10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC   20549

FORM 10-Q

xQuarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2014

OR

oTransition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 001-09279

ONE LIBERTY PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

MARYLAND	13-3147497
(State or other jurisdiction of	(I.R.S. employer
incorporation or organization)	identification number)

60 Cutter Mill Road, Great Neck, New York	11021
(Address of principal executive offices)	(Zip code)

(516) 466-3100

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of August 1, 2014, the registrant had 16,127,360 shares of common stock outstanding.

One Liberty Properties, Inc. and Subsidiaries

Table of Contents

		Page No.
Part I - Financial Information
Item 1.	Financial Statements
	Consolidated Balance Sheets — June 30, 2014 and December 31, 2013	1
	Consolidated Statements of Income — Three and six months ended June 30, 2014 and 2013	2
	Consolidated Statements of Comprehensive Income — Three and six months ended June 30, 2014 and 2013	4
	Consolidated Statements of Changes in Equity — Six months ended June 30, 2014 and year ended December 31, 2013	5
	Consolidated Statements of Cash Flows — Six months ended June 30, 2014 and 2013	6
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34
Part II - Other Information
Item 6.	Exhibits	34

Part I — FINANCIAL INFORMATION

Item 1.    Financial Statements

ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in Thousands, Except Par Value)

	June 30, 2014			December 31, 2013
	(Unaudited)
Assets
Real estate investments, at cost
Land	$	169,242		$	153,529
Buildings and improvements	432,641			413,829
Total real estate investments, at cost	601,883			567,358
Less accumulated depreciation	77,213			71,171
Real estate investments, net	524,670			496,187
Properties held-for-sale	—			5,177
Investment in unconsolidated joint ventures	4,833			4,906
Cash and cash equivalents	18,338			16,631
Restricted cash	1,894			—
Unbilled rent receivable	14,352			13,743
Unamortized intangible lease assets, net	26,517			26,035
Escrow, deposits and other assets and receivables	4,268			5,690
Investment in BRT Realty Trust at market (related party)	—			262
Unamortized deferred financing costs, net	3,343			3,267
Total assets	$	598,215		$	571,898
Liabilities and Equity
Liabilities:
Mortgages payable	$	284,373		$	278,045
Line of credit	36,850			23,250
Dividends payable	5,948			5,806
Accrued expenses and other liabilities	10,631			7,790
Unamortized intangible lease liabilities, net	9,214			6,917
Total liabilities	347,016			321,808
Commitments and contingencies	—			—
Equity:
One Liberty Properties, Inc. stockholders’ equity:
Preferred stock, $1 par value; 12,500 shares authorized; none issued	—			—
Common stock, $1 par value; 25,000 shares authorized; 15,594 and 15,221 shares issued and outstanding	15,594			15,221
Paid-in capital	216,474			210,324
Accumulated other comprehensive loss	(2,172		)	(490		)
Accumulated undistributed net income	19,970			23,877
Total One Liberty Properties, Inc. stockholders’ equity	249,866			248,932
Non-controlling interests in joint ventures	1,333			1,158
Total equity	251,199			250,090
Total liabilities and equity	$	598,215		$	571,898

See accompanying notes to consolidated financial statements.

1

ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Amounts in Thousands, Except Per Share Data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenues:
Rental income, net	$	14,396		$	11,981		$	28,798		$	23,843
Lease termination fee	1,269			—			1,269			—
Total revenues	15,665			11,981			30,067			23,843
Operating expenses:
Depreciation and amortization	3,723			2,681			7,300			5,315
General and administrative (including $610, $572 $1,219 and $1,144, respectively, to related party)	2,134			1,944			4,344			3,904
Federal excise and state taxes	107			184			169			226
Real estate expenses (including $212, $150, $425 and $300 respectively, to related party)	877			751			1,976			1,523
Leasehold rent	77			77			154			154
Real estate acquisition costs	88			126			128			277
Total operating expenses	7,006			5,763			14,071			11,399
Operating income	8,659			6,218			15,996			12,444
Other income and expenses:
Equity in earnings of unconsolidated joint ventures	130			57			263			391
Gain on disposition of real estate - unconsolidated joint venture	—			2,807			—			2,807
Gain on sale - unconsolidated joint venture interest	—			1,898			—			1,898
Gain on sale - investment in BRT Realty Trust (related party)	134			—			134			—
Other income	2			11			10			80
Interest:
Expense	(4,035		)	(3,158		)	(7,988		)	(6,261		)
Amortization of deferred financing costs	(228		)	(226		)	(466		)	(439		)
Income from continuing operations	4,662			7,607			7,949			10,920
Income from discontinued operations	—			145			13			281
Net income	4,662			7,752			7,962			11,201
Less: net income attributable to non-controlling interests	(22		)	(16		)	(49		)	(15		)
Net income attributable to One Liberty Properties, Inc.	$	4,640		$	7,736		$	7,913		$	11,186

Continued on next page

2

ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Amounts in Thousands, Except Per Share Data)

(Unaudited) (Continued)

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Weighted average number of common shares outstanding:
Basic	15,518		14,844		15,436		14,759
Diluted	15,618		14,944		15,536		14,859
Per common share attributable to common stockholders — basic:
Income from continuing operations	$	.29	$	.50	$	.49	$	.71
Income from discontinued operations	—		.01		—		.02
	$	.29	$	.51	$	.49	$	.73
Per common share attributable to common stockholders — diluted:
Income from continuing operations	$	.29	$	.49	$	.49	$	.71
Income from discontinued operations	—		.01		—		.02
	$	.29	$	.50	$	.49	$	.73
Cash distributions declared per share of common stock	$	.37	$	.35	$	.74	$	.70

See accompanying notes to consolidated financial statements.

3

ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in Thousands)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Net income	$	4,662		$	7,752		$	7,962		$	11,201
Other comprehensive (loss) gain
Net unrealized (loss) gain on available-for-sale securities	(130		)	(1		)	(125		)	45
Net unrealized (loss) gain on derivative instruments	(867		)	730			(1,585		)	908
One Liberty Property’s share of joint venture net unrealized gain on derivative instruments	7			51			4			61
Other comprehensive (loss) gain	(990		)	780			(1,706		)	1,014
Comprehensive income	3,672			8,532			6,256			12,215
Comprehensive income attributable to non-controlling interests	(22		)	(16		)	(49		)	(15		)
Unrealized loss on derivative instruments attributable to non-controlling interests	14			—			24			—
Comprehensive income attributable to One Liberty Properties, Inc.	$	3,664		$	8,516		$	6,231		$	12,200

See accompanying notes to consolidated financial statements.

4

ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the six month period ended June 30, 2014 (Unaudited)

and the year ended December 31, 2013

(Amounts in Thousands, Except Per Share Data)

	Common Stock		Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Undistributed Net Income			Non- Controlling Interests in Joint Ventures			Total
Balances, December 31, 2012	$	14,598	$	196,107		$	(1,578	)	$	28,001		$	931		$	238,059
Distributions - common stock Cash - $1.42 per share	—		—			—			(21,999		)	—			(21,999		)
Shares issued through equity offering program — net	363		8,802			—			—			—			9,165
Restricted stock vesting	50		(50		)	—			—			—			—
Shares issued through dividend reinvestment plan	210		4,025			—			—			—			4,235
Contributions from non-controlling interests	—		—			—			—			480			480
Distributions to non-controlling interests	—		—			—			—			(298		)	(298		)
Compensation expense - restricted stock	—		1,440			—			—			—			1,440
Net income	—		—			—			17,875			49			17,924
Other comprehensive income (loss)	—		—			1,088			—			(4		)	1,084
Balances, December 31, 2013	15,221		210,324			(490		)	23,877			1,158			250,090
Distributions - common stock Cash - $.74 per share	—		—			—			(11,820		)	—			(11,820		)
Shares issued through equity offering program — net	156		3,148			—			—			—			3,304
Restricted stock vesting	101		(101		)	—			—			—			—
Shares issued through dividend reinvestment plan	116		2,183			—			—			—			2,299
Contribution from non-controlling interest	—		—			—			—			306			306
Distributions to non-controlling interests	—		—			—			—			(156		)	(156		)
Compensation expense - restricted stock	—		920			—			—			—			920
Net income	—		—			—			7,913			49			7,962
Other comprehensive loss	—		—			(1,682		)	—			(24		)	(1,706		)
Balances, June 30, 2014	$	15,594	$	216,474		$	(2,172	)	$	19,970		$	1,333		$	251,199

See accompanying notes to consolidated financial statements.

5

ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in Thousands)

(Unaudited)

	Six Months Ended June 30,
	2014			2013
Cash flows from operating activities:
Net income	$	7,962		$	11,201
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on disposition of real estate held by unconsolidated joint venture	—			(2,807		)
Gain on sale - unconsolidated joint venture interest	—			(1,898		)
Gain on sale of available-for-sale securities (to related party in 2014)	(134		)	(6		)
Increase in rental income from straight-lining of rent	(609		)	(414		)
Increase in rental income from amortization of intangibles relating to leases	(50		)	(66		)
Amortization of restricted stock expense	920			766
Equity in earnings of unconsolidated joint ventures	(263		)	(391		)
Distributions of earnings from unconsolidated joint ventures	289			860
Depreciation and amortization	7,300			5,386
Amortization and write-off of financing costs	466			439
Changes in assets and liabilities:
Decrease (increase) in escrow, deposits, other assets and receivables	1,242			(109		)
(Decrease) increase in accrued expenses and other liabilities	(539		)	112
Net cash provided by operating activities	16,584			13,073
Cash flows from investing activities:
Purchase of real estate	(33,165		)	(6,215		)
Improvements to real estate	(645		)	(627		)
Distributions of return of capital from unconsolidated joint ventures	50			5,284
Net proceeds from sale of real estate	5,177			—
Net proceeds from disposition of unconsolidated joint venture interest	—			13,444
Payment of leasing commissions	(40		)	(40		)
Net proceeds from sale of available-for-sale securities (to related party in 2014)	266			19
Net cash (used in) provided by investing activities	(28,357		)	11,865
Cash flows from financing activities:
Scheduled amortization payments of mortgages payable	(3,765		)	(3,169		)
Repayment of mortgages payable	(19,003		)	(2,816		)
Proceeds from mortgage financings	29,096			7,867
Proceeds from sale of common stock, net	3,304			7,771
Proceeds from bank line of credit	27,500			3,500
Repayment on bank line of credit	(13,900		)	(3,500		)
Issuance of shares through dividend reinvestment plan	2,299			2,278
Payment of financing costs	(523		)	(174		)
Capital contributions from non-controlling interests	306			481
Distribution to non-controlling interests	(156		)	(258		)
Cash distributions to common stockholders	(11,678		)	(10,564		)
Net cash provided by financing activities	13,480			1,416
Net increase in cash and cash equivalents	1,707			26,354
Cash and cash equivalents at beginning of period	16,631			14,577
Cash and cash equivalents at end of period	$	18,338		$	40,931

Continued on next page

6

ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in Thousands)

(Unaudited) (Continued)

	Six Months Ended June 30,
	2014		2013
Supplemental disclosures of cash flow information:
Cash paid during the period for interest expense	$	8,036	$	6,338
Supplemental schedule of non-cash investing and financing activities:
Purchase accounting allocation - intangible lease assets	1,989		762
Purchase accounting allocation - intangible lease liabilities	2,671		857
Restricted cash for tenant improvements and other reserve	1,894		—

See accompanying notes to consolidated financial statements.

7

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014

Note 1 - Organization and Background

One Liberty Properties, Inc. (“OLP”) was incorporated in 1982 in Maryland.  OLP is a self-administered and self-managed real estate investment trust (“REIT”).  OLP acquires, owns and manages a geographically diversified portfolio of retail (including furniture stores, restaurants, office supply stores and supermarkets), industrial, flex, office, health and fitness and other properties, a substantial portion of which are subject to long-term net leases.  As of June 30, 2014, OLP owned 113 properties, including six properties owned by consolidated joint ventures and five properties owned by unconsolidated joint ventures. The 113 properties are located in 30 states.

Note 2 - Basis of Preparation

Principles of Consolidation/Basis of Preparation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by U.S. Generally Accepted Accounting Principles (“GAAP”) for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statement disclosures. In the opinion of management, all adjustments necessary for fair presentation (including normal recurring accruals) have been included. The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results for the full year. These statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.

The consolidated financial statements include the accounts and operations of OLP, its wholly-owned subsidiaries and its investment in six joint ventures in which the Company, as defined, has a controlling interest.  OLP and its consolidated subsidiaries are hereinafter referred to as the “Company”.  Material intercompany items and transactions have been eliminated in consolidation.

Investment in Joint Ventures

The Company assesses the accounting treatment for each joint venture investment. This assessment includes a review of each joint venture or limited liability company agreement to determine the rights of each party and whether those rights are protective or participating. The agreements typically contain certain protective rights such as the requirement of partner approval to sell, finance or refinance the property and to pay capital expenditures and operating expenditures outside of the approved budget or operating plan. In situations where the Company and its partner, among other things, (i) approve the annual budget, (ii) approve

8

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 2 - Basis of Preparation (continued)

certain expenditures, (iii) prepare or review and approve the joint venture’s tax return before filing, and (iv) approve each lease at each property, the Company does not consolidate the joint venture as the Company considers these to be substantive participation rights that result in shared power over the activities that most significantly impact the performance of the joint venture.  Additionally, the Company assesses the accounting treatment for any interests pursuant to which the Company may have a variable interest as a lessor.  Leases may contain certain protective rights such as the right of sale and the receipt of certain escrow deposits.  In situations where the Company does not have the power over tenant activities that most significantly impact the performance of the property the Company would not consolidate.

The Financial Accounting Standard’s Board, or FASB’s, guidance for determining whether an entity is a variable interest entity, or VIE, requires the performance of a qualitative rather than a quantitative analysis to determine the primary beneficiary of a VIE. Under this guidance, an entity would be required to consolidate a VIE if it has (i) the power to direct the activities that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.

