Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Overview
We are a self-administered and self-managed REIT focused on acquiring, owning and managing a geographically diversified portfolio of industrial, retail (including furniture stores and supermarkets), restaurant, health and fitness and theater properties, many of which are subject to long-term leases. Most of our leases are “net leases” under which the tenant, directly or indirectly, is responsible for paying the real estate taxes, insurance and ordinary maintenance and repairs of the property. As of December 31, 2020, we own, in 31 states, 123 properties, including four properties owned by consolidated joint ventures and three properties owned through unconsolidated joint ventures.
Challenges and Uncertainties Related to the COVID-19 Pandemic
The most significant challenge we faced in 2020, and the significant uncertainties we face in the near term, are the direct and indirect economic and other impacts of the COVID-19 pandemic and the responses thereto. The pandemic had, and continues to have, a significant impact on the global economy, the U.S. economy, and the economies of the local markets in which our properties are located. The preventative measures taken to address the pandemic, and the economic consequences resulting therefrom, have affected, and will continue to affect, our tenants to varying degrees depending on, among other things, the location of the subject property and the nature of the tenant and use of the property (i.e., industrial or non-industrial), with retail (both general and specialized), theater, health and fitness, and restaurant properties having been and continuing to be significantly adversely affected.
The pandemic and the current economic, financial, and capital markets environments present material risks and uncertainties. We are unable to predict the ultimate impact that the pandemic and the continuing economic slowdown will have on our business, financial condition, results of operation and cash flows, which will depend largely on future developments relating, among other things, to the duration and scope of the pandemic, efforts to boost the economy, the timing and strength of an economic recovery, if any, and other factors outside of our control. If the pandemic and economic slowdown continue for an extended period, among other things,
● it may be more difficult to obtain equity and debt financing, and
Our business, income, cash flow, results of operations, financial condition, liquidity, prospects, ability to service our debt, and ability to pay cash dividends to our stockholders, may be adversely affected upon the occurrence of any one or more of the foregoing. The risks, uncertainties and challenges presented by the pandemic and the economic slowdown may also have the effect of heightening many of the other risks, challenges and uncertainties described in this report.
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Deferrals and Abatements; Addressing Liquidity and Capital Resource Requirements
We summarize below certain information, as of December 31, 2020 (unless otherwise indicated), regarding the impact of the pandemic on our business and our responses thereto. See Note 2 to our consolidated financial statements for information regarding the accounting treatment afforded to abatements and deferrals of rental payments.
We deferred the payment of an aggregate of approximately $3.5 million, or 4.8%, of the annual base rent otherwise payable during 2020. Of such sum, $1.6 million, or 47.0%, is payable by four tenants at 16 properties. Of the total $3.5 million deferral, approximately 14.2% was repaid in 2020 and 79.6%, 5.9% and 0.3% are to be paid in 2021, 2022 and 2023, respectively. These deferrals do not (i) modify or defer tenant obligations to reimburse us for property level operating expenses and (ii) affect our net income, funds from operations or adjusted funds from operations; however, they reduced cash available for acquisitions, operations and dividends. We may grant, as circumstances require, rent deferrals in addition to those described in this report.
The abatements we agreed to reduced for 2020 (before giving effect to the impact of lease extensions on straight-line rent as described below) rental income by $1.4 million. For seven tenants, we linked a rent abatement to a lease extension (and for another tenant, reduced the lease term and the base rent payable) at a property. As a result of the abatements coupled with the modified lease term,
We may grant, as circumstances require, rent abatements in addition to those described in this report.
The table below provides information regarding the base rent due and collected for the periods indicated, before and after giving effect to deferrals and abatements (dollars in thousands):
Year Ended Three Months Ended Two Months Ended
Year Ended Three Months Ended Two Months Ended
_______________
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To conserve cash and enhance our financial flexibility:
General Challenges and Uncertainties
In addition to the challenges and uncertainties presented by the pandemic, and as also described under “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors”, we, among other things, face additional challenges and uncertainties, which are heightened by the pandemic, 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.
We seek to manage the risk of our real property portfolio and the related financing arrangements by (i) diversifying among types of properties, industries, locations, tenants, scheduled lease expirations, mortgage maturities and lenders, and (ii) minimizing our exposure to interest rate fluctuations. As a result, as of December 31, 2020:
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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, regular contact with tenant’s representatives, tenant credit checks and regular management reviews of our tenants. We may sell a property if the tenant’s financial condition is unsatisfactory.
We monitor, on an ongoing basis, our expiring leases and generally approach tenants with expiring leases (including those subject to renewal options) at least a year prior to lease expiration to determine their interest in renewing their leases. In 2021 and 2022, 31 tenants with 34 leases for 28 properties representing $15.6 million, or 22.6%, of 2021 contractual rental income expire. The following table provides information, as of December 31, 2020, regarding the leases that expire in 2021 and 2022 (with respect to the multi-tenant shopping centers in Royersford, Pennsylvania and Lakewood, Colorado, which have both retail and restaurant tenants, we have allocated the property count and associated mortgage debt to the retail (and not restaurant) categories because these are mixed-use properties):
Weighted Average
Remaining Percentage of Percentage of Percentage of Mortgage
Health & Fitness n/a n/a n/a n/a n/a n/a n/a
Other n/a n/a n/a n/a n/a n/a n/a
Theater n/a n/a n/a n/a n/a n/a n/a
______________
(3) Haverty Furniture leases eleven of these properties.
