One Liberty Properties, Inc. (NYSE: OLP), a real estate investment
trust focused on net leased properties, today announced operating
results for the quarter ended March 31, 2022.
“We continue to evolve our portfolio to maximize long-term cash
flow to support our dividend,” commented Patrick J. Callan, Jr.,
President and Chief Executive Officer of One Liberty. “While we
continue to pursue acquisitions of additional industrial properties
and other select assets, during this time of low-cap rates and
rising interest rates, we will remain disciplined as we adhere to
our stringent underwriting standards in our ongoing efforts to
deliver value for our stockholders.”
Operating Results:
Rental income was $21.5 million in the first quarter of 2022
compared to $20.7 million in the first quarter of 2021.
This increase is due primarily to an additional $452,000 of rental
income, including $242,000 of deferred rent from 2021 and 2020,
from a movie theater tenant and, to a lesser extent lease
amendments, extensions and renewals at several other
properties.
Total operating expenses were $13.4 million in the first quarter
of 2022 compared to $13.2 million for the first quarter of 2021.
The change is primarily due to a rise in compensation expense.
Net income attributable to One Liberty in the first quarter of
2022 was $9.3 million, or
$0.44 per diluted share, compared to $3.0 million, or $0.13 per
diluted share, in the first quarter of 2021. Net income for the
2022 quarter includes a $4.6 million, or $0.22 per diluted share,
gain on sale of real estate, a $918,000, or $0.04, per share,
insurance recovery, and a $328,000, or $0.02 per share, reduction
in interest expense.
Funds from Operations, or FFO1, was $10.6 million, or $0.50 per
diluted share, for the first quarter of 2022, compared to $8.8
million, or $0.42 per diluted share, in the first quarter of 2021.
The change is due primarily to the increases in rental income and
insurance recoveries and a reduction in interest expense, offset by
an increase in compensation expense.
Adjusted Funds from Operations, or AFFO, was $10.7 million, or
$0.50 per diluted share, for the quarter ended March 31, 2022,
compared to $10.0 million, or $0.48 per diluted share, for the
corresponding quarter in the prior year. The change in AFFO is due
to the factors contributing to the increase in FFO offset by the
exclusion of other income from insurance recoveries and
straight-line rent accruals.
Per share diluted net income, FFO and AFFO were negatively
impacted during the quarter ended March 31, 2022, by an approximate
482,000 increase in the weighted average number of shares of common
stock outstanding due to stock issuances pursuant to One Liberty’s
equity incentive, at-the-market offering (ATM) and dividend
reinvestment programs.
- 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, 2022, the Company had $11.4 million of cash and
cash equivalents, total assets of $750.1 million, total debt of
$402.8 million, and total One Liberty Properties, Inc.
stockholders’ equity of $308.9 million.
At May 3, 2022, One Liberty’s available liquidity was $112.5
million, including $12.5 million of cash and cash equivalents
(including the credit facility’s required $3.0 million average
deposit maintenance balance) and $100.0 million available under the
facility. The credit facility is currently available for the
acquisition of commercial real estate, repayment of mortgage debt,
and up to $10.0 million and $20.0 million for renovation and
operating expenses, respectively.
Acquisition:
As previously reported, on January 5, 2022, the Company acquired
an industrial property located in Fort Myers, Florida for a
purchase price of $8.1 million. Post-closing, the Company obtained
$4.9 million nine-year mortgage debt secured by the property, with
an interest rate of 3.09% and maturing in February 2031. The
property is leased through 2030 and provides for annual rental
income (excluding tenant reimbursements) of approximately
$534,000.
Dispositions:
In March 2022, the Company sold four restaurant properties
located in Pennsylvania for $10.0 million and recognized a $4.6
million gain. These properties contributed $117,000 of rental
income, net and $10,000 of depreciation and amortization expense in
the three months ended March 31, 2022.
Subsequent Event:
On May 2, 2022, One Liberty completed the sale of an industrial
property in Columbus, Ohio for a sales price of $8.5 million. This
property generated $749,000 of rental income, net, and incurred
operating expenses of $164,000 (including depreciation and
amortization expense of $66,000) in 2021. One Liberty anticipates
that it will recognize an approximate $6.9 million gain from this
sale in the quarter ending June 30, 2022.
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 funds from operations on
the same basis.
One Liberty computes AFFO by adjusting from FFO for
straight-line rent accruals and amortization of lease intangibles,
deducting lease termination fees and certain other non-recurring
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), income on insurance recoveries
from casualties and debt prepayment costs. Since the NAREIT White
Paper does not provide guidelines for computing AFFO, the
computation of AFFO may vary from one REIT to another.