In June 2014, the Company purchased land for $6,510,000 in Sandy Springs, Georgia improved with a 196 unit apartment complex, and simultaneously entered into a long-term triple net ground lease with the owner/operator of this complex (see Note 4).  The Company determined that it has a variable interest through its ground lease and the owner/operator is a VIE because its equity investment at risk is not sufficient to finance its activities without additional subordinated financial support.  The Company’s fee interest in the land is collateral for the owner/operator’s loan on the buildings located at this property. The Company further determined that it is not the primary beneficiary because the Company does not have the power to direct the activities that most significantly impact the owner/operator’s economic performance such as management, operational budgets and other rights, including leasing of the units and therefore, will not consolidate the VIE for financial statement purposes.  Accordingly, the Company will account for its investment as land and the revenue from the ground lease as Rental Income, net.  At June 30, 2014, the Company’s maximum exposure to loss as a result of the ground lease is an aggregate of $6,540,000, representing the $6,516,000 carrying value of the land, included in Real estate investments, net, on the consolidated balance sheets and the rent receivable of $24,000.

In June 2014, the Company entered into a joint venture, in which the Company has a 95% equity interest, and acquired a property located in Joppa, Maryland (see Note 4).  The Company also made a senior preferred equity investment in the joint venture.  The Company has determined that this joint venture is a VIE as the Company’s voting rights are not proportional to its economic interests and substantially all of the joint venture’s activities are conducted by the Company.  The Company further determined that it is the primary beneficiary of the VIE as it has the power to direct the activities that most significantly impact the joint venture’s performance including management, approval of expenditures, and sale of the property, as well as the obligation to absorb the losses or rights to receive benefits

9

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 2 - Basis of Preparation (continued)

from the VIE.  Accordingly, the Company consolidates the operations of this joint venture for financial statement purposes.

For the consolidated VIE, the carrying amounts and classification in the Company’s consolidated balance sheets were assets (none of which are restricted) consisting of land of $3,803,000 and building and improvements of $8,142,000, accrued expenses and other liabilities of $78,000 and non-controlling interest in joint ventures of $5,000. The joint venture’s creditors do not have recourse to the assets of the Company other than those held by the joint venture.

With respect to five consolidated joint ventures in which the Company has between an 85% to 95% interest, the Company has determined that (i) such ventures are not VIE’s and (ii) the Company exercises substantial operating control and accordingly, such ventures are consolidated for financial statement purposes.

The Company accounts for its investments in five unconsolidated joint ventures under the equity method of accounting.  All investments in these five joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result, none of these five joint ventures are VIE’s.  In addition, although the Company is the managing member, it does not exercise substantial operating control over these entities, and therefore the entities are not consolidated. These investments are recorded initially at cost, as investments in unconsolidated joint ventures, and subsequently adjusted for their share of equity in earnings, cash contributions and distributions.  None of the joint venture debt is recourse to the Company, subject to standard carve-outs.

Reclassification

Certain amounts previously reported in the consolidated financial statements for the three and six months ended June 30, 2013 relating to the operations of two properties that were sold in February 2014 have been reclassified to discontinued operations in the accompanying consolidated financial statements to conform to the current period’s presentation.

10

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 3 - Earnings Per Common Share

Basic earnings per share was determined by dividing net income allocable to common stockholders for the applicable period by the weighted average number of shares of common stock outstanding during such period. Net income is also allocated to the unvested restricted stock during the applicable period, as the restricted stock is entitled to receive dividends and is therefore considered a participating security.  Unvested restricted stock is not allocated net losses and/or any excess of dividends declared over net income; such amounts are allocated entirely to the common stockholders other than the holders of unvested restricted stock.  The restricted stock units awarded under the Pay-for-Performance program described in Note 13 are excluded from the basic earnings per share calculation, as these units are not participating securities.

Diluted earnings per share reflects the potential dilution that could occur if securities or other rights exercisable for, or convertible into, common stock were exercised or converted or otherwise resulted in the issuance of common stock that shared in the earnings of the Company.  For the three and six months ended June 30, 2014 and 2013, the diluted weighted average number of common shares includes 100,000 shares (of an aggregate of 200,000 shares) of common stock underlying the restricted stock units awarded pursuant to the Pay-For-Performance program.  These 100,000 shares may vest upon satisfaction of the total stockholder return metric. The number of shares that would be issued pursuant to this metric is based on the market price and dividends paid as of the end of each quarterly period assuming the end of that quarterly period was the end of the vesting period.  The remaining 100,000 shares of common stock underlying the restricted stock units awarded under the Pay-For-Performance program are not included during the three and six months ended June 30, 2014 and 2013, as they did not meet the return on capital performance metric during such periods.

There were no options outstanding to purchase shares of common stock or other rights exercisable for, or convertible into, common stock during the six months ended June 30, 2014 and 2013.

11

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 3 - Earnings Per Common Share (continued)

The following table provides a reconciliation of the numerator and denominator of earnings per share calculations (amounts in thousands, except per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Numerator for basic and diluted earnings per share:
Income from continuing operations	$	4,662		$	7,607		$	7,949		$	10,920
Less: net income attributable to non-controlling interests	(22		)	(16		)	(49		)	(15		)
Less: earnings allocated to unvested shares	(178		)	—			(356		)	—
Income from continuing operations available for common stockholders	4,462			7,591			7,544			10,905
Discontinued operations	—			145			13			281
Net income available for common stockholders, basic and diluted	$	4,462		$	7,736		$	7,557		$	11,186
Denominator for basic earnings per share:
- weighted average common shares	15,518			14,844			15,436			14,759
- weighted average unvested restricted stock shares	—			470			—			477
	15,518			15,314			15,436			15,236
Effect of diluted securities:
- restricted stock units awarded under Pay-for-Performance program	100			100			100			100
Denominator for diluted earnings per share
- weighted average shares	15,618			15,414			15,536			15,336
Earnings per common share, basic	$	.29		$	.51		$	.49		$	.73
Earnings per common share, diluted	$	.29		$	.50		$	.49		$	.73
Net Income attributable to One Liberty Properties, Inc. common stockholders, net of non-controlling interests:
Income from continuing operations	$	4,640		$	7,591		$	7,900		$	10,905
Income from discontinued operations	—			145			13			281
Net income attributable to One Liberty Properties, Inc.	$	4,640		$	7,736		$	7,913		$	11,186

12

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 4 - Real Estate Acquisitions and Contingent Liability

The following chart details the Company’s real estate acquisitions, all of which were acquired for cash, during the six months ended June 30, 2014 (amounts in thousands):

Description of Property	Date Acquired	Contract Purchase Price		Third Party Real Estate Acquisition Costs (a)
Total Wine and More retail store, Greensboro, North Carolina	January 21, 2014	$	2,971	$	20
Chuck E Cheese restaurant, Indianapolis, Indiana	January 23, 2014	2,138		9
Savers Thrift Superstore, Highlands Ranch, Colorado	May 7, 2014	4,825		45
Hobby Lobby retail store, Woodbury, Minnesota	May 21, 2014	4,770		13
Land - River Crossing Apartments, Sandy Springs, Georgia (b)	June 4, 2014	6,510		—		(c)
Noxell Corporation industrial building, Joppa, Maryland (d)	June 26, 2014	11,650		—		(c)
Other (e)		—		41
Totals		$	32,864	$	128

(a)Included as an expense in the accompanying consolidated statement of income.

(b)The Company’s fee interest in the land is collateral for the tenant’s mortgage loan secured by the buildings located at this property.

(c)Transaction costs aggregating $301 incurred with these asset acquisitions were capitalized.

(d)Owned by a joint venture in which the Company has a 95% interest.  The non-controlling interest contributed $306 for its 5% interest, which was equal to the fair value at the date of purchase.

(e)Costs incurred for potential acquisitions and properties purchased in 2013.

The following chart provides the allocation of the purchase price for the Company’s real estate acquisitions during the six months ended June 30, 2014 (amounts in thousands):

					Building		Intangible Lease
Description of Property	Land		Building		Improvements		Asset			Liability			Total
Total Wine and More retail store, Greensboro, North Carolina	$	1,046	$	1,468	$	83	$	374		$	—		$	2,971
Chuck E Cheese restaurant, Indianapolis, Indiana	853		1,321		145		94			(275		)	2,138
Savers Thrift Superstore, Highlands Ranch, Colorado	2,231		2,614		277		846			(1,143		)	4,825
Hobby Lobby retail store, Woodbury, Minnesota	1,190		3,667		335		734			(1,156		)	4,770
Land - River Crossing Apartments, Sandy Springs, Georgia (a)	6,516		—		—		—			—			6,516
Noxell Corporation industrial building, Joppa, Maryland (b)	3,803		7,991		151		—			—			11,945
Subtotals	15,639		17,061		991		2,048			(2,574		)	33,165
Other (c)	74		70		18		(59		)	(97		)	6
Totals	$	15,713	$	17,131	$	1,009	$	1,989		$	(2,671	)	$	33,171

13

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 4 - Real Estate Acquisitions and Contingent Liability (continued)

(a)Includes capitalized transaction costs of $6 incurred with this asset acquisition.

(b)Includes capitalized transaction costs of $295 incurred with this asset acquisition.

(c)Adjustments to finalize intangibles relating to properties purchased in 2013.

Each property purchased by the Company in 2014 is net leased by a single tenant pursuant to a lease that expires between 2015 through 2044.

In June 2014, the Company purchased land in Sandy Springs, Georgia improved with a 196 unit apartment complex, for a land purchase price of $6,510,000 and simultaneously entered into a long-term triple net ground lease with the owner/operator of this complex.  Pursuant to the terms of the ground lease, the owner/operator is obligated to make certain unit renovations as and when units become vacant.  A cash reserve of $1,894,000 was received by the Company to cover this renovation work and other reserve requirements, which is included in Restricted cash on the consolidated balance sheet.

At the time of the closing, the owner/operator obtained a $16,230,000 mortgage which, together with the Company’s purchase of the land, provided substantially all of the aggregate costs to acquire the complex.  The Company was required to provide its land as collateral for the mortgage loan; accordingly the land position is subordinated to the mortgage.

As a result of the 2014 acquisitions, the Company recorded intangible lease assets of $2,048,000 and intangible lease liabilities of $2,574,000, representing the value of the origination costs and acquired leases.  As of June 30, 2014, the weighted average amortization period for these acquisitions is 7.7 years for the intangible lease assets and 8.4 years for the intangible lease liabilities. The Company assessed the fair value of the lease intangibles based on estimated cash flow projections that utilize appropriate discount rates and available market information. Such inputs are Level 3 (as defined in Note 14) in the fair value hierarchy. The Company is currently in the process of finalizing the purchase price allocations for four properties that were acquired during the three months ended June 30, 2014; therefore, these allocations are preliminary and subject to change.

Note 5 — Lease Termination Fee Income

In June 2014, the Company received a $1,269,000 lease termination fee from a retail tenant in a lease buy-out transaction.  In connection with the receipt of this fee, the Company wrote-off $150,000 as an offset to rental income, representing the entire balance of the unbilled rent receivable and the intangible lease asset related to this property.  The Company re-leased this property simultaneously with the termination of the existing tenant’s lease.

14

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 6 - Investment in Unconsolidated Joint Ventures

At June 30, 2014 and December 31, 2013, the Company had investments in five unconsolidated joint ventures, each of which owned and operated one property. The Company’s equity investment in such unconsolidated joint ventures at such dates totaled $4,833,000 and $4,906,000, respectively. In addition to the $2,807,000 gain on the sale of a tenant-in-common property in the three and six months ended June 30, 2013, the Company recorded equity in earnings of $263,000 and $391,000 for the six months ended June 30, 2014 and 2013, respectively, and $130,000 and $57,000 for the three months ended June 30, 2014 and 2013, respectively.

Additionally, in April 2013, the Company sold its 90% equity interest in a joint venture to its partner and recorded a gain of $1,898,000.

Note 7 - Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its tenants to make required rent payments.  If the financial condition of a specific tenant were to deteriorate resulting in an impairment of its ability to make payments, additional allowances may be required.  At June 30, 2014 and December 31, 2013, there was no balance in allowance for doubtful accounts.

The Company records bad debt expense as a reduction of rental income. For the three and six months ended June 30, 2014 and 2013, the Company did not incur any bad debt expense.

Note 8 - Discontinued Operations and Sale of Properties

On February 3, 2014, the Company sold two properties located in Michigan for a total sales price of $5,177,000, net of closing costs.  At December 31, 2013, the Company recorded a $61,700 impairment charge representing the loss on the sale of these properties.  The following table summarizes the components of income from discontinued operations applicable to these properties (amounts in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Rental income	$	—	$	246	$	141	$	486
Depreciation and amortization	—		36		—		72
Real estate expenses	—		—		17		1
Interest expense	—		65		111		132
Total expenses	—		101		128		205
Income from discontinued operations	$	—	$	145	$	13	$	281

15

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 9 - Line of Credit

The Company has a $75,000,000 revolving credit facility with Manufacturer’s & Trader’s Trust Company, VNB New York Corp., Bank Leumi USA and Israel Discount Bank of New York.  This facility matures March 31, 2015 and provides that the Company pay interest at the greater of (i) 90 day LIBOR plus 3% (3.23% at June 30, 2014) and (ii) 4.75% per annum, and there is an unused facility fee of .25% per annum.  At June 30, 2014 and August 1, 2014, there were outstanding balances of $36,850,000 and $35,450,000, respectively, under the facility. The Company was in compliance with all covenants at June 30, 2014.

Note 10 - Compensation and Services Agreement

The Company agreed to pay fees of $3,300,000 and $3,465,000 in 2014 and 2015, respectively (including overhead expenses of $186,375 and $195,694 and property management fees, included in real estate expenses on the income statement, of $850,000 and $892,500 in 2014 and 2015, respectively) pursuant to the compensation and services agreement, as amended, with Majestic Property Management Corp.  Majestic Property Management Corp is wholly-owned by the Vice Chairman of the Company’s Board of Directors.   The 2014 fee represents an increase of $400,000 over the 2013 fee and the 2015 fee represents a $165,000 increase over the 2014 fee. The results of a report prepared by an independent compensation consultant were used to evaluate and support these increases.