We are negotiating lease extensions with respect to several properties that account for at least 7.0% of 2021 contractual rental income and at which the lease(s) expire in 2022. We anticipate that if such arrangements are finalized, as to which no assurance can be given, (i) we will extend the leases for several properties for periods ranging from four years to nine years, (ii) a lease for at least one of these properties will not be renewed, and (iii) we will expend an aggregate of approximately $3.3 million from 2021 through 2023 for capital improvements and transaction costs at several of these properties. As a result of the foregoing and other accommodations that may be provided in connection with renewing the leases at these properties, we anticipate that the base rent and cash flow from operations generated by the properties that are re-leased will decrease beginning in late 2022 from that currently generated by all of such properties. If other significant tenants with leases expiring in 2021 and 2022 choose not to renew their leases or negotiate for renewals on terms less favorable to us than currently in effect, we may be adversely affected due to the reduction in base rents received and the expenses associated with maintaining vacant properties.
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In acquiring properties, we balance an evaluation of the terms of the leases and the credit of the existing tenants with a fundamental analysis of the real estate to be acquired, which analysis takes into account, among other things, the estimated value of the property, local demographics and the ability to re-rent or dispose of the property on favorable terms upon lease expiration or early termination.
We are sensitive to the risks facing the retail industry as a result of the growth of e-commerce. Over the past several years, we have been addressing our exposure to the retail industry by focusing on acquiring industrial properties (including warehouse and distribution facilities) and properties that we believe capitalize on e-commerce activities - since September 2016, we have not acquired any retail properties and have sold 13 retail properties. As a result of the focus on industrial properties and the sale of retail properties, retail properties generated 32.9%, 35.2%, 41.9% and 43.7%, of rental income, net, in 2020, 2019, 2018 and 2017, respectively, and industrial properties generated 55.4%, 48.7%, 40.1% and 35.1%, of rental income, net, in 2020, 2019, 2018 and 2017, respectively.
At December 31, 2020, we have variable rate debt in the principal amount of $97.7 million (i.e., $84.7 million of mortgage debt and $13.0 million of credit facility debt) that bear interest at the one month LIBOR rate plus a negotiated spread. This mortgage debt is hedged through interest rate swaps and the credit facility debt is not hedged. The authority regulating LIBOR announced it intends to stop compelling banks to submit rates for the circulation of LIBOR after June 2023 and it is possible that LIBOR will become unavailable at an earlier date. As approximately $68.7 million of this mortgage debt and the related notional amount of the interest rate swaps mature after June 2023, there is uncertainty as to how the interest rate on this variable rate debt and the related swaps will be determined when LIBOR is unavailable.
Challenges and Uncertainties Facing Certain Tenants and Properties
Set forth below is a description of the challenges and uncertainties facing certain tenants or properties:
Regal Cinemas
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LA Fitness
The Vue - Beachwood, Ohio
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Update as to Status of Tenants that filed for Bankruptcy in 2020
In our Quarterly Report on Form 10-Q for the period ended September 30, 2020, we reported that four tenants leasing ten properties had filed for bankruptcy protection from May through August 2020. As of February 28, 2021, these tenants or their respective affiliates, NPC International, a Wendy’s franchisee that, among other things, operates more than 385 Wendy’s restaurants, CEC Entertainment, Inc., the operator of Chuck E Cheese restaurants, Tuesday Morning Corporation, a Nasdaq listed retailer specializing in home products, and Tailored Brands, the parent of Men’s Wearhouse, had exited bankruptcy. With respect to these four tenants, we estimate that after giving effect to lease amendments entered into in connection with the bankruptcy proceedings, total base rent and rental income will (i) decrease by approximately $177,000 and $292,000, respectively, for the year ending December 31, 2021 and (ii) increase by approximately $897,000 and $128,000, respectively, from January 1, 2021 through the expiration (without giving effect to any extension options) of the applicable leases.
Re-development of the Manahawkin Property
We are re-developing the Manahawkin Property, which is owned by an unconsolidated joint venture in which we have a 50% equity interest. As a result of this re-development activity and the related decrease in occupancy, and more recently, the failure of Regal Cinemas, a significant tenant at this property, to pay rent, the income and cash flow from this property decreased significantly over the past several years and the property’s carrying costs (including debt service payments) exceed the operating cash flow generated therefrom. Because of, among other things, the (i) decrease in rent, (ii) possibility that co-tenancy clauses could be triggered if certain significant tenants vacate or otherwise cease operations, (iii) possibility that tenants that have informally agreed to participate in the re-development, in light of, among other things, the challenges facing the retail environment, may determine not to participate and (iv) anticipated difficulty in obtaining financing for the project and the anticipated delay in completing the re-development, there is uncertainty as to if and when the re-development will be completed. If Regal Cinemas does not continue paying rent as agreed to in February 2021 (see “—Regal Cinemas” above) or the re-development is not completed on a timely basis, our net income, cash flow and financial condition may be adversely affected. See “—Liquidity and Capital Resources.”
