurance and ordinary maintenance and repairs.
Contact:
One Liberty Properties
Investor Relations
Phone: (516) 466-3100
www.onelibertyproperties.com
| ONE LIBERTY PROPERTIES, INC. | |||||||
| CONDENSED BALANCE SHEETS | |||||||
| (Amounts in Thousands) | |||||||
| (Unaudited) | |||||||
| March 31, | December 31, | ||||||
| 2024 | 2023 | ||||||
| ASSETS | |||||||
| Real estate investments, at cost | $ | 864,624 | $ | 864,655 | |||
| Accumulated depreciation | (187,346 | ) | (182,705 | ) | |||
| Real estate investments, net | 677,278 | 681,950 | |||||
| Investment in unconsolidated joint ventures | 2,104 | 2,051 | |||||
| Cash and cash equivalents | 27,373 | 26,430 | |||||
| Unbilled rent receivable | 16,872 | 16,661 | |||||
| Unamortized intangible lease assets, net | 13,650 | 14,681 | |||||
| Other assets | 18,392 | 19,833 | |||||
| Total assets | $ | 755,669 | $ | 761,606 | |||
| LIABILITIES AND EQUITY | |||||||
| Liabilities: | |||||||
| Mortgages payable, net | $ | 416,539 | $ | 418,347 | |||
| Line of credit | — | — | |||||
| Unamortized intangible lease liabilities, net | 9,679 | 10,096 | |||||
| Other liabilities | 23,401 | 25,418 | |||||
| Total liabilities | 449,619 | 453,861 | |||||
| Total One Liberty Properties, Inc. stockholders’ equity | 304,834 | 306,703 | |||||
| Non-controlling interests in consolidated joint ventures | 1,216 | 1,042 | |||||
| Total equity | 306,050 | 307,745 | |||||
| Total liabilities and equity | $ | 755,669 | $ | 761,606 | |||
| ONE LIBERTY PROPERTIES, INC. (NYSE: OLP) | |||||||
| (Amounts in Thousands, Except Per Share Data) | |||||||
| (Unaudited) | |||||||
| Three Months Ended | |||||||
| March 31, | |||||||
| 2024 | 2023 | ||||||
| Revenues: | |||||||
| Rental income, net | $ | 22,446 | $ | 22,952 | |||
| Lease termination fee | 250 | — | |||||
| Total revenues | 22,696 | 22,952 | |||||
| Operating expenses: | |||||||
| Depreciation and amortization | 6,021 | 6,145 | |||||
| General and administrative | 3,923 | 4,039 | |||||
| Real estate expenses | 4,470 | 4,124 | |||||
| State taxes | 63 | 68 | |||||
| Total operating expenses | 14,477 | 14,376 | |||||
| Other operating income | |||||||
| Gain on sale of real estate, net | 1,784 | 1,534 | |||||
| Operating income | 10,003 | 10,110 | |||||
| Other income and expenses: | |||||||
| Equity in earnings of unconsolidated joint ventures | 53 | 85 | |||||
| Other income | 267 | 15 | |||||
| Interest: | |||||||
| Expense | (4,717 | ) | (4,600 | ) | |||
| Amortization and write-off of deferred financing costs | (226 | ) | (202 | ) | |||
| Net income | 5,380 | 5,408 | |||||
| Net income attributable to non-controlling interests | (225 | ) | (22 | ) | |||
| Net income attributable to One Liberty Properties, Inc. | $ | 5,155 | $ | 5,386 | |||
| Net income per share attributable to common stockholders - diluted | $ | 0.23 | $ | 0.25 | |||
| Funds from operations - Note 1 | $ | 9,559 | $ | 10,113 | |||
| Funds from operations per common share - diluted - Note 2 | $ | 0.45 | $ | 0.47 | |||
| Adjusted funds from operations - Note 1 | $ | 10,210 | $ | 10,803 | |||
| Adjusted funds from operations per common share - diluted - Note 2 | $ | 0.48 | $ | 0.50 | |||
| Weighted average number of common shares outstanding: | |||||||
| Basic | 20,509 | 20,514 | |||||
| Diluted | 20,579 | 20,579 | |||||
| ONE LIBERTY PROPERTIES, INC. (NYSE: OLP) | |||||||
| (Amounts in Thousands, Except Per Share Data) | |||||||
| (Unaudited) | |||||||
| Three Months Ended | |||||||
| March 31, | |||||||
| Note 1: | 2024 | 2023 | |||||