Note 11 - Common Stock Cash Dividend

On June 11, 2014, the Board of Directors declared a quarterly cash dividend of $.37 per share on the Company’s common stock, totaling $5,948,000. The quarterly dividend was paid on July 2, 2014 to stockholders of record on June 25, 2014.

Note 12 - Shares Issued through Equity Offering Program

On March 20, 2014, the Company entered into an amended and restated equity offering sales agreement to sell shares of the Company’s common stock from time to time with an aggregate sales price of up to approximately $38,360,000, through an “at the market” equity offering program.  During the six months ended June 30, 2014, the Company sold 156,172 shares for proceeds of $3,402,000, net of commissions of $34,000, and incurred offering costs, primarily professional fees, of $98,000.  The Company has not sold any additional shares subsequent to June 30, 2014.

16

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 13 - Stock Based Compensation

The Company’s 2012 Incentive Plan, approved by the Company’s stockholders in June 2012, permits the Company to grant, among other things, stock options, restricted stock, restricted stock units and performance share awards and any one or more of the foregoing to its employees, officers, directors and consultants.  A maximum of 600,000 shares of the Company’s common stock is authorized for issuance pursuant to this Plan, of which 229,000 shares of restricted stock are outstanding as of June 30, 2014.  An aggregate of 452,000 shares of restricted stock and restricted stock units are outstanding under the Company’s 2003 and 2009 equity incentive plans (collectively, the “Prior Plans”) and have not yet vested.  No additional awards may be granted under the Prior Plans.

The restricted stock grants are charged to general and administrative expense over the respective vesting periods based on the market value of the common stock on the grant date. Substantially all the outstanding restricted stock awards provide for vesting upon the fifth anniversary of the date of grant and under certain circumstances may vest earlier.  For accounting purposes, the restricted stock is not included in the shares shown as outstanding on the balance sheet until they vest; however dividends are paid on the unvested shares.

On September 14, 2010, the Board of Directors approved a Pay-for-Performance program under the Company’s 2009 Incentive Plan and awarded 200,000 performance share awards in the form of restricted stock units (the “Units”). The holders of Units are not entitled to dividends or to vote the underlying shares until the Units vest and shares are issued. Accordingly, for accounting purposes, the shares underlying the Units are not included in the shares shown as outstanding on the balance sheet.  If the defined performance criteria are satisfied in full at June 30, 2017, one share of the Company’s common stock will vest and be issued for each Unit outstanding and a pro-rata portion of the Units will vest and be issued if the performance criteria fall between defined ranges.  In the event that the performance criteria are not satisfied in whole or in part at June 30, 2017, the unvested Units will be forfeited and no shares of the Company’s common stock will be issued for those Units.  No Units were forfeited or vested in the six months ended June 30, 2014.

As of June 30, 2014 and December 31, 2013, there were no options outstanding under the Company’s equity incentive plans.

17

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 13 - Stock Based Compensation (continued)

The following is a summary of the activity of the equity incentive plans (excluding, except as otherwise noted, the 200,000 Units):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014			2013
Restricted share grants	—		—		118,850			112,650
Per share grant price	—		—		$	20.54		$	21.59
Deferred compensation to be recognized over vesting period	—		—		$	2,441,000		$	2,432,000
Non-vested shares:
Non-vested beginning of period	481,045		470,015		470,015			407,460
Grants	—		—		118,850			112,650
Vested during period	—		—		(101,300		)	(50,095		)
Forfeitures	—		—		(6,520		)	—
Non-vested end of period	481,045		470,015		481,045			470,015
Average per share value of non-vested shares (based on grant price)	$	14.55	$	14.22	$	14.55		$	14.22
Value of shares vested during the period (based on grant price)	$	—	$	—	$	621,000		$	876,000
The total charge to operations for all incentive plans, including the 200,000 Units, is as follows:
Outstanding restricted stock grants	$	419,000	$	335,000	$	862,000		$	702,000
Outstanding restricted stock units	29,000		34,000		58,000			64,000
Total charge to operations	$	448,000	$	369,000	$	920,000		$	766,000

As of June 30, 2014, there were approximately $5,741,000 of total compensation costs related to non-vested awards that have not yet been recognized, including $344,000 related to the Pay-for-Performance program (net of forfeiture and performance assumptions which are re-evaluated quarterly). These compensation costs will be charged to general and administrative expense over the remaining respective vesting periods. The weighted average vesting period is approximately 2.9 years.

18

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 14 - Fair Value Measurements

The Company measures the fair value of financial instruments based on the assumptions that market participants would use in pricing the asset or liability.  As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions.  In accordance with the fair value hierarchy, Level 1 assets/liabilities are valued based on quoted prices for identical instruments in active markets, Level 2 assets/liabilities are valued based on quoted prices in active markets for similar instruments, on quoted prices in less active or inactive markets, or on other “observable” market inputs and Level 3 assets/liabilities are valued based significantly on “unobservable” market inputs.

The carrying amounts of cash and cash equivalents, restricted cash, escrow, deposits and other assets and receivables, and accrued expenses and other liabilities are not measured at fair value on a recurring basis, but are considered to be recorded at amounts that approximate fair value.

At June 30, 2014, the $289,447,000 estimated fair value of the Company’s mortgages payable is more than their carrying value by approximately $5,074,000 assuming a blended market interest rate of 4.8% based on the 9.2 year weighted average remaining term of the mortgages.  At December 31, 2013, the $283,142,000 estimated fair value of the Company’s mortgages payable is more than their carrying value by approximately $5,097,000 assuming a blended market interest rate of 5% based on the 9.0 year weighted average remaining term of the mortgages.

At June 30, 2014 and December 31, 2013, the $36,850,000 and $23,250,000, respectively, carrying amount of the Company’s line of credit approximates its fair value.

The fair value of the Company’s mortgages payable and line of credit are estimated using unobservable inputs such as available market information and discounted cash flow analysis based on borrowing rates the Company believes it could obtain with similar terms and maturities. These fair value measurements fall within Level 3 of the fair value hierarchy.

Considerable judgment is necessary to interpret market data and develop estimated fair value.  The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

19

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 14 - Fair Value Measurements (continued)

Financial Instruments Measured at Fair Value

The fair value of the Company’s available-for-sale securities and derivative financial instruments was determined using the following inputs (amounts in thousands):

		Carrying and		Fair Value Measurements Using Fair Value Hierarchy on a Recurring Basis
	As of	Fair Value		Level 1		Level 2
Financial assets:
Available-for-sale securities:
Equity securities	June 30, 2014	$	25	$	25	$	—
	December 31, 2013	282		282		—
Derivative financial instruments:
Interest rate swaps	June 30, 2014	112		—		112
	December 31, 2013	265		—		265
Financial liabilities:
Derivative financial instruments:
Interest rate swaps	June 30, 2014	2,206		—		2,206
	December 31, 2013	774		—		774

The Company does not own any financial instruments that are classified as Level 3.

Available-for-sale securities

At June 30, 2014, the Company’s available-for-sale securities included a $25,200 investment in other equity securities (included in other assets on the consolidated balance sheet). The aggregate cost of these securities was $5,300 and at June 30, 2014, the unrealized gain was $19,900. Such unrealized gains were included in accumulated other comprehensive loss on the consolidated balance sheet.  Fair values are approximated based on current market quotes from financial sources that track such securities.

In May 2014, the Company sold to Gould Investors L.P., a related party, 37,081 shares of BRT Realty Trust, a related party, for proceeds of $266,000 (based on the average of the closing prices for the 30 days preceding the sale).  The cost of these shares was $132,000 and the Company realized a gain on sale of $134,000, of which $132,000 was reclassified from accumulated other comprehensive loss on the consolidated balance sheet into earnings.

20

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 14 - Fair Value Measurements (continued)

Derivative financial instruments

Fair values are approximated using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with it use Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparty.  As of June 30, 2014, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.  As a result, the Company determined that its derivative valuation is classified in Level 2 of the fair value hierarchy.

As of June 30, 2014, the Company had 15 interest rate derivatives outstanding, all of which were interest rate swaps, related to 15 outstanding mortgage loans with an aggregate $77,623,000 notional amount and mature between 2014 and 2024 (weighted average maturity of 6.55 years).  Such interest rate swaps, all of which were designated as cash flow hedges, converted Libor based variable rate mortgages to fixed annual rate mortgages (with interest rates ranging from 3.55% to 6.50% and a weighted average interest rate of 4.97% at June 30, 2014).  The fair value of the Company’s derivatives designated as hedging instruments in asset and liability positions reflected as other assets or other liabilities on the consolidated balance sheets were $112,000 and $2,206,000, respectively, at June 30, 2014, and $265,000 and $774,000, respectively, at December 31, 2013.

Two of the Company’s unconsolidated joint ventures, in which a wholly owned subsidiary of the Company is a 50% partner, had an interest rate derivative outstanding at June 30, 2014 with a notional amount of $3,756,000. This interest rate derivative has an interest rate of 5.81% and matures in April 2018.

21

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 14 - Fair Value Measurements (continued)

The following table presents the effect of the Company’s derivative financial instruments on the consolidated statement of income for the periods presented (amounts in thousands):

	Three Months EndedJune 30,						Six Months EndedJune 30,
	2014			2013			2014			2013
One Liberty Properties and Consolidated Subsidiaries
Amount of (loss) gain recognized on derivatives in Other comprehensive loss	$	(1,227	)	$	574		$	(2,408	)	$	600
Amount of loss reclassification from Accumulated other comprehensive loss into Interest expense	(1,302		)	(156		)	(824		)	(308		)
Unconsolidated Joint Ventures (Company’s share)
Amount of (loss) gain recognized on derivative in Other comprehensive loss	$	(245	)	$	37		$	(48	)	$	33
Amount of (loss) gain reclassification from Accumulated other comprehensive loss into Equity in earnings of unconsolidated joint ventures	(34		)	(14		)	55			(28		)

No gain or loss was recognized with respect to hedge ineffectiveness or to amounts excluded from effectiveness testing on the Company’s cash flow hedges for the three and six months ended June 30, 2014 and 2013.  During the twelve months ending June 30, 2015, the Company estimates an additional $1,572,000 will be reclassified from other comprehensive income (loss) as an increase to interest expense.

The derivative agreements in effect at June 30, 2014 provide that if the wholly owned subsidiary of the Company which is a party to the agreement defaults or is capable of being declared in default on any of its indebtedness, then a default can be declared on such subsidiary’s derivative obligation. In addition, the Company is a party to one of the derivative agreements and if the subsidiary defaults on the loan subject to such agreement and if there are swap breakage losses on account of the derivative being terminated early, the Company could be held liable for interest rate swap breakage losses, if any.

As of June 30, 2014, the fair value of the derivatives in a liability position, including accrued interest, and excluding any adjustments for nonperformance risk, was approximately $2,379,000.  In the unlikely event that the Company breaches any of the contractual provisions of the derivative contracts, it would be required to settle its obligations thereunder at their termination liability value of $2,379,000.  Such amount is included in accrued expenses and other liabilities at June 30, 2014.

22

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

June 30, 2014 (Continued)

Note 15 - New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers, which provides guidance for revenue recognition. This update is effective for interim and annual reporting periods beginning after December 15, 2016.  The Company is currently in the process of evaluating the impact, if any, the adoption of this ASU will have on its consolidated financial statements.

In April 2014, the FASB issued updated guidance that changes the criteria for determining which future disposals can be presented as discontinued operations and modifies related disclosure requirements.  Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.  The guidance is effective prospectively as of the first quarter of 2015, with early adoption permitted for new disposals or new classifications as held-for-sale. The Company early adopted this new guidance in the first quarter of 2014 which had no effect on the Company’s Consolidated Financial Statements.  It is expected that most of the Company’s future dispositions will not meet the new criteria for being treated as a discontinued operation.

Note 16 - Subsequent Events

Subsequent events have been evaluated and there are no events relative to the Company’s consolidated financial statements that require additional disclosure.

23

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provision for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions.  Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “could,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions or variations thereof.  Forward-looking statements should not be relied on since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect actual results, performance or achievements.  Investors are encouraged to review the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2013 under the caption “Item 1A. Risk Factors” for a discussion of certain factors which may cause actual results to differ materially from current expectations and are cautioned not to place undue reliance on any forward-looking statements.

Overview

We are a self-administered and self-managed real estate investment trust, organized in Maryland in 1982.  We acquire, own and manage a geographically diversified portfolio of retail (including furniture stores, restaurants, office supply stores and supermarkets), industrial, flex, office, health and fitness and other properties, a substantial portion of which are leased under long-term net leases.  As of June 30, 2014, we own 113 properties (including five properties owned by our unconsolidated joint ventures) located in 30 states. Based on square footage, our occupancy rate at June 30, 2014 is approximately 99.3%.

We face a variety of risks and challenges in our business. We, among other things, face the possibility we will not be able to acquire accretive properties on acceptable terms, lease our properties on terms favorable to us or at all, our tenants may not be able to pay their rental and other obligations and we may not be able to renew or relet, on acceptable terms, leases that are expiring.  In that regard, a tenant with a lease expiring in October 2014 that accounted for 1.1% of our 2013 rental income, has advised that it does not intend to renew its lease.  At June 30, 2014, the net book value and principal amount of mortgage debt on this property was $2.6 million and $1.5 million, respectively.  The mortgage matures in November 2014.  If we are unable to relet or satisfactorily dispose of this property within a reasonable period after lease expiration, we may elect to surrender the property to the mortgagee, and may incur an impairment charge.

We seek to manage the risk of our real property portfolio by diversifying among types of properties and industries, locations, tenants and scheduled lease expirations. 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, obtaining other tenant related financial information, regular contact with tenant’s representatives, tenant credit checks and regular management reviews of our tenants.