Round Rock Guaranty Litigation
In 2019, we sued the guarantor of the lease at our former property in Round Rock, Texas, which we refer to as the “Round Rock Property”, at which the tenant obtained bankruptcy protection and terminated its lease. (The lawsuit is captioned: OLP Wyoming Springs, LLC, Plaintiff, v. Harden Healthcare, LLC, Defendant, v Benjamin Hanson, Intervenor, District Court of Williamson County, Texas, Cause No. 18-1511-C368). The trial court granted our motion for summary judgment determining that the lease guarantor is liable under its guaranty. Our damage assessment asserts mitigated damages in excess of $14 million and the lease guarantor asserts that it is not liable for any damages, and that if the court determines it is liable for damages, the damages would range from $1.0 million to $5.6 million. We anticipate that we will continue to incur significant expense in connection with this lawsuit and cannot provide any assurance that we will realize any recovery therefrom.
2020 and Recent Developments
In 2020:
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In January 2021, a retail tenant that accounts for $718,000, or 1.0%, of 2021 contractual rental income exercised its option to terminate its lease in January 2022 and in connection therewith, paid a lease termination fee of $350,000 which we will recognize ratably over the year ending December 31, 2021.
Comparison of Years Ended December 31, 2020 and 2019
Revenues
The following table compares total revenues for the periods indicated:
Year Ended
December 31, Increase
(Dollars in thousands) 2020 2019 (Decrease) % Change
Rental income, net.
The following table details the components of rental income, net, for the periods indicated:
Year Ended
December 31, Increase
(Dollars in thousands) 2020 2019 (Decrease) % Change
Changes due to acquisitions and dispositions
Properties acquired in 2019 and 2020 generated a $4.4 million increase (including $1.8 million from two properties acquired in 2020), offset by a decrease of $3.9 million representing the 2019 rental income from properties sold during 2019 and 2020.
Changes at same store properties
The decrease is due to:
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Offsetting the decrease are increases of:
Lease termination fees.
In 2019, we received $950,000 of lease termination fees in connection with the buyout of leases at our Philadelphia, Pennsylvania, and Newark, Delaware retail properties.
Operating Expenses
The following table compares operating expenses for the periods indicated:
Year Ended
December 31, Increase
(Dollars in thousands) 2020 2019 (Decrease) % Change
Operating expenses:
Impairment due to casualty loss 430 — 430 n/a
Depreciation and amortization. The increase is due primarily to $1.9 million of depreciation and amortization expense on the properties acquired in 2020 and 2019 (including $941,000 from properties acquired in 2020). This increase was offset primarily by the inclusion in 2019 of (i) $761,000 from the properties sold since January 1, 2019 and (ii) amortization of $201,000 of tenant origination costs at several properties that prior to December 31, 2020, were fully amortized in connection with lease expirations.
General and administrative. The increase is due primarily to increases of:
The increase was offset by a $187,000 decrease due primarily to the elimination of the professional fees related to the attestation regarding internal controls over financial reporting.
We anticipate that for the quarter ending June 30, 2021, we will recognize compensation expense of $176,000 resulting from the accelerated vesting of restricted stock awards due to a director’s retirement from the board at the 2021 annual meeting of stockholders.
Real estate expenses.
The decrease is due primarily to decreases of : (i) $482,000 related to properties, other than the Round Rock Property, sold during 2020 and 2019 (including $279,000 from properties sold in 2020), (ii) $280,000 of real estate tax expense and $248,000 of legal expenses for our Round Rock Property which was sold in December
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2019. We incurred $860,000 and $612,000 of litigation expenses in connection with the Round Rock Property in 2019 and 2020, respectively, and we may expend significant amounts in such litigation expenses in 2021. The decrease was offset by a $591,000 increase from properties acquired in 2020 and 2019 (including $150,000 from properties acquired in 2020).
A substantial portion of real estate expenses are rebilled to tenants and are included in Rental income, net, on the consolidated statements of income, other than the expenses related to the Round Rock Property.
Impairment due to casualty loss.
In August 2020, a building at our Lake Charles, Louisiana property was damaged due to a hurricane and we wrote-off $430,000, representing the carrying value of the damaged portion of the building. See “- Other income” for information about the insurance recoveries received and to be received with respect to this impairment.
Gain on sale of real estate, net
The following table compares gain on sale of real estate, net:
Year Ended
December 31, Increase
(Dollars in thousands) 2020 2019 (Decrease) % Change
See Note 5 to our consolidated financial statements for information regarding our sales of real estate.
Other Income and Expenses
The following table compares other income and expenses for the periods indicated:
Year Ended
December 31, Increase
(Dollars in thousands) 2020 2019 (Decrease) % Change
Other income and expenses:
Equity in earnings of unconsolidated joint ventures $ 38 $ 16 $ 22 137.5
Interest:
Equity in earnings from sale of unconsolidated joint venture property. The results for 2020 represent a $121,000 gain from the sale of the Savannah, Georgia property.
Prepayment costs on debt. These costs were incurred in (i) 2020 in connection with the sale of two properties (Knoxville, Tennessee, $833,000 and Onalaska, Wisconsin, $290,000) and (ii) 2019 in connection with the sale of three properties, including $625,000 incurred in connection with the sale of the Round Rock Property.