| NAREIT funds from operations is summarized in the following table: | |||||||
| GAAP net income attributable to One Liberty Properties, Inc. | $ | 5,155 | $ | 5,386 | |||
| Add: depreciation and amortization of properties | 5,832 | 5,969 | |||||
| Add: our share of depreciation and amortization of unconsolidated joint ventures | 6 | 130 | |||||
| Add: amortization of deferred leasing costs | 189 | 176 | |||||
| Add: our share of amortization of deferred leasing costs of unconsolidated joint ventures | — | 4 | |||||
| Deduct: gain on sale of real estate, net | (1,784 | ) | (1,534 | ) | |||
| Adjustments for non-controlling interests | 161 | (18 | ) | ||||
| NAREIT funds from operations applicable to common stock | 9,559 | 10,113 | |||||
| Deduct: straight-line rent accruals and amortization of lease intangibles | (661 | ) | (893 | ) | |||
| Deduct: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures | (1 | ) | (5 | ) | |||
| Deduct: lease termination fee income | (250 | ) | — | ||||
| Deduct: other income | (27 | ) | — | ||||
| Add: amortization of restricted stock and RSU compensation | 1,272 | 1,328 | |||||
| Add: amortization and write-off of deferred financing costs | 226 | 202 | |||||
| Add: amortization of lease incentives | 30 | 31 | |||||
| Add: amortization of mortgage intangible assets | 34 | 23 | |||||
| Add: our share of amortization of deferred financing costs of unconsolidated joint venture | — | 4 | |||||
| Adjustments for non-controlling interests | 28 | — | |||||
| Adjusted funds from operations applicable to common stock | $ | 10,210 | $ | 10,803 | |||
| Note 2: | |||||||
| NAREIT funds from operations is summarized in the following table: | |||||||
| GAAP net income attributable to One Liberty Properties, Inc. | $ | 0.23 | $ | 0.25 | |||
| Add: depreciation and amortization of properties | 0.28 | 0.27 | |||||
| Add: our share of depreciation and amortization of unconsolidated joint ventures | — | 0.01 | |||||
| Add: amortization of deferred leasing costs | 0.01 | 0.01 | |||||
| Add: our share of amortization of deferred leasing costs of unconsolidated joint ventures | — | — | |||||
| Deduct: gain on sale of real estate, net | (0.08 | ) | (0.07 | ) | |||
| Adjustments for non-controlling interests | 0.01 | — | |||||
| NAREIT funds from operations per share of common stock - diluted (a) | 0.45 | 0.47 | |||||
| Deduct: straight-line rent accruals and amortization of lease intangibles | (0.03 | ) | (0.04 | ) | |||
| Deduct: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures | — | — | |||||
| Deduct: lease termination fee income | (0.01 | ) | — | ||||
| Deduct: other income | — | — | |||||
| Add: amortization of restricted stock and RSU compensation | 0.06 | 0.06 | |||||
| Add: amortization and write-off of deferred financing costs | 0.01 | 0.01 | |||||
| Add: amortization of lease incentives | — | — | |||||
| Add: amortization of mortgage intangible assets | — | — | |||||
| Add: our share of amortization of deferred financing costs of unconsolidated joint venture | — | — | |||||
| Adjustments for non-controlling interests | — | — | |||||
| Adjusted funds from operations per share of common stock - diluted (a) | $ | 0.48 | $ | 0.50 | |||
| (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. | |||||||
FAQ
What were One Liberty Properties, Inc.'s total assets at the end of March 2024?
What was the net income of One Liberty in the first quarter of 2024?
How much liquidity did One Liberty have on May 1, 2024?
What was the acquisition made by One Liberty on April 24, 2024?