24

Further, we are sensitive to the risks facing the retail industry as a result of the growth of e-commerce.  We are addressing this exposure by seeking to acquire properties that we believe capitalize on e-commerce activities, such as e-commerce distribution and warehousing facilities.

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 have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute currently at least 90% of ordinary taxable income to our stockholders.  We intend to comply with these requirements and to maintain our REIT status.

Our 2014 contractual rental income is approximately $54.7 million and represents, after giving effect to any abatements, concessions or adjustments, the base rent payable to us in calendar year 2014 under leases in effect at June 30, 2014. The 2014 contractual rental income excludes approximately $1.4 million of straight-line rent, amortization of approximately $235,000 of intangibles and our share of the rental income payable to our unconsolidated joint ventures, which in 2014 will be approximately $1.5 million.

The following table sets forth scheduled lease expirations of leases for our properties (excluding unconsolidated joint ventures) as of June 30, 2014 for the calendar years indicated below:

Year of Lease Expiration (1)	Number  of Expiring Leases	Approximate Square Footage Subject to Expiring Leases	2014 Contractual Rental Income Under Expiring Leases		Percent of 2014 Contractual Rental Income Represented by Expiring Leases
2014	2	114,319	$	882,953	1.6	%
2015	11	616,796	4,308,485		7.9
2016	15	458,262	3,801,822		6.9
2017	11	107,008	2,110,640		3.9
2018	18	394,055	5,554,161		10.2
2019	7	147,503	1,726,227		3.2
2020	7	181,108	4,305,178		7.9
2021	6	119,260	1,121,779		2.0
2022	9	1,198,204	8,988,514		16.4
2023	7	655,592	5,178,902		9.5
2024 and thereafter	25	1,739,764	16,703,954		30.5
	118	5,731,871	$	54,682,615	100.0	%

(1)Lease expirations assume tenants do not exercise existing renewal options.

25

Results of Operations

The following table compares revenues and operating expenses of continuing operations for the periods indicated:

	Three Months Ended June 30,									Six Months Ended June 30,
(Dollars in thousands)	2014		2013		Increase (Decrease)			% Change		2014		2013		Increase (Decrease)			% Change
Revenues:
Rental income	$	14,396	$	11,981	$	2,415		20.2	%	$	28,798	$	23,843	$	4,955		20.8	%
Lease termination fee	1,269		—		1,269			n/a		1,269		—		1,269			n/a
Total revenues	15,665		11,981		3,684			30.7		30,067		23,843		6,224			26.1
Operating expenses:
Depreciation and amortization	3,723		2,681		1,042			38.9		7,300		5,315		1,985			37.3
General and administrative	2,134		1,944		190			9.8		4,344		3,904		440			11.3
Federal excise and state taxes	107		184		(77		)	(41.8	)	169		226		(57		)	(25.2	)
Real estate expenses	877		751		126			16.8		1,976		1,523		453			29.7
Leasehold rent	77		77		—			—		154		154		—			—
Real estate acquisition costs	88		126		(38		)	(30.2	)	128		277		(149		)	(53.8	)
Total operating expenses	7,006		5,763		1,243			21.6		14,071		11,399		2,672			23.4
Operating income	$	8,659	$	6,218	$	2,441		39.3		$	15,996	$	12,444	$	3,552		28.5

Revenues

Rental income.  The increase is primarily due to rental income of $2.4 million and $4.7 million earned during the three and six months ended June 30, 2014, respectively, from 17 properties acquired in 2013 and 2014 ($2.1 million and $4.3 million, respectively, from the eleven properties acquired in 2013), and to a lesser extent, increases of $82,000 and $300,000 in real estate tax and expense reimbursements from tenants and $94,000 and $189,000, respectively, from a lease of vacant space at a property. These increases were partially offset during the three and six months ended June 30, 2014 by (i) the $150,000 write-off against rental income of the entire balance of the unbilled rent receivable and the intangible lease asset related to a lease for which we received a $1.269 million lease termination fee, and (ii) decreases of $111,000 and $247,000, respectively, resulting from lease expirations in January 2014. In May 2014, one of these properties was leased to a new tenant.

Lease termination fee.  In connection with a lease buy-out of a retail tenant in June 2014, we received a lease termination fee of $1,269,000.  We re-leased this property simultaneously with the termination of the existing tenant’s lease.

Operating Expenses

Depreciation and amortization.  Approximately $947,000 and $1.8 million of the increase for the three and six months ended June 30, 2014, respectively, is due to depreciation and amortization expense on the properties we acquired in 2013 and 2014 ($839,000 and $1.7 million, respectively, from the eleven properties acquired in 2013).

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General and administrative expenses.  Contributing to the increase in the three and six months ended June 30, 2014 were increases of (i) $79,000 and $153,000, respectively, in non-cash compensation expense primarily related to the increase in the number of restricted stock awards granted in 2014 and the higher fair value of such awards at the time of grant; (ii) a $150,000 annual increase ($37,500 per quarter) in the amount payable pursuant to the compensation and services agreement, and (iii) increases of $74,000 and $212,000, respectively, in various general and administrative expenses.

Federal excise and state taxes.  During the three and six months ended June 30, 2013, we recorded a $126,000 accrual of Federal excise tax which is based on taxable income generated but not yet distributed. There was no comparable expense in the corresponding 2014 year periods. The decrease in federal excise tax is offset in the three and six months ended June 30, 2014 by an increase in state tax expense.

Real estate expenses.  The increases in the three and six months ended June 30, 2014 are due to several factors including (i) an annual increase of $250,000 ($62,500 per quarter) in the amount for property management services pursuant to the compensation and services agreement due to the increase in the number and nature of properties in our portfolio; (ii) expenses totaling $65,000 and $127,000 for two properties purchased in 2013 and 2014, all of which is rebilled to tenants; and (iii) $52,000 and $138,000 of expenses related to two properties vacated by its tenants at their lease expiration in January 2014. In addition, an increase of $167,000 (a significant portion of which is rebilled to tenants) in snow removal expense at several of our properties due to the harsh 2014 winter contributed to the increase in the six months ended June 30, 2014.

Real estate acquisition costs.  These costs, which include acquisition fees, legal and other transactional costs and expenses, decreased during the six months ended June 30, 2014 primarily due to the inclusion in the six months ended June 30, 2013, of fees paid to our joint venture partner in connection with an acquisition. These costs also decreased in the three and six months ended June 30, 2014 due to reduced costs associated with closing transactions.

Other Income and Expenses

The following table compares other income and expenses for the periods indicated:

	Three Months Ended June 30,						Increase			%		Six Months Ended June 30,						Increase			%
(Dollars in thousands)	2014			2013			(Decrease)			Change		2014			2013			(Decrease)			Change
Other income and expenses:
Equity in earnings of unconsolidated joint ventures	$	130		$	57		$	73		128.1	%	$	263		$	391		$	(128	)	(32.7	)%
Gain on disposition of real estate — unconsolidated joint venture	—			2,807			(2,807		)	(100.0	)	—			2,807			(2,807		)	(100.0	)
Gain on sale — unconsolidated joint venture interest	—			1,898			(1,898		)	(100.0	)	—			1,898			(1,898		)	(100.0	)
Gain on sale — investment in BRT Realty Trust	134			—			134			n/a		134			—			134			n/a
Other income	2			11			(9		)	(81.8	)	10			80			(70		)	(87.5	)
Interest:
Expense	(4,035		)	(3,158		)	877			27.8		(7,988		)	(6,261		)	1,727			27.6
Amortization of deferred financing costs	(228		)	(226		)	2			0.9		(466		)	(439		)	27			6.2

27

Equity in earnings of unconsolidated joint ventures.  The decrease in the six months ended June 30, 2014 is attributable substantially to the sale in May 2013 of a property owned by us and another entity as tenants-in-common (the “TIC Property”) and the sale in April 2013 of our interest in the Plano, Texas joint venture. The increase in the three months ended June 30, 2014 is due to the inclusion in the three months ended June 30, 2013 of a $148,000 mortgage prepayment penalty that resulted from the sale of the TIC Property.

Gain on disposition of real estate — unconsolidated joint venture.  In May 2013, we sold the TIC Property and recorded a gain of $2,807,000.

Gain on sale — unconsolidated joint venture interest.  In April 2013, we sold our 90% equity interest in the Plano, Texas unconsolidated joint venture to our partner and recorded a gain of $1,898,000.

Gain on sale — investment in BRT Realty Trust.  In May 2014, we sold to Gould Investors L.P., a related party, our 37,081 shares of BRT Realty Trust, a related party, for proceeds of $266,000.  The cost of these shares was $132,000 and we realized a gain on sale of $134,000.

Interest expense.  The following table details interest expense for the periods indicated:

	Three Months Ended June 30,				Increase		%		Six Months Ended June 30,				Increase		%
(Dollars in thousands)	2014		2013		(Decrease)		Change		2014		2013		(Decrease)		Change
Interest expense:
Credit line interest	$	258	$	51	$	207	405.9	%	$	515	$	103	$	412	400.0	%
Mortgage interest	3,777		3,107		670		21.6		7,473		6,158		1,315		21.4
Total	$	4,035	$	3,158	$	877	27.8		$	7,988	$	6,261	$	1,727	27.6

Credit line interest

The increases are due to the $18.4 million and $19.5 million increase in the weighted average balance outstanding under our line of credit in the three and six months ended June 30, 2014, respectively. The weighted average balance increased due to borrowings to acquire several properties in 2013 and 2014, partially offset by repayments on the facility (i) with proceeds from the financing of several properties in 2013 and 2014 and (ii) from the use of a portion of the proceeds from the sale of two properties in 2014.

Mortgage interest

The following table reflects the interest rate on our mortgage debt and principal amount of outstanding mortgage debt, in each case on a weighted average basis:

	Three Months Ended June 30,						Increase			%		Six Months Ended June 30,						Increase			%
(Dollars in thousands)	2014			2013			(Decrease)			Change		2014			2013			(Decrease)			Change
Interest rate on mortgage debt	5.31		%	5.56		%	(.25		)%	(4.5	)%	5.32		%	5.52		%	(.20		)%	(3.6	)%
Principal amount of mortgage debt	$	284,641		$	223,567		$	61,074		27.3	%	$	280,862		$	223,080		$	57,782		25.9	%

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The increase in mortgage interest expense for the three and six months ended June 30, 2014 is due to the increase in the weighted average amount of mortgage debt outstanding, partially offset by a decrease in the weighted average interest rate on outstanding mortgage debt. The increase in the weighted average balance outstanding is due to the incurrence of mortgage debt of $66.1 million in connection with properties acquired in 2013 and 2014 and the financing or refinancing of $7.4 million, net of refinanced amounts, in connection with properties acquired in prior years. The decrease in the weighted average interest rate is due to the financing (including financings effectuated in connection with acquisitions) or refinancing in 2013 and 2014 of $98.8 million of gross new mortgage debt with a weighted average interest rate of approximately 4.8%.

The following table compares discontinued operations for the periods indicated:

	Three Months Ended June 30,				Increase			%		Six Months Ended June 30,				Increase			%
(Dollars in thousands)	2014		2013		(Decrease)			Change		2014		2013		(Decrease)			Change
Discontinued operations	$	—	$	145	$	(145	)	(100.0	)%	$	13	$	281	$	(268	)	(95.4	)%

Discontinued operations.  Discontinued operations include the income from operations of two properties sold in February 2014.

Liquidity and Capital Resources

Our sources of liquidity and capital include cash flow from operations, cash and cash equivalents, borrowings under our revolving credit facility, refinancing existing mortgage loans, obtaining mortgage loans secured by our unencumbered properties, issuance of equity securities and property sales.  Our available liquidity at August 1, 2014 was approximately $47.4 million, including approximately $7.8 million of cash and cash equivalents (net of the credit facility’s required $7.5 million deposit maintenance balance) and $39.6 million available under our revolving credit facility.

Liquidity and Financing

We expect to meet substantially all of our operating cash requirements (including dividend and mortgage amortization payments) from cash flow from operations. To the extent that cash flow from operations is inadequate to cover all of our operating needs, we will be required to use our available cash and cash equivalents, or draw on our credit line (to the extent permitted) to satisfy operating requirements.

At June 30, 2014, excluding mortgage indebtedness of our unconsolidated joint ventures, we had 52 outstanding mortgages payable secured by 74 properties, in aggregate principal amount of approximately $284.4 million. These mortgages represent first liens on individual real estate investments with an aggregate carrying value of approximately $466.0 million, before accumulated depreciation of $61.0 million. After giving effect to interest rate swap agreements, the mortgage payments bear interest at fixed rates ranging from 3.13% to 7.81% (a 5.12% weighted average interest rate) and mature between 2014 and 2037 (a 9.2 year weighted average remaining term on the mortgages).

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The following table sets forth, as of June 30, 2014, information with respect to our mortgage debt (excluding mortgage debt of our unconsolidated joint ventures), that is payable from July 1, 2014 through December 31, 2016:

(Dollars in thousands)	2014		2015		2016		Total
Amortization payments	$	3,559	$	7,409	$	7,232	$	18,200
Principal due at maturity	12,479		4,955		25,678		43,112
Total	$	16,038	$	12,364	$	32,910	$	61,312

At June 30, 2014, the Company’s unconsolidated joint ventures had first mortgages on four properties with outstanding balances of approximately $17.5 million, bearing interest at rates ranging from 5.81% to 6.0% (a 5.86% weighted average interest rate) and mature between 2015 and 2018.

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 or extend the mortgage loans which mature in 2014 through 2016.  We intend to repay the amounts not refinanced or extended from our existing funds and sources of funds, including our available cash and our credit line (to the extent available).

We continuously seek to refinance existing mortgage loans on terms we deem acceptable, in order 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 substantially less than the principal balance outstanding on the mortgage loan, we may determine in certain circumstances to convey 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 under the credit facility, thus providing us with the ability to re-borrow under the credit facility for the acquisition of additional properties. As a result, in order to grow our business, it is important to have a credit facility in place.  Additionally in connection with the acquisition of a number of larger properties during 2013, we arranged for contemporaneous mortgage financing covering a major portion of the applicable purchase price.