Other income. Other income in 2020 includes $430,000 of property insurance recoveries related to our Lake Charles, Louisiana property that was damaged by a hurricane in August 2020. We anticipate that we may recognize an additional $600,000 as other income from insurance recoveries over the next several months.
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Interest expense. The following table summarizes interest expense for the periods indicated:
Year Ended
December 31, Increase
(Dollars in thousands) 2020 2019 (Decrease) % Change
Interest expense:
Credit facility interest
The following table reflects the average interest rate on the average principal amount of outstanding credit line debt during the applicable year:
Year Ended
December 31, Increase %
(Dollars in thousands) 2020 2019 (Decrease) Change
Average interest rate on credit line debt 2.53 % 4.03 % (1.50) % (37.2)
The decrease in 2020 is substantially due to a decrease of 150 basis points (i.e., from $4.03% to 2.53%), in the weighted average interest rate due to a decrease in the one month LIBOR rate. The decrease was offset by a $2.4 million increase in the weighted average balance outstanding under the facility.
Mortgage interest
The following table reflects the average interest rate on the average principal amount of outstanding mortgage debt during the applicable year:
Year Ended
December 31, Increase
(Dollars in thousands) 2020 2019 (Decrease) % Change
Average interest rate on mortgage debt 4.20 % 4.29 % (0.09) % (2.1)
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 from FFO for our straight-line rent accruals and amortization of lease intangibles, deducting lease termination fees and adding back amortization of restricted stock and restricted stock unit compensation expense, amortization of costs in connection with our financing activities (including our share of our 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.
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
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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.
The table below provides a reconciliation of net income in accordance with GAAP to FFO and AFFO for the years indicated:
Add: depreciation and amortization of properties 22,558 21,574
Add: impairment due to casualty loss 430 —
Add: amortization of deferred leasing costs 406 452
Deduct: gain on sale of real estate, net (17,280) (4,327)
Adjustments for non‐controlling interests (88) 324
NAREIT funds from operations applicable to common stock 33,876 36,579
Deduct: lease termination fee income (15) (950)
Add: amortization of restricted stock compensation 4,686 3,870
Add: prepayment costs on debt 1,123 827
Deduct: income on insurance recoveries from casualty loss (430) —
Add: amortization and write‐off of deferred financing costs 976 995
Adjustments for non‐controlling interests 3 (23)
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The table below provides a reconciliation of net income per common share (on a diluted basis) in accordance with GAAP to FFO and AFFO for the years indicated:
GAAP net income attributable to One Liberty Properties, Inc. $ 1.33 $ 0.88
Add: depreciation and amortization of properties 1.12 1.11
Add: impairment due to casualty loss 0.02 —
Add: amortization of deferred leasing costs 0.02 0.02
Deduct: gain on sale of real estate, net (0.85) (0.22)
Adjustments for non‐controlling interests — 0.02
NAREIT funds from operations per share of common stock 1.66 1.84
Deduct: lease termination fee income — (0.05)
Add: amortization of restricted stock compensation 0.23 0.20
Add: prepayment costs on debt 0.06 0.04
Deduct: income on insurance recoveries from casualty loss (0.02) —
Add: amortization and write‐off of deferred financing costs 0.05 0.05
Adjustments for non‐controlling interests — —
Adjusted funds from operations per share of common stock $ 1.90 $ 1.98
The $2.7 million, or 7.4%, decrease in FFO is primarily due to:
● a $1.9 million decrease in rental income,
● a $935,000 decrease in lease termination fee income,
● a $1.2 million increase in general and administrative expense, and
● a $296,000 increase in prepayment costs on debt.
Offsetting the decrease is:
● a $514,000 decrease in interest expense,
● a $478,000 decrease in real estate operating expense, and
● a $488,000 increase in other income.
These changes are described in “—Comparison of Years Ended December 31, 2020 and 2019”.
The $622,000, or 1.6%, decrease in AFFO is due to the decrease in FFO as described above excluding:
● the $935,000 decrease in lease termination fee income,
● the $296,000 increase in prepayment costs on debt, and
These changes are described in “—Comparison of Years Ended December 31, 2020 and 2019”.
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Comparison of Years Ended December 31, 2019 and 2018
As we qualify as a smaller reporting company, this comparison is omitted in accordance with Instruction 1 to Item 303(a) of Regulation S-K.
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. In 2020, we obtained $18.2 million of proceeds from mortgage financings, approximately $16.5 million of net proceeds from property sales (after giving effect to repayment of mortgage debt and debt prepayment costs and excluding the $4.6 million purchase money mortgage received on the sale of the Houston, Texas properties) and paid $6.8 million of dividends through the issuance of our stock. Our available liquidity at March 4, 2021 was approximately $75.1 million, including approximately $8.7 million of cash and cash equivalents (including the credit facility’s required $3.0 million average deposit maintenance balance) and, subject to borrowing base requirements, up to $66.4 million available under our credit facility.