One Liberty believes that FFO and AFFO are useful and standard
supplemental measures of the operating performance for equity REITs
and are used frequently by securities analysts, investors and other
interested parties in evaluating equity REITs, many of which
present FFO and AFFO when reporting their operating results. FFO
and AFFO are intended to exclude GAAP historical cost depreciation
and amortization of real estate assets, which assumes that the
value of real estate assets diminishes predictably over time. In
fact, real estate values have historically risen and fallen with
market conditions. As a result, management believes that FFO and
AFFO provide a performance measure that when compared year over
year, should reflect the impact to operations from trends in
occupancy rates, rental rates, operating costs, interest costs and
other matters without the inclusion of depreciation and
amortization, providing a perspective that may not be necessarily
apparent from net income. Management also considers FFO and AFFO to
be useful in evaluating potential property acquisitions.
FFO and AFFO do not represent net income or cash flows from
operating, investing or financing activities as defined by GAAP.
FFO and AFFO should not be an alternative to net income as a
reliable measure of our operating performance nor as an alternative
to cash flows as measures of liquidity. FFO and AFFO do not measure
whether cash flow is sufficient to fund all of the Company’s cash
needs.
Forward Looking Statement:
Certain information contained in this press release, together
with other statements and information publicly disseminated by One
Liberty Properties, Inc. is forward looking within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities and Exchange Act of 1934, as amended. 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, 2021 and the reports
filed with the Securities and Exchange Commission thereafter; in
particular, the sections of such reports entitled “Cautionary Note
Regarding Forward Looking Statements”, “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations”, included therein. In addition, estimates of
rental income for 2022 exclude 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 results of operations,
financial condition, cash flows, performance or future achievements
or events.
About One Liberty Properties:
One Liberty is a self-administered and
self-managed real estate investment trust incorporated in Maryland
in 1982. The Company acquires, owns and manages a geographically
diversified portfolio consisting primarily of industrial and retail
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 PropertiesInvestor
RelationsPhone: (516) 466-3100www.onelibertyproperties.com
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ONE LIBERTY PROPERTIES, INC. |
CONDENSED BALANCE SHEETS |
(Amounts in Thousands) |
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(Unaudited) |
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March 31, |
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December 31, |
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2022 |
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2021 |
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ASSETS |
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Real estate investments, at cost |
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$ |
842,268 |
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$ |
837,641 |
|
Accumulated depreciation |
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|
(164,505 |
) |
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(160,664 |
) |
Real estate investments, net |
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|
677,763 |
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676,977 |
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|
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Property held-for-sale |
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1,270 |
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1,270 |
|
Investment in unconsolidated joint ventures |
|
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10,288 |
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|
10,172 |
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Cash and cash equivalents |
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11,442 |
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16,164 |
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Unbilled rent receivable |
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14,166 |
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|
14,330 |
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Unamortized intangible lease assets, net |
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19,912 |
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|
20,694 |
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Other assets |
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15,288 |
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|
13,346 |
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Total assets |
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$ |
750,129 |
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$ |
752,953 |
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LIABILITIES AND EQUITY |
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Liabilities: |
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Mortgages payable, net of $3,292 and $3,316 of deferred financing
costs, respectively |
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$ |
397,848 |
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$ |
396,344 |
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Line of credit-outstanding, net of $162 and $216 of deferred
financing costs, respectively |
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4,978 |
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11,484 |
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Unamortized intangible lease liabilities, net |
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10,335 |
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|
10,407 |
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Other liabilities |
|
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27,118 |
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28,440 |
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Total liabilities |
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440,279 |
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446,675 |
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Total One Liberty Properties, Inc. stockholders' equity |
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308,918 |
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305,332 |
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Non-controlling interests in consolidated joint ventures |
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932 |
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|
946 |
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Total equity |
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309,850 |
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306,278 |
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Total liabilities and equity |
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$ |
750,129 |
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$ |
752,953 |
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ONE LIBERTY PROPERTIES, INC. (NYSE: OLP) |
(Amounts in Thousands, Except Per Share Data) |
(Unaudited) |
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Three Months Ended |
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March 31, |
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2022 |
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2021 |
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Revenues: |
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Rental income, net |
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$ |
21,531 |
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$ |
20,684 |
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Lease termination fees |
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25 |
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132 |
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Total revenues |
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21,556 |
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20,816 |
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Operating expenses: |
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Depreciation and amortization |
|
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5,843 |
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5,757 |
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General and administrative |
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3,792 |
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3,642 |
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Real estate operating expenses |
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3,687 |
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|
3,686 |
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State taxes |
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|
74 |
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|
75 |
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Total operating expenses |