Credit Facility

We can borrow up to $75 million pursuant to our revolving credit facility which is available to us for the acquisition of commercial real estate, repayment of mortgage debt, property improvements and general working capital purposes; provided, that if used for property improvements and working capital purposes, the amount outstanding for such purposes will not exceed the lesser of $15 million and 15% of the borrowing base, as defined in the credit agreement, and if used for working capital purposes, will not exceed $10 million.  The facility matures on March 31, 2015 and bears interest at the greater of (i) 90 day LIBOR plus 3% and (ii) 4.75% per annum. There is an unused facility fee of 0.25% per annum on the difference between the outstanding loan balance and $75 million. The credit facility requires maintenance of $7.5 million in average deposit balances.

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The terms of our revolving credit facility include certain restrictions and covenants which may limit, among other things, the incurrence of liens, and which require compliance with financial ratios relating to, among other things, the minimum amount of tangible net worth, the minimum amount of debt service coverage, the minimum amount of fixed charge coverage, the maximum amount of debt to value, the minimum level of net income, certain investment limitations and the minimum value of unencumbered properties and the number of such properties. Net proceeds received from the sale, financing or refinancing of properties are generally required to be used to repay amounts outstanding under our credit facility. At June 30, 2014, we were in compliance in all material respects with the covenants under this facility.

Off-Balance Sheet Arrangements

We are not a party to any material off-balance sheet arrangements.  See Note 4 of the Notes to the Consolidated Financial Statements regarding an off-balance sheet arrangement on our property located in Sandy Springs, Georgia.

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 (computed in accordance with generally accepting accounting principles), excluding gains (or losses) from sales of property, plus depreciation and amortization, plus impairment write-downs of depreciable real estate and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. Since the NAREIT White Paper only provides guidelines for computing FFO, the computation of FFO may vary from one REIT to another. We compute adjusted funds from operations, or AFFO, by deducting from FFO our straight-line rent accruals, amortization of lease intangibles, and lease termination fee income and adding back the amortization of restricted stock compensation and the amortization of costs in connection with our financing activities (including our share of our unconsolidated joint ventures).

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 assures that the value of real estate assets diminish predictability over time. In fact, real estate values have historically risen and fallen with market conditions. As a result, we believe that FFO and AFFO provide a performance measure that when compared year over year, should reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, interest costs and other matters without the inclusion of depreciation and amortization, providing a perspective that may not be necessarily apparent from net income. We also consider FFO and AFFO to be useful to us in evaluating potential property acquisitions.

FFO and AFFO do not represent net income or cash flows from operations as defined by GAAP.  FFO and AFFO 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.

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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. FFO and AFFO do not represent cash flows from operating, investing or financing activities as defined by GAAP.

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. Management also prepares and reviews the reconciliation of net income to FFO and AFFO.

The table below provides a reconciliation of net income in accordance with GAAP to FFO and AFFO for the periods indicated (dollars in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Net income	$	4,640		$	7,736		$	7,913		$	11,186
Add: depreciation of properties	3,658			2,683			7,173			5,321
Add: our share of depreciation in unconsolidated joint ventures	94			114			187			330
Add: amortization of deferred leasing costs	35			34			70			65
Add: our share of amortization of deferred leasing costs in unconsolidated joint ventures	—			—			—			8
Add: federal excise tax relating to gain on sales	—			126			(19		)	126
Deduct: (gain) on sale of properties-joint ventures	—			(4,705		)	—			(4,705		)
Funds from operations	8,427			5,988			15,324			12,331
Deduct: straight-line rent accruals and amortization of lease intangibles	(261		)	(236		)	(648		)	(479		)
Deduct: lease termination fee income	(1,269		)	—			(1,269		)	—
Add: our share of straight-line rent reversals and amortization of lease intangibles of unconsolidated joint ventures	—			32			(1		)	91
Add: amortization of restricted stock compensation	448			369			920			766
Add: amortization of deferred financing costs	225			226			463			439
Add: our share of amortization of deferred financing costs in unconsolidated joint ventures	4			7			9			16
Adjusted funds from operations	$	7,574		$	6,386		$	14,798		$	13,164

32

The table below provides a reconciliation of net income per common share (on a diluted basis) in accordance with GAAP to FFO and AFFO:

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Net income	$	.29		$	.50		$	.49		$	.73
Add: depreciation of properties	.22			.18			.45			.35
Add: our share of depreciation in unconsolidated joint ventures	.01			.01			.01			.02
Add: amortization of deferred leasing costs	—			—			.01			—
Add: our share of amortization of deferred leasing costs in unconsolidated joint ventures	—			—			—			—
Add: federal excise tax relating to gain on sales	—			.01			—			.01
Deduct: (gain) on sale of properties-joint ventures	—			(.31		)	—			(.31		)
Funds from operations	.52			.39			.96			.80
Deduct: straight-line rent accruals and amortization of lease intangibles	(.02		)	(.01		)	(.04		)	(.03		)
Deduct: lease termination fee income	(.08		)	—			(.08		)	—
Add: our share of straight-line rent reversals and amortization of lease intangibles of unconsolidated joint ventures	—			—			(.01		)	.01
Add: amortization of restricted stock compensation	.03			.02			.06			.05
Add: amortization of deferred financing costs	.02			.01			.03			.03
Add: our share of amortization of deferred financing costs in unconsolidated joint ventures	—			—			—			—
Adjusted funds from operations	$	.47		$	.41		$	.92		$	.86

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Our primary market risk exposure is the effect of changes in interest rates on the interest cost of draws on our revolving variable rate credit facility and the effect of changes in the fair value of our interest rate swap agreements. Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control.

We use interest rate swaps to limit interest rate risk. These swaps are used for hedging purposes - not for speculation. We do not enter into interest rate swaps for trading purposes.

At June 30, 2014, we had 16 interest rate swap agreements outstanding (including one held by two of our unconsolidated joint ventures). 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 June 30, 2014, if there had been an increase of 100 basis points in forward interest rates, the fair market value of the interest rate swaps and net unrealized gain on derivative instruments would have increased by approximately $4.2 million.  If there were a decrease of 100 basis points in forward interest rates, the fair market value of the interest rate swaps and net unrealized gain on derivative instruments would have decreased by approximately $4.2 million. These changes would not have any impact on our net income or cash.

33

Our mortgage debt, after giving effect to 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 credit facility is a revolving variable rate facility which is sensitive to interest rates. Under current market conditions, we do not believe that our risk of material potential losses in future earnings, fair values and/or cash flows from near-term changes in market rates that we consider reasonably possible is material.  We assessed the market risk for our revolving credit facility and believe that there is no foreseeable market risk because interest is charged at the greater of (i) 90 day LIBOR plus 3% and (ii) 4.75% per annum. At June 30, 2014, 90 day LIBOR plus 3% was approximately 3.23%; therefore, an increase or decrease of 100 basis points on this interest rate would not have any impact on the interest expense related to this facility.

Item 4.  Controls and Procedures

Based on their evaluation as of the end of the period covered by this report, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are effective.

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) promulgated under the Exchange Act) during the six months ended June 30, 2014 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 6.  Exhibits

Exhibit No.	Title of Exhibit
31.1	Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Senior Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Senior Vice President and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Definition Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

34

ONE LIBERTY PROPERTIES, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ONE LIBERTY PROPERTIES, INC.
	(Registrant)
Date: August 7, 2014	/s/ Patrick J. Callan, Jr.
	Patrick J. Callan, Jr.
	President and Chief Executive Officer
	(principal executive officer)
Date: August 7, 2014	/s/ David W. Kalish
	David W. Kalish
	Senior Vice President and
	Chief Financial Officer
	(principal financial officer)

35

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Patrick J. Callan, Jr., certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014 of One Liberty Properties, Inc.

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d– 15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:   August 7, 2014
	/s/ Patrick J. Callan, Jr.
	Patrick J. Callan, Jr.
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, David W. Kalish, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014 of One Liberty Properties, Inc.

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  August 7, 2014
	/s/ David W. Kalish
	David W. Kalish
	Senior Vice President and
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. 1350

(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

I, Patrick J. Callan, Jr., do hereby certify, pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based upon a review of the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014 of One Liberty Properties, Inc. (“the Registrant”), as filed with the Securities and Exchange Commission on the date hereof (the “Report”):

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:  August 7, 2014	/s/ Patrick J. Callan, Jr.
	Patrick J. Callan, Jr.
	President and
	Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. 1350

(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

I, David W. Kalish, do hereby certify, pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based upon a review of the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014 of One Liberty Properties, Inc. (“the Registrant”), as filed with the Securities and Exchange Commission on the date hereof (the “Report”):

(1)   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:  August 7, 2014	/s/ David W. Kalish
	David W. Kalish
	Senior Vice President and
	Chief Financial Officer

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Discontinued Operations and Sale of Properties (Details) (USD $)	3 Months Ended	6 Months Ended		0 Months Ended	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Feb. 03, 2014 Real estate property located in Michigan property	Dec. 31, 2013 Real estate property located in Michigan
Discontinued Operations and Sale of Properties
Number of properties sold				2
Total sales price, net of closing costs		$ 5,177,000		$ 5,177,000
Impairment charge					61,700
Discontinued Operations
Rental income	246,000	141,000	486,000
Depreciation and amortization	36,000		72,000
Real estate expenses		17,000	1,000
Interest expense	65,000	111,000	132,000
Total expenses	101,000	128,000	205,000
Income from discontinued operations	$ 145,000	$ 13,000	$ 281,000

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Fair Value Measurements (Details 4) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Derivative financial instruments related to unconsolidated joint venture
Number of derivative agreements for which the Parent Company could be liable in event of default by a subsidiary			1
Cash flow hedges
Reclassification of gain (loss)
Gain or loss recognized with respect to cash flow hedges' ineffectiveness	$ 0	$ 0	$ 0	$ 0
Interest rate derivatives | Cash flow hedges
Fair Value Measurements
Amount of (loss) gain recognized on derivatives in Other comprehensive loss	(1,227,000)	574,000	(2,408,000)	600,000
Amount of (loss) gain reclassification from Accumulated other comprehensive loss into Equity in earning	(1,302,000)	(156,000)	(824,000)	(308,000)
Reclassification of gain (loss)
Additional amount to be reclassified to interest expense during the next twelve months			1,572,000
Credit risk related contingent feature
Fair value of derivative in a liability position, including accrued interest and excluding adjustments for nonperformance risk	2,379,000		2,379,000
Termination value of derivative agreement	2,379,000		2,379,000
Interest rate derivatives | Cash flow hedges | Unconsolidated joint ventures
Fair Value Measurements
Number of unconsolidated joint ventures of the entity with interest rate derivatives outstanding			2
Percentage of ownership in unconsolidated joint venture	50.00%		50.00%
Notional Amount	3,756,000		3,756,000
Fixed Interest Rate (as a percent)	5.81%		5.81%
Amount of (loss) gain recognized on derivatives in Other comprehensive loss	(245,000)	37,000	(48,000)	33,000
Amount of (loss) gain reclassification from Accumulated other comprehensive loss into Equity in earning	$ (34,000)	$ (14,000)	$ 55,000	$ (28,000)

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Fair Value Measurements (Details 2) (Interest rate derivatives, Cash flow hedge, USD $)	6 Months Ended
	Jun. 30, 2014 item
Interest rate derivatives | Cash flow hedge
Fair Value Measurements
Number of interest rate derivatives held	15
Number of mortgage loans outstanding	15
Notional Amount	$ 77,623,000
Weighted average maturity	6 years 6 months 18 days
Fixed annual interest rate lower end of range (as a percent)	3.55%
Fixed annual interest rate higher end of range (as a percent)	6.50%
Weighted average annual interest rate (as a percent)	4.97%

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Basis of Preparation (Details) (USD $)	1 Months Ended	6 Months Ended	12 Months Ended		1 Months Ended	6 Months Ended				6 Months Ended
	Feb. 28, 2014 item	Jun. 30, 2014 item	Dec. 31, 2013 item	Jun. 30, 2014 Noxell Corporation industrial building, Joppa, Maryland	Jun. 30, 2014 Land - River Crossing Apartments, Sandy Springs, Georgia	Jun. 30, 2014 Land - River Crossing Apartments, Sandy Springs, Georgia item	Jun. 30, 2014 Consolidated JV item	Jun. 30, 2014 Consolidated JV Minimum	Jun. 30, 2014 Consolidated JV Maximum	Jun. 30, 2014 Unconsolidated JV item
Investment in Joint Ventures
Number of joint ventures with controlling interest							6
Contract Purchase Price		$ 32,864,000			$ 6,510,000	$ 6,510,000
Number of apartment units in the complex purchased						196
Maximum exposure to loss					6,540,000	6,540,000
Carrying value of the land		601,883,000	567,358,000		6,516,000	6,516,000
Rent receivable		14,352,000	13,743,000		24,000	24,000
Restricted assets				0
Land		169,242,000	153,529,000	3,803,000
Buildings and improvements		432,641,000	413,829,000	8,142,000
Accrued expenses and other liabilities		10,631,000	7,790,000	78,000
Non-controlling interest in joint ventures		$ 1,333,000	$ 1,158,000	$ 5,000
Ownership interest in consolidated joint venture (as a percent)				95.00%				85.00%	95.00%
Number of unconsolidated joint ventures		5	5							5
Reclassification
Number of properties sold and reclassified to discontinued operations	2

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Subsequent Events

6 Months Ended

Jun. 30, 2014

Subsequent Events

Subsequent Events

Note 16 - Subsequent Events

Subsequent events have been evaluated and there are no events relative to the Company’s consolidated financial statements that require additional disclosure.