Liquidity and Financing
We expect to meet our (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 $3.3 million of capital expenditures and transaction fees that may be required over the next two years in connection with anticipated lease extensions) from the foregoing, as well as property financings, property sales and sale of our common stock. We and our joint venture partner are also re-developing the Manahawkin Property - we estimate that our share of the capital expenditures required in connection with such re-development will range from $12.0 million to $15.0 million. We are evaluating various sources of funding for such expenditures including borrowings from our credit facility.
The following table sets forth, as of December 31, 2020, information with respect to our mortgage debt that is payable from January 2021 through December 31, 2023 (excluding the mortgage debt of our unconsolidated joint venture):
At December 31, 2020, an unconsolidated joint venture had a first mortgage on its property (i.e., the Manahawkin Property) with an outstanding balance of approximately $22.9 million, bearing interest at 4.0% per annum and maturing in July 2025.
We intend to make debt amortization payments from operating cash flow and, though no assurance can be given that we will be successful in this regard, generally intend to refinance, extend or payoff the mortgage loans which mature in 2021 through 2023. We 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).
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, since each of our encumbered properties is subject to a non-recourse mortgage (with standard carve-outs), if our in-house evaluation of the market value of such property is less than the principal balance outstanding on the mortgage loan, we may determine to convey, in certain circumstances, such property to the mortgagee in order 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
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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 $30.0 million and 30% of the borrowing base subject to a cap of (i) $10.0 million for renovation expenses and (ii) $20.0 million for operating expense purposes. On June 30, 2022, the amount we can borrow for renovation expenses and operating expenses changes to $20.0 million and $10.0 million, respectively. To the extent that as of July 1, 2022 more than $10.0 million is outstanding for operating expense purposes, such excess must be repaid immediately. See “—Liquidity and Capital Resources”. The facility matures December 31, 2022 and bears interest equal to the one month LIBOR rate 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 300 basis points if such ratio is greater than 65%. The applicable margin was 200 basis points for 2020 and 2019. 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. For 2020, the weighted average interest rate on the facility was approximately 2.53% and as of February 28, 2021, the rate on the facility was 1.87%.
The terms of our credit facility include certain restrictions and covenants which 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 total 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.
Contractual Obligations
The following sets forth our contractual obligations as of December 31, 2020:
Payment due by period
Less than More than
(Dollars in thousands) 1 Year 1 ‐ 3 Years 4 ‐ 5 Years 5 Years Total
Contractual Obligations
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As of December 31, 2020, we had $433.5 million of mortgage debt outstanding (excluding mortgage debt of our unconsolidated joint venture), all of which is non-recourse (subject to standard carve-outs). We expect that mortgage interest and amortization payments (excluding repayments of principal at maturity) of approximately $92.2 million due through 2023 will be paid primarily from cash generated from our operations. We anticipate that principal balances due at maturity through 2023 of $56.8 million will be paid primarily from cash and cash equivalents and mortgage financings and refinancings. If we are unsuccessful in refinancing our existing indebtedness or financing our unencumbered properties, our cash flow, funds available under our credit facility and available cash, if any, may not be sufficient to repay all debt obligations when payments become due, and we may need to issue additional equity, obtain long or short- term debt, or dispose of properties on unfavorable terms.
Cash Distribution Policy
We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. Accordingly, to qualify as a REIT, we must, among other things, meet a number of organizational and operational requirements, including a requirement that we distribute currently at least 90% of our ordinary taxable income to our stockholders. It is our current intention to comply with these requirements and maintain our REIT status. As a REIT, we generally will not be subject to corporate federal, state or local income taxes on taxable income we distribute currently (in accordance with the Internal Revenue Code and applicable regulations) to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal, state and local income taxes at regular corporate rates and may not be able to qualify as a REIT for four subsequent tax years. Even if we qualify for federal taxation as a REIT, we may be subject to certain state and local taxes on our income and to federal income taxes on our undistributed taxable income (i.e., taxable income not distributed in the amounts and in the time frames prescribed by the Internal Revenue Code and applicable regulations thereunder) and are subject to Federal excise taxes on our undistributed taxable income.
It is our intention to pay to our stockholders within the time periods prescribed by the Internal Revenue Code no less than 90%, and, if possible, 100% of our annual taxable income, including taxable gains from the sale of real estate. It will continue to be our policy to make sufficient distributions to stockholders in order for us to maintain our REIT status under the Internal Revenue Code.
Of the aggregate $36.6 million of dividends declared in 2020, $6.8 million or 18.7% was paid in the form of stock (excluding $1.0 million paid in stock pursuant to our dividend reinvestment plan). We paid dividends in stock to conserve cash in response to the economic dislocations resulting from the pandemic. Our board of directors will continue to evaluate, on a quarterly basis, the amount and nature (i.e., cash or stock) of dividend payments based on its assessment of, among other things, our short and long-term cash and liquidity requirements, prospects, debt maturities, projections of our REIT taxable income, net income, funds from operations, and adjusted funds from operations.
Off-Balance Sheet Arrangements
We are not a party to any off-balance sheet arrangements other than with respect to a land parcel owned by us and located in Beachwood, Ohio. This parcel is improved by a multi-family complex and we ground leased the parcel to the owner/operator of such complex. The ground lease generated $729,000, $783,000 and $1.4 million of rental income, net, during 2020, 2019 and 2018, respectively.