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13,396 |
|
|
|
13,160 |
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Other operating income |
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Gain on sale of real estate, net |
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4,649 |
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|
|
- |
|
Operating income |
|
|
12,809 |
|
|
|
7,656 |
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Other income and expenses: |
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Equity in earnings (loss) of unconsolidated joint ventures |
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116 |
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(22 |
) |
Other income |
|
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926 |
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|
170 |
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Interest: |
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Expense |
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(4,306 |
) |
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(4,634 |
) |
Amortization of deferred financing costs |
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(205 |
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(213 |
) |
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Net income |
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9,340 |
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2,957 |
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Net (income) loss attributable to non-controlling interests |
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(17 |
) |
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5 |
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Net income attributable to One Liberty Properties, Inc. |
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$ |
9,323 |
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$ |
2,962 |
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Net income per share attributable to common
stockholders-diluted |
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$ |
0.44 |
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$ |
0.13 |
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Funds from operations - Note 1 |
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$ |
10,635 |
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$ |
8,839 |
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Funds from operations per common share-diluted - Note 2 |
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$ |
0.50 |
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$ |
0.42 |
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Adjusted funds from operations - Note 1 |
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$ |
10,654 |
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$ |
10,009 |
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Adjusted funds from operations per common share-diluted - Note
2 |
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$ |
0.50 |
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$ |
0.48 |
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Weighted average number of common shares outstanding: |
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Basic |
|
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20,379 |
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20,003 |
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Diluted |
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20,541 |
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20,061 |
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ONE LIBERTY PROPERTIES, INC. (NYSE: OLP) |
(Amounts in Thousands, Except Per Share Data) |
(Unaudited) |
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Three Months Ended |
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March 31, |
Note 1: |
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2022 |
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2021 |
|
NAREIT funds from operations is summarized in the following
table: |
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GAAP net income attributable to One Liberty Properties, Inc. |
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$ |
9,323 |
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$ |
2,962 |
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Add: depreciation and amortization of properties |
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|
5,725 |
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|
5,655 |
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Add: our share of depreciation and amortization of unconsolidated
joint ventures |
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|
130 |
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|
134 |
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Add: amortization of deferred leasing costs |
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|
118 |
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|
102 |
|
Add: our share of amortization of deferred leasing costs of
unconsolidated joint ventures |
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5 |
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7 |
|
Deduct: gain on sale of real estate, net |
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(4,649 |
) |
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- |
|
Adjustments for non-controlling interests |
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|
(17 |
) |
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(21 |
) |
NAREIT funds from operations applicable to common
stock |
|
|
10,635 |
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|
|
8,839 |
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Deduct: straight-line rent accruals and amortization of lease
intangibles |
|
(567 |
) |
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(137 |
) |
Deduct: our share of straight-line rent accruals and amortization
of lease intangibles of unconsolidated joint ventures |
|
|
(8 |
) |
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|
(1 |
) |
Deduct: income on insurance recoveries from casualty loss |
|
|
(918 |
) |
|
|
(20 |
) |
Deduct: lease termination fee income |
|
|
(25 |
) |
|
|
(132 |
) |
Deduct: lease assignment fee income |
|
|
- |
|
|
|
(100 |
) |
Add: amortization of restricted stock and RSU compensation |
|
|
1,325 |
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|
|
1,343 |
|
Add: amortization of deferred financing costs |
|
|
205 |
|
|
|
213 |
|
Add: our share of amortization of deferred financing costs of
unconsolidated joint ventures |
|
|
4 |
|
|
|
4 |
|
Adjustments for non-controlling interests |
|
|
3 |
|
|
|
- |
|
Adjusted funds from operations applicable to common
stock |
|
$ |
10,654 |
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$ |
10,009 |
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Note 2: |
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NAREIT funds from operations is summarized in the following
table: |
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GAAP net income attributable to One Liberty Properties, Inc. |
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$ |
0.44 |
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$ |
0.13 |
|
Add: depreciation and amortization of properties |
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0.26 |
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0.28 |
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Add: our share of depreciation and amortization of unconsolidated
joint ventures |
|
|
0.01 |
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|
0.01 |
|
Add: amortization of deferred leasing costs |
|
|
0.01 |
|
|
|
- |
|
Add: our share of amortization of deferred leasing costs of
unconsolidated joint ventures |
|
|
- |
|
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|
- |
|
Deduct: gain on sale of real estate, net |
|
|
(0.22 |
) |
|
|
- |
|
Adjustments for non-controlling interests |
|
|
- |
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|
- |
|
NAREIT funds from operations per share of common
stock-diluted (a) |
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0.50 |
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|
0.42 |
|
Deduct: straight-line rent accruals and amortization of lease
intangibles |
|
(0.03 |
) |
|
|
(0.01 |
) |
Deduct: our share of straight-line rent accruals and amortization
of lease intangibles of unconsolidated joint ventures |
|
|
- |
|
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|
- |
|
Deduct: income on insurance recoveries from casualty loss |
|
|
(0.04 |
) |
|
|
- |
|
Deduct: lease termination fee income |
|
|
- |
|
|
|
(0.01 |
) |
Deduct: lease assignment fee income |
|
|
- |
|
|
|
- |
|
Add: amortization of restricted stock and RSU compensation |
|
|
0.06 |
|
|
|
0.07 |
|
Add: amortization of deferred financing costs |
|
|
0.01 |
|
|
|
0.01 |
|
Add: our share of amortization of deferred financing costs of
unconsolidated joint ventures |
|
|
- |
|
|
|
- |
|
Adjustments for non-controlling interests |
|
|
- |
|
|
|
- |
|
Adjusted funds from operations per share of common
stock-diluted (a) |
|
$ |
0.50 |
|
|
$ |
0.48 |
|
|
|
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|
|
(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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