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Common Stock Cash Dividend (Details) (USD $)	0 Months Ended	6 Months Ended	12 Months Ended
	Jun. 11, 2014	Jun. 30, 2014	Dec. 31, 2013
Common Stock Cash Dividend
Quarterly cash dividend declared (in dollars per share)	$ 0.37
Quarterly cash dividend declared	$ 5,948,000	$ 11,820,000	$ 21,999,000

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Investment in Unconsolidated Joint Ventures (Details) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended	1 Months Ended
	Jun. 30, 2014 property	Jun. 30, 2013	Jun. 30, 2014 item property	Jun. 30, 2013	Dec. 31, 2013 item property	Apr. 30, 2013 Unconsolidated JV in Plano, Texas
Investment in Unconsolidated Joint Ventures
Number of unconsolidated joint ventures			5		5
Number of properties owned and operated by each unconsolidated joint venture	1		1		1
Investment in unconsolidated joint ventures	$ 4,833,000		$ 4,833,000		$ 4,906,000
Gain on the sale of a tenant-in-common property		2,807,000		2,807,000
Equity in earnings of unconsolidated joint ventures	130,000	57,000	263,000	391,000
Investment in Unconsolidated Joint Ventures
Ownership percentage in variable interest entity						90.00%
Gain on sale of equity interest in the joint venture						$ 1,898,000

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Fair Value Measurements (Details 3) (Derivatives designated as hedging instruments, Interest rate swap, USD $)	Jun. 30, 2014	Dec. 31, 2013
Derivatives designated as hedging instruments | Interest rate swap
Fair Value Measurements
Fair value of derivatives assets	$ 112,000	$ 265,000
Fair value of derivatives liabilities	$ 2,206,000	$ 774,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:
Net income	$ 7,962	$ 11,201
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on disposition of real estate held by unconsolidated joint venture		(2,807)
Gain on sale - unconsolidated joint venture interest		(1,898)
Gain on sale of available-for-sale securities (to related party in 2014)	(134)	(6)
Increase in rental income from straight-lining of rent	(609)	(414)
Increase in rental income from amortization of intangibles relating to leases	(50)	(66)
Amortization of restricted stock expense	920	766
Equity in earnings of unconsolidated joint ventures	(263)	(391)
Distributions of earnings from unconsolidated joint ventures	289	860
Depreciation and amortization	7,300	5,386
Amortization and write-off of financing costs	466	439
Changes in assets and liabilities:
Decrease (increase) in escrow, deposits, other assets and receivables	1,242	(109)
(Decrease) increase in accrued expenses and other liabilities	(539)	112
Net cash provided by operating activities	16,584	13,073
Cash flows from investing activities:
Purchase of real estate	(33,165)	(6,215)
Improvements to real estate	(645)	(627)
Distributions of return of capital from unconsolidated joint ventures	50	5,284
Net proceeds from sale of real estate	5,177
Net proceeds from disposition of unconsolidated joint venture interest		13,444
Payment of leasing commissions	(40)	(40)
Net proceeds from sale of available-for-sale securities (to related party in 2014)	266	19
Net cash (used in) provided by investing activities	(28,357)	11,865
Cash flows from financing activities:
Scheduled amortization payments of mortgages payable	(3,765)	(3,169)
Repayment of mortgages payable	(19,003)	(2,816)
Proceeds from mortgage financings	29,096	7,867
Proceeds from sale of common stock, net	3,304	7,771
Proceeds from bank line of credit	27,500	3,500
Repayment on bank line of credit	(13,900)	(3,500)
Issuance of shares through dividend reinvestment plan	2,299	2,278
Payment of financing costs	(523)	(174)
Capital contributions from non-controlling interests	306	481
Distribution to non-controlling interests	(156)	(258)
Cash distributions to common stockholders	(11,678)	(10,564)
Net cash provided by financing activities	13,480	1,416
Net increase in cash and cash equivalents	1,707	26,354
Cash and cash equivalents at beginning of period	16,631	14,577
Cash and cash equivalents at end of period	18,338	40,931
Supplemental disclosures of cash flow information:
Cash paid during the period for interest expense	8,036	6,338
Supplemental schedule of non-cash investing and financing activities:
Purchase accounting allocation - intangible lease assets	1,989	762
Purchase accounting allocation - intangible lease liabilities	2,671	857
Restricted cash for tenant improvements and other reserve	$ 1,894

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Shares Issued through Equity Offering Program (Details) (USD $)	0 Months Ended	6 Months Ended
	Mar. 20, 2014	Jun. 30, 2014
Shares Issued through Equity Offering Program
Maximum aggregate sales price of shares to be sold under an Equity Offering Sales Agreement (in dollars)	$ 38,360,000
Shares issued through equity offering program
Number of shares sold		156,172
Proceeds from sale of shares, net of commission and before offering costs		3,402,000
Payment of commissions on sale of shares		34,000
Payment of offering costs, primarily professional fees, on sale of shares		$ 98,000

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Discontinued Operations and Sale of Properties (Tables)

6 Months Ended

Jun. 30, 2014

Discontinued Operations and Sale of Properties

Summary of income from discontinued operations

The following table summarizes the components of income from discontinued operations applicable to these properties (amounts in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Rental income	$	—	$	246	$	141	$	486
Depreciation and amortization	—		36		—		72
Real estate expenses	—		—		17		1
Interest expense	—		65		111		132
Total expenses	—		101		128		205
Income from discontinued operations	$	—	$	145	$	13	$	281

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Real Estate Acquisitions and Contingent Liability (Tables)

6 Months Ended

Jun. 30, 2014

Real Estate Acquisitions and Contingent Liability

Schedule of the Company's real estate acquisitions, all of which were acquired for cash

The following chart details the Company’s real estate acquisitions, all of which were acquired for cash, during the six months ended June 30, 2014 (amounts in thousands):

Description of Property	Date Acquired	Contract Purchase Price		Third Party Real Estate Acquisition Costs (a)
Total Wine and More retail store, Greensboro, North Carolina	January 21, 2014	$	2,971	$	20
Chuck E Cheese restaurant, Indianapolis, Indiana	January 23, 2014	2,138		9
Savers Thrift Superstore, Highlands Ranch, Colorado	May 7, 2014	4,825		45
Hobby Lobby retail store, Woodbury, Minnesota	May 21, 2014	4,770		13
Land - River Crossing Apartments, Sandy Springs, Georgia (b)	June 4, 2014	6,510		—		(c)
Noxell Corporation industrial building, Joppa, Maryland (d)	June 26, 2014	11,650		—		(c)
Other (e)		—		41
Totals		$	32,864	$	128

(a) Included as an expense in the accompanying consolidated statement of income.

(b) The Company’s fee interest in the land is collateral for the tenant’s mortgage loan secured by the buildings located at this property.

(c) Transaction costs aggregating $301 incurred with these asset acquisitions were capitalized.

(d) Owned by a joint venture in which the Company has a 95% interest.  The non-controlling interest contributed $306 for its 5% interest, which was equal to the fair value at the date of purchase.

(e) Costs incurred for potential acquisitions and properties purchased in 2013.

Schedule of allocation of purchase price for the company's real estate acquisitions

The following chart provides the allocation of the purchase price for the Company’s real estate acquisitions during the six months ended June 30, 2014 (amounts in thousands):

					Building		Intangible Lease
Description of Property	Land		Building		Improvements		Asset			Liability			Total
Total Wine and More retail store, Greensboro, North Carolina	$	1,046	$	1,468	$	83	$	374		$	—		$	2,971
Chuck E Cheese restaurant, Indianapolis, Indiana	853		1,321		145		94			(275		)	2,138
Savers Thrift Superstore, Highlands Ranch, Colorado	2,231		2,614		277		846			(1,143		)	4,825
Hobby Lobby retail store, Woodbury, Minnesota	1,190		3,667		335		734			(1,156		)	4,770
Land - River Crossing Apartments, Sandy Springs, Georgia (a)	6,516		—		—		—			—			6,516
Noxell Corporation industrial building, Joppa, Maryland (b)	3,803		7,991		151		—			—			11,945
Subtotals	15,639		17,061		991		2,048			(2,574		)	33,165
Other (c)	74		70		18		(59		)	(97		)	6
Totals	$	15,713	$	17,131	$	1,009	$	1,989		$	(2,671	)	$	33,171

(a) Includes capitalized transaction costs of $6 incurred with this asset acquisition.

(b) Includes capitalized transaction costs of $295 incurred with this asset acquisition.

(c) Adjustments to finalize intangibles relating to properties purchased in 2013.

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Stock Based Compensation (Details) (USD $)	3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended						0 Months Ended	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jun. 30, 2014 Restricted stock grants	Jun. 30, 2013 Restricted stock grants	Jun. 30, 2014 Restricted stock grants	Jun. 30, 2013 Restricted stock grants	Jun. 30, 2014 Restricted stock units	Jun. 30, 2013 Restricted stock units	Jun. 30, 2014 Restricted stock units	Jun. 30, 2013 Restricted stock units	Jun. 30, 2014 2012 Incentive Plan	Jun. 30, 2014 2012 Incentive Plan Restricted stock grants	Jun. 30, 2014 Prior Incentive Plans	Jun. 30, 2014 Pay-for-performance program	Sep. 14, 2010 Pay-for-performance program Restricted stock units	Jun. 30, 2014 Pay-for-performance program Restricted stock units
Stock Based Compensation
Number of shares authorized for issuance														600,000
Vesting period								5 years
Number of shares to be vested and issued for each unit outstanding on satisfying performance criteria at June 30, 2017																			1
Number of shares to be issued for each unit outstanding on not satisfying performance criteria at June 30, 2017																			0
Outstanding options at the end of the period (in shares)	0	0	0	0	0
Summary of the activity of the incentive plans
Restricted share grants								118,850	112,650									200,000
Per share grant price (in dollars per share)								$ 20.54	$ 21.59
Deferred compensation to be recognized over vesting period								$ 2,441,000	$ 2,432,000
Non-vested shares:
Non-vested beginning of period (in shares)						481,045	470,015	470,015	407,460						229,000	452,000
Grants (in shares)								118,850	112,650									200,000
Vested during period (in shares)								(101,300)	(50,095)										0
Forfeitures (in shares)								(6,520)											0
Non-vested end of period (in shares)						481,045	470,015	481,045	470,015						229,000	452,000
Other disclosures
Average per share value of non-vested shares (based on grant price) (in dollars per share)						$ 14.55	$ 14.22	$ 14.55	$ 14.22
Value of shares vested during the period (based on grant price)								621,000	876,000
The total charge to operations for all incentive plans, including the 200,000 Units, is as follows:
Share based compensation charged to operations	448,000	369,000	920,000	766,000		419,000	335,000	862,000	702,000	29,000	34,000	58,000	64,000
Compensation costs related to non-vested awards that have not yet been recognized	$ 5,741,000		$ 5,741,000														$ 344,000
Approximate weighted average vesting period			2 years 10 months 24 days

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Stock Based Compensation (Tables)

6 Months Ended

Jun. 30, 2014

Stock Based Compensation

Summary of the activity of the equity incentive plans excluding the 200,000 units

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014			2013
Restricted share grants	—		—		118,850			112,650
Per share grant price	—		—		$	20.54		$	21.59
Deferred compensation to be recognized over vesting period	—		—		$	2,441,000		$	2,432,000
Non-vested shares:
Non-vested beginning of period	481,045		470,015		470,015			407,460
Grants	—		—		118,850			112,650
Vested during period	—		—		(101,300		)	(50,095		)
Forfeitures	—		—		(6,520		)	—
Non-vested end of period	481,045		470,015		481,045			470,015
Average per share value of non-vested shares (based on grant price)	$	14.55	$	14.22	$	14.55		$	14.22
Value of shares vested during the period (based on grant price)	$	—	$	—	$	621,000		$	876,000

Schedule of the total charge to operations for all incentive plans, including the 200,000 units

Outstanding restricted stock grants	$	419,000	$	335,000	$	862,000	$	702,000
Outstanding restricted stock units	29,000		34,000		58,000		64,000
Total charge to operations	$	448,000	$	369,000	$	920,000	$	766,000

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Measurements

Schedule of available-for-sale securities and derivative financial instruments measured at fair value

The fair value of the Company’s available-for-sale securities and derivative financial instruments was determined using the following inputs (amounts in thousands):

		Carrying and		Fair Value Measurements Using Fair Value Hierarchy on a Recurring Basis
	As of	Fair Value		Level 1		Level 2
Financial assets:
Available-for-sale securities:
Equity securities	June 30, 2014	$	25	$	25	$	—
	December 31, 2013	282		282		—
Derivative financial instruments:
Interest rate swaps	June 30, 2014	112		—		112
	December 31, 2013	265		—		265
Financial liabilities:
Derivative financial instruments:
Interest rate swaps	June 30, 2014	2,206		—		2,206
	December 31, 2013	774		—		774

Schedule of effect of derivative financial instruments on consolidated statement of income

The following table presents the effect of the Company’s derivative financial instruments on the consolidated statement of income for the periods presented (amounts in thousands):

	Three Months EndedJune 30,						Six Months EndedJune 30,
	2014			2013			2014			2013
One Liberty Properties and Consolidated Subsidiaries
Amount of (loss) gain recognized on derivatives in Other comprehensive loss	$	(1,227	)	$	574		$	(2,408	)	$	600
Amount of loss reclassification from Accumulated other comprehensive loss into Interest expense	(1,302		)	(156		)	(824		)	(308		)
Unconsolidated Joint Ventures (Company’s share)
Amount of (loss) gain recognized on derivative in Other comprehensive loss	$	(245	)	$	37		$	(48	)	$	33
Amount of (loss) gain reclassification from Accumulated other comprehensive loss into Equity in earnings of unconsolidated joint ventures	(34		)	(14		)	55			(28		)

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Distributions - common stock, Cash per share (in dollars per share)	$ 0.37	$ 0.35	$ 0.74	$ 0.70	$ 1.42

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Organization and Background (Details)	Jun. 30, 2014 item property
Organization and Background
Number of real estate properties	113
Number of states in which properties are located	30
Properties owned by consolidated joint ventures
Organization and Background
Number of real estate properties	6
Properties owned by unconsolidated joint ventures
Organization and Background
Number of real estate properties	5