At December 31, 2020, the carrying value of the land on our balance sheet was $13.9 million; our leasehold position is subordinate to $67.2 million of mortgage debt incurred by our tenant, the owner/operator of the multi-family complex. In addition, as described in “– Challenges and Uncertainties Facing Certain Tenants and Properties – The Vue,” we have agreed to fund certain capital expenditures and operating cash flow shortfalls at this property. We do not believe that this type of off-balance sheet arrangement has been or will be material to our liquidity and capital resource positions, except to the extent we determine to continue to fund the capital expenditures required by, and the operating cash flow shortfalls at this property. See Note 6 to our consolidated financial statements for additional information regarding this arrangement.
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Critical Accounting Estimates
Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we reconsider and evaluate our estimates and assumptions.
We base our estimates on historical experience, current trends and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could materially differ from any of our estimates under different assumptions or conditions. Our significant accounting policies are discussed in Note 2 of our consolidated financial statements in this report. We believe the accounting estimates listed below are the most critical to aid in fully understanding and evaluating our reported financial results, and they require our most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain.
Rental Income
Rental income includes: (i) base rents that our tenants pay in accordance with the terms of their respective leases reported on a straight-line basis over the non-cancellable term of each lease and (ii) reimbursements by tenants of certain real estate operating expenses. Since many of our leases provide for rental increases at specified intervals, straight-line basis accounting requires us to record as an asset and include in revenues, unbilled rent receivables which we will only receive if the tenant makes all rent payments required through the expiration of the term of the lease. Accordingly, our management must determine, in its judgment, that the unbilled rent receivable applicable to each specific tenant is collectable. We review unbilled rent receivables on a quarterly basis and take into consideration the tenant’s payment history and the financial condition of the tenant. In the event that the collectability of an unbilled rent receivable is unlikely, we are required to write-off the receivable, which has an adverse effect on net income for the year in which the direct write-off is taken, and will decrease total assets and stockholders’ equity.
Purchase Accounting for Acquisition of Real Estate
The fair value of real estate acquired is allocated to acquired tangible assets, consisting of land and building, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and other value of in-place leases based in each case on their fair values. The fair value of the tangible assets of an acquired property (which includes land, building and building improvements) is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land, building and building improvements based on our determination of relative fair values of these assets. We assess fair value of the lease intangibles based on estimated cash flow projections that utilize appropriate discount rates and available market information. The fair values associated with below-market rental renewal options are determined based on our experience and the relevant facts and circumstances that existed at the time of the acquisitions. The portion of the values of the leases associated with below-market renewal options that we deem likely to be exercised are amortized to rental income over the respective renewal periods. The allocation made by us may have a positive or negative effect on net income and may have an effect on the assets and liabilities on the balance sheet.
Carrying Value of Real Estate Portfolio
We review our real estate portfolio on a quarterly basis to ascertain if there are any indicators of impairment to the value of any of our real estate assets, including deferred costs and intangibles, to determine if there is any need for an impairment charge. In reviewing the portfolio, we examine the type of asset, the current financial statements or other available financial information of the tenant, the economic situation in the area in which the asset is located, the economic situation in the industry in which the tenant is involved and the timeliness of the payments made by the tenant under its lease, as well as any current correspondence that may have been had with the tenant, including property inspection reports. For each real estate asset owned for which indicators of impairment exist, we perform a recoverability test by comparing the sum of the estimated undiscounted future
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cash flows attributable to the asset to its carrying amount. Management’s assumptions and estimates include projected rental rates during the holding period and property capitalization rates in order to estimate undiscounted future cash flows. If the undiscounted cash flows are less than the asset’s carrying amount, an impairment loss is recorded to the extent that the estimated fair value is less than the asset’s carrying amount. The estimated fair value is determined using a discounted cash flow model of the expected future cash flows through the useful life of the property. Real estate assets that are expected to be disposed of are valued at the lower of carrying amount or fair value less costs to sell on an individual asset basis. We generally do not obtain any independent appraisals in determining value but rely on our own analysis and valuations. Any impairment charge taken with respect to any part of our real estate portfolio will reduce our net income and reduce assets and stockholders’ equity to the extent of the amount of any impairment charge, but it will not affect our cash flow or our distributions until such time as we dispose of the property.
Item 7A. 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 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 December 31, 2020, our aggregate liability in the event of the early termination of our swaps was $5.3 million.
At December 31, 2020, we had 23 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 December 31, 2020, if there had been an increase of 100 basis points in forward interest rates, the fair market value of the interest rate swaps would have increased by approximately $2.9 million and the net unrealized loss on derivative instruments would have decreased by $2.9 million. If there were a decrease of 100 basis points in forward interest rates, the fair market value of the interest rate swaps would have decreased by approximately $3.1 million and the net unrealized loss on derivative instruments would have increased by $3.1 million. 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, bears interest at fixed rates and accordingly, the effect of changes in interest rates would not impact the amount of interest expense that we incur under these mortgages.
Our variable rate credit facility is sensitive to interest rate changes. At December 31, 2020, a 100 basis point increase of the interest rate on this facility would increase our related interest costs by approximately $130,000 per year and a 100 basis point decrease of the interest rate would decrease our related interest costs by approximately $19,000 per year.