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Line of Credit (Details) (Facility, USD $)	6 Months Ended
	Jun. 30, 2014	Aug. 01, 2014	Dec. 31, 2013
Line of Credit
Borrowing capacity	$ 75,000,000
Maximum effective interest rate (as a percent)	4.75%
Unused facility fee (as a percent)	0.25%
Amount outstanding under the facility	$ 36,850,000	$ 35,450,000	$ 23,250,000
LIBOR
Line of Credit
Basis of interest rate	90 day LIBOR
Spread on variable interest rate (as a percent)	3.00%
Interest rate at end of period (as a percent)	3.23%

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CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2014	Dec. 31, 2013
Real estate investments, at cost
Land	$ 169,242,000	$ 153,529,000
Buildings and improvements	432,641,000	413,829,000
Total real estate investments, at cost	601,883,000	567,358,000
Less accumulated depreciation	77,213,000	71,171,000
Real estate investments, net	524,670,000	496,187,000
Properties held-for-sale		5,177,000
Investment in unconsolidated joint ventures	4,833,000	4,906,000
Cash and cash equivalents	18,338,000	16,631,000
Restricted cash	1,894,000
Unbilled rent receivable	14,352,000	13,743,000
Unamortized intangible lease assets, net	26,517,000	26,035,000
Escrow, deposits and other assets and receivables	4,268,000	5,690,000
Investment in BRT Realty Trust at market (related party)		262,000
Unamortized deferred financing costs, net	3,343,000	3,267,000
Total assets	598,215,000	571,898,000
Liabilities:
Mortgages payable	284,373,000	278,045,000
Line of credit	36,850,000	23,250,000
Dividends payable	5,948,000	5,806,000
Accrued expenses and other liabilities	10,631,000	7,790,000
Unamortized intangible lease liabilities, net	9,214,000	6,917,000
Total liabilities	347,016,000	321,808,000
Commitments and contingencies
One Liberty Properties, Inc. stockholders' equity:
Preferred stock, $1 par value; 12,500 shares authorized; none issued
Common stock, $1 par value; 25,000 shares authorized; 15,594 and 15,221 shares issued and outstanding	15,594,000	15,221,000
Paid-in capital	216,474,000	210,324,000
Accumulated other comprehensive loss	(2,172,000)	(490,000)
Accumulated undistributed net income	19,970,000	23,877,000
Total One Liberty Properties, Inc. stockholders' equity	249,866,000	248,932,000
Non-controlling interests in joint ventures	1,333,000	1,158,000
Total equity	251,199,000	250,090,000
Total liabilities and equity	$ 598,215,000	$ 571,898,000

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Fair Value Measurements (Details) (USD $)	3 Months Ended	6 Months Ended														1 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2014	Jun. 30, 2013	Aug. 01, 2014 Line of credit	Jun. 30, 2014 Line of credit	Dec. 31, 2013 Line of credit	Jun. 30, 2014 Recurring Carrying and fair Value	Dec. 31, 2013 Recurring Carrying and fair Value	Jun. 30, 2014 Recurring Carrying and fair Value Interest rate swap	Dec. 31, 2013 Recurring Carrying and fair Value Interest rate swap	Jun. 30, 2014 Recurring Level 1	Dec. 31, 2013 Recurring Level 1	Jun. 30, 2014 Recurring Level 2 Interest rate swap	Dec. 31, 2013 Recurring Level 2 Interest rate swap	Jun. 30, 2014 Other equity securities	May 31, 2014 BRT Realty Trust Gould Investors L.P	Jun. 30, 2014 Mortgages payable	Dec. 31, 2013 Mortgages payable
Fair Value of Financial Instruments
Estimated fair value of mortgages payable																	$ 289,447,000	$ 283,142,000
Excess of fair value over carrying value																	5,074,000	5,097,000
Blended or estimated market interest rate (as a percent)																	4.80%	5.00%
Weighted average remaining term of the mortgages																	9 years 2 months 12 days	9 years
Carrying amount				35,450,000	36,850,000	23,250,000
Available-for-sale securities:
Equity securities							25,000	282,000			25,000	282,000			25,200
Derivative financial instruments									112,000	265,000			112,000	265,000
Financial liabilities:
Derivative financial instruments									2,206,000	774,000			2,206,000	774,000
Available-for-sale securities
Aggregate cost of available-for-sale securities	5,300	5,300
Unrealized gain on available-for-sale securities	19,900	19,900
Number of shares sold to related party																37,081
Proceeds from shares sold to related party		266,000	19,000													266,000
Period based on which average of the closing prices considered for proceeds from related party																30 days
Cost of shares sold to related party																132,000
Gain on sale shares sold to related party	134,000	134,000	6,000													134,000
Gain reclassified from accumulated other comprehensive loss on the balance sheet into earnings																$ 132,000

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 4,662	$ 7,752	$ 7,962	$ 11,201
Other comprehensive (loss) gain
Net unrealized (loss) gain on available-for-sale securities	(130)	(1)	(125)	45
Net unrealized (loss) gain on derivative instruments	(867)	730	(1,585)	908
One Liberty Property's share of joint venture net unrealized gain on derivative instruments	7	51	4	61
Other comprehensive (loss) gain	(990)	780	(1,706)	1,014
Comprehensive income	3,672	8,532	6,256	12,215
Comprehensive income attributable to non-controlling interests	(22)	(16)	(49)	(15)
Unrealized loss on derivative instruments attributable to non-controlling interests	14		24
Comprehensive income attributable to One Liberty Properties, Inc.	$ 3,664	$ 8,516	$ 6,231	$ 12,200

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Real Estate Acquisitions and Contingent Liability (Details) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended		6 Months Ended				1 Months Ended	6 Months Ended		6 Months Ended
	Jun. 30, 2014 item	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jun. 30, 2014 Consolidated JV Minimum	Jun. 30, 2014 Total Wine and More retail store, Greensboro, North Carolina	Jun. 30, 2014 Chuck E Cheese restaurant, Indianapolis, Indiana	Jun. 30, 2014 Savers Thrift Superstore, Highlands Ranch, Colorado	Jun. 30, 2014 Hobby Lobby retail store, Woodbury, Minnesota	Jun. 30, 2014 Land - River Crossing Apartments, Sandy Springs, Georgia	Jun. 30, 2014 Land - River Crossing Apartments, Sandy Springs, Georgia item	Jun. 30, 2014 Land - River Crossing Apartments, Sandy Springs, Georgia and Noxell Corporation industrial building, Joppa, Maryland	Jun. 30, 2014 Noxell Corporation industrial building, Joppa, Maryland	Jun. 30, 2014 Noxell Corporation industrial building, Joppa, Maryland Consolidated JV	Jun. 30, 2014 Subtotals	Jun. 30, 2014 Other (e)	Jun. 30, 2014 Other (c)
Real Estate Acquisitions
Contract Purchase Price			$ 32,864,000				$ 2,971,000	$ 2,138,000	$ 4,825,000	$ 4,770,000	$ 6,510,000	$ 6,510,000		$ 11,650,000
Third Party Real Estate Acquisition Costs	88,000	126,000	128,000	277,000			20,000	9,000	45,000	13,000							41,000
Allocation of purchase price for the company's real estate acquisitions
Land	15,713,000		15,713,000				1,046,000	853,000	2,231,000	1,190,000	6,516,000	6,516,000		3,803,000		15,639,000		74,000
Building	17,131,000		17,131,000				1,468,000	1,321,000	2,614,000	3,667,000				7,991,000		17,061,000		70,000
Building Improvements	1,009,000		1,009,000				83,000	145,000	277,000	335,000				151,000		991,000		18,000
Intangible Lease Asset	1,989,000		1,989,000				374,000	94,000	846,000	734,000						2,048,000		(59,000)
Intangible Lease Liability	(2,671,000)		(2,671,000)					(275,000)	(1,143,000)	(1,156,000)						(2,574,000)		(97,000)
Total	33,171,000		33,171,000				2,971,000	2,138,000	4,825,000	4,770,000	6,516,000	6,516,000		11,945,000		33,165,000		6,000
Capitalized transaction costs incurred with the asset acquisition											6,000	6,000	301,000	295,000
Ownership interest in consolidated joint venture of the company (as a percent)						85.00%									95.00%
Contributions from non-controlling interests			306,000		480,000										306,000
Ownership interest in consolidated joint venture of non-controlling interest (as a percent)															5.00%
Number of apartment units in the complex purchased												196
Cash reserve	1,894,000		1,894,000
Amount of mortgage to owner/operator												$ 16,230,000
Weighted average amortization period for intangible lease assets																7 years 8 months 12 days
Weighted average amortization period for intangible lease liabilities																8 years 4 months 24 days
Number of properties acquired	4

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Stock Based Compensation

6 Months Ended

Jun. 30, 2014

Stock Based Compensation

Stock Based Compensation

Note 13 - Stock Based Compensation

The Company’s 2012 Incentive Plan, approved by the Company’s stockholders in June 2012, permits the Company to grant, among other things, stock options, restricted stock, restricted stock units and performance share awards and any one or more of the foregoing to its employees, officers, directors and consultants.  A maximum of 600,000 shares of the Company’s common stock is authorized for issuance pursuant to this Plan, of which 229,000 shares of restricted stock are outstanding as of June 30, 2014.  An aggregate of 452,000 shares of restricted stock and restricted stock units are outstanding under the Company’s 2003 and 2009 equity incentive plans (collectively, the “Prior Plans”) and have not yet vested.  No additional awards may be granted under the Prior Plans.

The restricted stock grants are charged to general and administrative expense over the respective vesting periods based on the market value of the common stock on the grant date. Substantially all the outstanding restricted stock awards provide for vesting upon the fifth anniversary of the date of grant and under certain circumstances may vest earlier.  For accounting purposes, the restricted stock is not included in the shares shown as outstanding on the balance sheet until they vest; however dividends are paid on the unvested shares.

On September 14, 2010, the Board of Directors approved a Pay-for-Performance program under the Company’s 2009 Incentive Plan and awarded 200,000 performance share awards in the form of restricted stock units (the “Units”). The holders of Units are not entitled to dividends or to vote the underlying shares until the Units vest and shares are issued. Accordingly, for accounting purposes, the shares underlying the Units are not included in the shares shown as outstanding on the balance sheet.  If the defined performance criteria are satisfied in full at June 30, 2017, one share of the Company’s common stock will vest and be issued for each Unit outstanding and a pro-rata portion of the Units will vest and be issued if the performance criteria fall between defined ranges.  In the event that the performance criteria are not satisfied in whole or in part at June 30, 2017, the unvested Units will be forfeited and no shares of the Company’s common stock will be issued for those Units.  No Units were forfeited or vested in the six months ended June 30, 2014.

As of June 30, 2014 and December 31, 2013, there were no options outstanding under the Company’s equity incentive plans.

The following is a summary of the activity of the equity incentive plans (excluding, except as otherwise noted, the 200,000 Units):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014			2013
Restricted share grants	—		—		118,850			112,650
Per share grant price	—		—		$	20.54		$	21.59
Deferred compensation to be recognized over vesting period	—		—		$	2,441,000		$	2,432,000
Non-vested shares:
Non-vested beginning of period	481,045		470,015		470,015			407,460
Grants	—		—		118,850			112,650
Vested during period	—		—		(101,300		)	(50,095		)
Forfeitures	—		—		(6,520		)	—
Non-vested end of period	481,045		470,015		481,045			470,015
Average per share value of non-vested shares (based on grant price)	$	14.55	$	14.22	$	14.55		$	14.22
Value of shares vested during the period (based on grant price)	$	—	$	—	$	621,000		$	876,000
The total charge to operations for all incentive plans, including the 200,000 Units, is as follows:
Outstanding restricted stock grants	$	419,000	$	335,000	$	862,000		$	702,000
Outstanding restricted stock units	29,000		34,000		58,000			64,000
Total charge to operations	$	448,000	$	369,000	$	920,000		$	766,000

As of June 30, 2014, there were approximately $5,741,000 of total compensation costs related to non-vested awards that have not yet been recognized, including $344,000 related to the Pay-for-Performance program (net of forfeiture and performance assumptions which are re-evaluated quarterly). These compensation costs will be charged to general and administrative expense over the remaining respective vesting periods. The weighted average vesting period is approximately 2.9 years.

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Lease Termination Fee Income (Details) (USD $)	1 Months Ended
	Jun. 30, 2014
Lease Termination Fee Income
Lease termination fee received from a retail tenant in a lease buy-out transaction	$ 1,269,000
Write-off of entire balance of the unbilled rent receivable and the intangible lease asset	$ 150,000

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New Accounting Pronouncements

6 Months Ended

Jun. 30, 2014

New Accounting Pronouncements

New Accounting Pronouncements

Note 15 - New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers, which provides guidance for revenue recognition. This update is effective for interim and annual reporting periods beginning after December 15, 2016.  The Company is currently in the process of evaluating the impact, if any, the adoption of this ASU will have on its consolidated financial statements.

In April 2014, the FASB issued updated guidance that changes the criteria for determining which future disposals can be presented as discontinued operations and modifies related disclosure requirements.  Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.  The guidance is effective prospectively as of the first quarter of 2015, with early adoption permitted for new disposals or new classifications as held-for-sale. The Company early adopted this new guidance in the first quarter of 2014 which had no effect on the Company’s Consolidated Financial Statements.  It is expected that most of the Company’s future dispositions will not meet the new criteria for being treated as a discontinued operation.