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.
The following table sets forth our debt obligations by scheduled principal cash flow payments and maturity date, weighted average interest rates and estimated fair market value at December 31, 2020:
For the Year Ended December 31,
Fair
Market
Fixed rate:
Variable rate:
Long‐term debt(1) $ — $ 12,950 $ $ — $ — $ — $ 12,950 $ —
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Item 8. Financial Statements and Supplementary Data.
This information appears in Item 15(a) of this Annual Report on Form 10-K, and is incorporated into this Item 8 by reference thereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Not applicable.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
A review and evaluation was performed by our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Annual Report on Form 10-K. Based on that review and evaluation, our CEO and CFO have concluded that our disclosure controls and procedures, as designed and implemented as of December 31, 2020, were effective.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, a company’s principal executive and principal financial officers and effected by a company’s board, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2020. In making this assessment, our management used criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013).
Based on its assessment, our management concluded that, as of December 31, 2020, our internal control over financial reporting was effective based on those criteria.
Changes in Internal Controls over Financial Reporting
There have been no changes in our internal controls over financial reporting, as defined in in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, that occurred during the three months ended December 31, 2020 that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
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Item 9B. Other Information.
Tax Disclosure Update
The section of our prospectus dated August 13, 2020 included in our prospectus supplement dated August 13, 2020 entitled “Federal Income Tax Considerations - Impact of the Tax Cuts and Jobs Act on the Company and its Stockholders- Limitations on Interest Deductibility; Real Property Trades or Businesses Can Elect Out Subject to Longer Asset Cost Recovery Periods:” is hereby superseded, and is amended and restated in its entirety to read as follows:
Limitations on Interest Deductibility; Real Property Trades or Businesses Can Elect Out Subject to Longer
Asset Cost Recovery Periods: The Tax Cuts and Jobs Act, which was signed into law on December 22, 2017 (the “Tax Act” or the “Act”) limits a taxpayer’s net interest expense deduction to 30% of the sum of adjusted taxable income, business interest, and certain other amounts. Adjusted taxable income does not include items of income or expense not allocable to a trade or business, business interest or expense, the new deduction for qualified business income, NOLs, and for years prior to 2022, deductions for depreciation, amortization, or depletion. For partnerships, the interest deduction limit is applied at the partnership level, subject to certain adjustments to the partners for unused deduction limitation at the partnership level. The Act allows a real property trade or business to elect out of this interest limit so long as it uses a 40-year recovery period for nonresidential real property, a 30-year recovery period for residential rental property (40 year recovery period for residential rental property placed in service before 2018), and a 20-year recovery period for related improvements described below. The Consolidated Appropriations Act, 2021, which was signed into law on December 27, 2020, decreased the 40-year recovery period for residential rental property placed in service before 2018 to a 30-year recovery period. Disallowed interest expense is carried forward indefinitely (subject to special rules for partnerships).
Credit Facility Amendment
See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources- Credit Facility” for information regarding the amendment to the facility entered into in March 2021, which extended, until June 30, 2022, our ability to use up to $20.0 million for operating expenses.
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Apart from certain information concerning our executive officers which is set forth in Part I of this Annual Report, additional information required by this Item 10 shall be included in our proxy statement for our 2021 annual meeting of stockholders, to be filed with the SEC not later than April 30, 2021, and is incorporated herein by reference.
Item 11. Executive Compensation.
The information required by this Item 11 will be included in our proxy statement for our 2021 annual meeting of stockholders, to be filed with the SEC not later than April 30, 2021, and is incorporated herein by reference.
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Apart from the equity compensation plan information required by Item 201(d) of Regulation S-K which is set forth below, the information required by this Item 12 will be included in our proxy statement for our 2021 annual meeting of stockholders, to be filed with the SEC not later than April 30, 2021 and is incorporated herein by reference.
Equity Compensation Plan Information
As of December 31, 2020, the only equity compensation plan under which equity compensation may be awarded is our 2019 Incentive Plan, which was approved by our stockholders in June 2019. This plan permits us to grant stock options, restricted stock, restricted stock units and performance based awards to our employees, officers, directors, consultants and other eligible participants. The following table provides information as of December 31, 2020 about shares of our common stock that may be issued upon the exercise of options, warrants and rights under our 2019 Incentive Plan:
Number of
securities
remaining available
Number of for future issuance
securities Weighted‐average under equity
to be issued exercise price compensation
upon exercise of outstanding plans (excluding
of outstanding options, securities
options, warrants warrants reflected in
Plan Category and rights(1) and rights column(a))(2)
(a) (b) (c)
Equity compensation plans approved by security holders 150,052 — 450,398
Equity compensation plans not approved by security holders — — —
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this Item 13 will be included in our proxy statement for our 2021 annual meeting of stockholders, to be filed with the SEC not later than April 30, 2021 and is incorporated herein by reference.
Item 14. Principal Accountant Fees and Services.
The information required by this Item 14 will be included in our proxy statement for our 2021 annual meeting of stockholders, to be filed with the SEC not later than April 30, 2021 and is incorporated herein by reference.
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PART IV
Item 15. Exhibits and Financial Statement Schedules.
(a) Documents filed as part of this Report:
—Report of Independent Registered Public Accounting Firm F-1 through F-2
—Statements:
Consolidated Balance Sheets F-3
Consolidated Statements of Income F-4
Consolidated Statements of Comprehensive Income F-5
Consolidated Statements of Changes in Equity F-6
Consolidated Statements of Cash Flows F-7 through F-8
Notes to Consolidated Financial Statements F-9 through F-37
(2) Financial Statement Schedules:
—Schedule III—Real Estate and Accumulated Depreciation F-38 through F-41
All other schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or the notes thereto.
(b) Exhibits:
3.1 Articles of Amendment and Restatement of One Liberty Properties, Inc.
10.4 Third Amendment to Loan Agreement dated as of March 3, 2021.
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21.1 Subsidiaries of the Registrant
23.1 Consent of Ernst & Young LLP
31.1 Certification of President and Chief Executive Officer
31.2 Certification of Senior Vice President and Chief Financial Officer
32.1 Certification of President and Chief Executive Officer
32.2 Certification of Senior Vice President and Chief Financial Officer
* Indicates a management contract or compensatory plan or arrangement.
The file number for all the exhibits incorporated by reference is 001- 09279 other than exhibit 4.1 whose file number is 333-86850.
Item 16. Form 10-K Summary
Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange, the Registrant has duly caused this report to be signed on its behalf of the undersigned, thereunto duly authorized.
March 12, 2021 ONE LIBERTY PROPERTIES, INC.
By: /s/ PATRICK J. CALLAN, JR.
Patrick J. Callan, Jr.
President and Chief Executive Officer
Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ CHARLES BIEDERMANCharles Biederman Director March 12, 2021
Joseph A. DeLuca Director March __, 2021
/s/ EDWARD GELLERTEdward Gellert Director March 12, 2021
/s/ JEFFREY A. GOULDJeffrey A. Gould Director March 12, 2021
/s/ J. ROBERT LOVEJOYJ. Robert Lovejoy Director March 12, 2021
/s/ LEOR SIRILeor Siri Director March 12, 2021
/s/ KAREN A. TILLKaren A. Till Director March 12, 2021
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Signature Title Date
/s/ EUGENE I. ZURIFFEugene I. Zuriff Director March 12, 2021
David W. Kalish
Karen Dunleavy
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of One Liberty Properties, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of One Liberty Properties, Inc. and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.
Adoption of ASU No. 2016-02
As discussed in Note 3 to the consolidated financial statements, the Company changed its method of accounting for leases in 2019 due to the adoption of ASU No. 2016-02, Leases (Topic 842), and the related amendments.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.
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Impairment of Real Estate Investments
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1989.
New York, New York
March 12, 2021
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Amounts in Thousands, Except Par Value)
December 31,
ASSETS
Real estate investments, at cost
Investment in unconsolidated joint ventures 10,702 11,061
Unamortized intangible lease assets, net 24,703 26,068
Escrow, deposits and other assets and receivables 20,667 10,894
LIABILITIES AND EQUITY
Liabilities:
Accrued expenses and other liabilities 21,498 14,587
Unamortized intangible lease liabilities, net 11,189 12,421
Commitments and contingencies
Equity:
One Liberty Properties, Inc. stockholders’ equity:
Preferred stock, $1 par value; 12,500 shares authorized; none issued — —
Accumulated other comprehensive loss (5,002) (1,623)
Distributions in excess of net income (37,539) (28,382)
Total One Liberty Properties, Inc. stockholders’ equity 290,767 290,763
Non-controlling interests in consolidated joint ventures(1) 1,193 1,221
See accompanying notes.
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Amounts in Thousands, Except Per Share Data)
Year Ended December 31,
Revenues:
Lease termination fees 15 950 372
Operating expenses:
Impairment due to casualty loss 430 — —
Other operating income
Other income and expenses:
Equity in earnings of unconsolidated joint ventures 38 16 1,304
Prepayment costs on debt (1,123) (827) —
Interest:
Amortization and write-off of deferred financing costs (976) (995) (985)
Net income attributable to non-controlling interests (6) (533) (899)
Weighted average number of common shares outstanding:
Per common share attributable to common stockholders:
See accompanying notes.
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
(Amounts in Thousands)
Year Ended December 31,
Other comprehensive (loss) income
Other comprehensive (loss) gain (3,383) (3,522) 1,738
Net income attributable to non-controlling interests (6) (533) (899)
See accompanying notes.
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ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the Three Years Ended December 31, 2020
(Amounts in Thousands, Except Per Share Data)
Accumulated Non‐
Undistributed Controlling
Accumulated Net Income Interests in
Other (Distributions Consolidated
Common Paid-in Comprehensive in Excess of Joint
Stock Capital Income (Loss) Net Income) Ventures Total
Distributions—common stock
Cash — $1.80 per share — — — (34,652) — (34,652)
Restricted stock vesting 106 (106) — — — —
Other comprehensive income — — 1,735 — 3 1,738
Distributions—common stock
Cash — $1.80 per share — — — (35,663) — (35,663)
Restricted stock vesting 115 (115) — — — —
Compensation expense—restricted stock — 3,870 — — — 3,870