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $)	Total	Common Stock	Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Undistributed Net Income	Non-Controlling Interests in Joint Ventures
Balances at Dec. 31, 2012	$ 238,059,000	$ 14,598,000	$ 196,107,000	$ (1,578,000)	$ 28,001,000	$ 931,000
Distributions - common stock
Cash - $.74 and $1.42 per share for the six months ended June 30, 2014 and for the year ended December 31, 2013, respectively	(21,999,000)				(21,999,000)
Shares issued through equity offering program - net	9,165,000	363,000	8,802,000
Restricted stock vesting		50,000	(50,000)
Shares issued through dividend reinvestment plan	4,235,000	210,000	4,025,000
Contributions from non-controlling interests	480,000					480,000
Distributions to non-controlling interests	(298,000)					(298,000)
Compensation expense - restricted stock	1,440,000		1,440,000
Net income	17,924,000				17,875,000	49,000
Other comprehensive income (loss)	1,084,000			1,088,000		(4,000)
Balances at Dec. 31, 2013	250,090,000	15,221,000	210,324,000	(490,000)	23,877,000	1,158,000
Distributions - common stock
Cash - $.74 and $1.42 per share for the six months ended June 30, 2014 and for the year ended December 31, 2013, respectively	(11,820,000)				(11,820,000)
Shares issued through equity offering program - net	3,304,000	156,000	3,148,000
Restricted stock vesting		101,000	(101,000)
Shares issued through dividend reinvestment plan	2,299,000	116,000	2,183,000
Contributions from non-controlling interests	306,000					306,000
Distributions to non-controlling interests	(156,000)					(156,000)
Compensation expense - restricted stock	920,000		920,000
Net income	7,962,000				7,913,000	49,000
Other comprehensive income (loss)	(1,706,000)			(1,682,000)		(24,000)
Balances at Jun. 30, 2014	$ 251,199,000	$ 15,594,000	$ 216,474,000	$ (2,172,000)	$ 19,970,000	$ 1,333,000

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, shares authorized	12,500	12,500
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized	25,000	25,000
Common stock, shares issued	15,594	15,221
Common stock, shares outstanding	15,594	15,221

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Discontinued Operations and Sale of Properties

6 Months Ended

Jun. 30, 2014

Discontinued Operations and Sale of Properties

Discontinued Operations and Sale of Properties

Note 8 - Discontinued Operations and Sale of Properties

On February 3, 2014, the Company sold two properties located in Michigan for a total sales price of $5,177,000, net of closing costs.  At December 31, 2013, the Company recorded a $61,700 impairment charge representing the loss on the sale of these properties.  The following table summarizes the components of income from discontinued operations applicable to these properties (amounts in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Rental income	$	—	$	246	$	141	$	486
Depreciation and amortization	—		36		—		72
Real estate expenses	—		—		17		1
Interest expense	—		65		111		132
Total expenses	—		101		128		205
Income from discontinued operations	$	—	$	145	$	13	$	281

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Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 01, 2014
Document and Entity Information
Entity Registrant Name	ONE LIBERTY PROPERTIES INC
Entity Central Index Key	0000712770
Document Type	10-Q
Document Period End Date	Jun. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		16,127,360
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2

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Line of Credit

6 Months Ended

Jun. 30, 2014

Line of Credit

Line of Credit

Note 9 - Line of Credit

The Company has a $75,000,000 revolving credit facility with Manufacturer’s & Trader’s Trust Company, VNB New York Corp., Bank Leumi USA and Israel Discount Bank of New York.  This facility matures March 31, 2015 and provides that the Company pay interest at the greater of (i) 90 day LIBOR plus 3% (3.23% at June 30, 2014) and (ii) 4.75% per annum, and there is an unused facility fee of .25% per annum.  At June 30, 2014 and August 1, 2014, there were outstanding balances of $36,850,000 and $35,450,000, respectively, under the facility. The Company was in compliance with all covenants at June 30, 2014.

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues:
Rental income, net	$ 14,396	$ 11,981	$ 28,798	$ 23,843
Lease termination fee	1,269		1,269
Total revenues	15,665	11,981	30,067	23,843
Operating expenses:
Depreciation and amortization	3,723	2,681	7,300	5,315
General and administrative (including $610, $572, $1,219 and $1,144, respectively, to related party)	2,134	1,944	4,344	3,904
Federal excise and state taxes	107	184	169	226
Real estate expenses (including $212, $150, $425 and $300 respectively, to related party)	877	751	1,976	1,523
Leasehold rent	77	77	154	154
Real estate acquisition costs	88	126	128	277
Total operating expenses	7,006	5,763	14,071	11,399
Operating income	8,659	6,218	15,996	12,444
Other income and expenses:
Equity in earnings of unconsolidated joint ventures	130	57	263	391
Gain on disposition of real estate held by unconsolidated joint venture		2,807		2,807
Gain on sale - unconsolidated joint venture interest		1,898		1,898
Gain on sale - investment in BRT Realty Trust (related party)	134		134
Other income	2	11	10	80
Interest:
Expense	(4,035)	(3,158)	(7,988)	(6,261)
Amortization of deferred financing costs	(228)	(226)	(466)	(439)
Income from continuing operations	4,662	7,607	7,949	10,920
Income from discontinued operations		145	13	281
Net income	4,662	7,752	7,962	11,201
Less: net income attributable to non-controlling interests	(22)	(16)	(49)	(15)
Net income attributable to One Liberty Properties, Inc.	$ 4,640	$ 7,736	$ 7,913	$ 11,186
Weighted average number of common shares outstanding:
Basic (in shares)	15,518	14,844	15,436	14,759
Diluted (in shares)	15,618	14,944	15,536	14,859
Per common share attributable to common stockholders - basic:
Income from continuing operations (in dollars per share)	$ 0.29	$ 0.50	$ 0.49	$ 0.71
Income from discontinued operations (in dollars per share)		$ 0.01		$ 0.02
Total per common share attributable to common stockholders - basic (in dollars per share)	$ 0.29	$ 0.51	$ 0.49	$ 0.73
Per common share attributable to common stockholders - diluted:
Income from continuing operations (in dollars per share)	$ 0.29	$ 0.49	$ 0.49	$ 0.71
Income from discontinued operations (in dollars per share)		$ 0.01		$ 0.02
Total per common share attributable to common stockholders - diluted (in dollars per share)	$ 0.29	$ 0.50	$ 0.49	$ 0.73
Cash distributions declared per share of common stock (in dollars per share)	$ 0.37	$ 0.35	$ 0.74	$ 0.70

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Earnings Per Common Share

6 Months Ended

Jun. 30, 2014

Earnings Per Common Share

Earnings Per Common Share

Note 3 - Earnings Per Common Share

Basic earnings per share was determined by dividing net income allocable to common stockholders for the applicable period by the weighted average number of shares of common stock outstanding during such period. Net income is also allocated to the unvested restricted stock during the applicable period, as the restricted stock is entitled to receive dividends and is therefore considered a participating security.  Unvested restricted stock is not allocated net losses and/or any excess of dividends declared over net income; such amounts are allocated entirely to the common stockholders other than the holders of unvested restricted stock.  The restricted stock units awarded under the Pay-for-Performance program described in Note 13 are excluded from the basic earnings per share calculation, as these units are not participating securities.

Diluted earnings per share reflects the potential dilution that could occur if securities or other rights exercisable for, or convertible into, common stock were exercised or converted or otherwise resulted in the issuance of common stock that shared in the earnings of the Company.  For the three and six months ended June 30, 2014 and 2013, the diluted weighted average number of common shares includes 100,000 shares (of an aggregate of 200,000 shares) of common stock underlying the restricted stock units awarded pursuant to the Pay-For-Performance program.  These 100,000 shares may vest upon satisfaction of the total stockholder return metric. The number of shares that would be issued pursuant to this metric is based on the market price and dividends paid as of the end of each quarterly period assuming the end of that quarterly period was the end of the vesting period.  The remaining 100,000 shares of common stock underlying the restricted stock units awarded under the Pay-For-Performance program are not included during the three and six months ended June 30, 2014 and 2013, as they did not meet the return on capital performance metric during such periods.

There were no options outstanding to purchase shares of common stock or other rights exercisable for, or convertible into, common stock during the six months ended June 30, 2014 and 2013.

The following table provides a reconciliation of the numerator and denominator of earnings per share calculations (amounts in thousands, except per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Numerator for basic and diluted earnings per share:
Income from continuing operations	$	4,662		$	7,607		$	7,949		$	10,920
Less: net income attributable to non-controlling interests	(22		)	(16		)	(49		)	(15		)
Less: earnings allocated to unvested shares	(178		)	—			(356		)	—
Income from continuing operations available for common stockholders	4,462			7,591			7,544			10,905
Discontinued operations	—			145			13			281
Net income available for common stockholders, basic and diluted	$	4,462		$	7,736		$	7,557		$	11,186
Denominator for basic earnings per share:
- weighted average common shares	15,518			14,844			15,436			14,759
- weighted average unvested restricted stock shares	—			470			—			477
	15,518			15,314			15,436			15,236
Effect of diluted securities:
- restricted stock units awarded under Pay-for-Performance program	100			100			100			100
Denominator for diluted earnings per share
- weighted average shares	15,618			15,414			15,536			15,336
Earnings per common share, basic	$	.29		$	.51		$	.49		$	.73
Earnings per common share, diluted	$	.29		$	.50		$	.49		$	.73
Net Income attributable to One Liberty Properties, Inc. common stockholders, net of non-controlling interests:
Income from continuing operations	$	4,640		$	7,591		$	7,900		$	10,905
Income from discontinued operations	—			145			13			281
Net income attributable to One Liberty Properties, Inc.	$	4,640		$	7,736		$	7,913		$	11,186

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Basis of Preparation

6 Months Ended

Jun. 30, 2014

Basis of Preparation

Basis of Preparation

Note 2 - Basis of Preparation

Principles of Consolidation/Basis of Preparation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by U.S. Generally Accepted Accounting Principles (“GAAP”) for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statement disclosures. In the opinion of management, all adjustments necessary for fair presentation (including normal recurring accruals) have been included. The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results for the full year. These statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.

The consolidated financial statements include the accounts and operations of OLP, its wholly-owned subsidiaries and its investment in six joint ventures in which the Company, as defined, has a controlling interest.  OLP and its consolidated subsidiaries are hereinafter referred to as the “Company”.  Material intercompany items and transactions have been eliminated in consolidation.

Investment in Joint Ventures

The Company assesses the accounting treatment for each joint venture investment. This assessment includes a review of each joint venture or limited liability company agreement to determine the rights of each party and whether those rights are protective or participating. The agreements typically contain certain protective rights such as the requirement of partner approval to sell, finance or refinance the property and to pay capital expenditures and operating expenditures outside of the approved budget or operating plan. In situations where the Company and its partner, among other things, (i) approve the annual budget, (ii) approve certain expenditures, (iii) prepare or review and approve the joint venture’s tax return before filing, and (iv) approve each lease at each property, the Company does not consolidate the joint venture as the Company considers these to be substantive participation rights that result in shared power over the activities that most significantly impact the performance of the joint venture.  Additionally, the Company assesses the accounting treatment for any interests pursuant to which the Company may have a variable interest as a lessor.  Leases may contain certain protective rights such as the right of sale and the receipt of certain escrow deposits.  In situations where the Company does not have the power over tenant activities that most significantly impact the performance of the property the Company would not consolidate.

The Financial Accounting Standard’s Board, or FASB’s, guidance for determining whether an entity is a variable interest entity, or VIE, requires the performance of a qualitative rather than a quantitative analysis to determine the primary beneficiary of a VIE. Under this guidance, an entity would be required to consolidate a VIE if it has (i) the power to direct the activities that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.

In June 2014, the Company purchased land for $6,510,000 in Sandy Springs, Georgia improved with a 196 unit apartment complex, and simultaneously entered into a long-term triple net ground lease with the owner/operator of this complex (see Note 4).  The Company determined that it has a variable interest through its ground lease and the owner/operator is a VIE because its equity investment at risk is not sufficient to finance its activities without additional subordinated financial support.  The Company’s fee interest in the land is collateral for the owner/operator’s loan on the buildings located at this property. The Company further determined that it is not the primary beneficiary because the Company does not have the power to direct the activities that most significantly impact the owner/operator’s economic performance such as management, operational budgets and other rights, including leasing of the units and therefore, will not consolidate the VIE for financial statement purposes.  Accordingly, the Company will account for its investment as land and the revenue from the ground lease as Rental Income, net.  At June 30, 2014, the Company’s maximum exposure to loss as a result of the ground lease is an aggregate of $6,540,000, representing the $6,516,000 carrying value of the land, included in Real estate investments, net, on the consolidated balance sheets and the rent receivable of $24,000.

In June 2014, the Company entered into a joint venture, in which the Company has a 95% equity interest, and acquired a property located in Joppa, Maryland (see Note 4).  The Company also made a senior preferred equity investment in the joint venture.  The Company has determined that this joint venture is a VIE as the Company’s voting rights are not proportional to its economic interests and substantially all of the joint venture’s activities are conducted by the Company.  The Company further determined that it is the primary beneficiary of the VIE as it has the power to direct the activities that most significantly impact the joint venture’s performance including management, approval of expenditures, and sale of the property, as well as the obligation to absorb the losses or rights to receive benefits from the VIE.  Accordingly, the Company consolidates the operations of this joint venture for financial statement purposes.

For the consolidated VIE, the carrying amounts and classification in the Company’s consolidated balance sheets were assets (none of which are restricted) consisting of land of $3,803,000 and building and improvements of $8,142,000, accrued expenses and other liabilities of $78,000 and non-controlling interest in joint ventures of $5,000. The joint venture’s creditors do not have recourse to the assets of the Company other than those held by the joint venture.

With respect to five consolidated joint ventures in which the Company has between an 85% to 95% interest, the Company has determined that (i) such ventures are not VIE’s and (ii) the Company exercises substantial operating control and accordingly, such ventures are consolidated for financial statement purposes.

The Company accounts for its investments in five unconsolidated joint ventures under the equity method of accounting.  All investments in these five joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result, none of these five joint ventures are VIE’s.  In addition, although the Company is the managing member, it does not exercise substantial operating control over these entities, and therefore the entities are not consolidated. These investments are recorded initially at cost, as investments in unconsolidated joint ventures, and subsequently adjusted for their share of equity in earnings, cash contributions and distributions.  None of the joint venture debt is recourse to the Company, subject to standard carve-outs.

Reclassification

Certain amounts previously reported in the consolidated financial statements for the three and six months ended June 30, 2013 relating to the operations of two properties that were sold in February 2014 have been reclassified to discontinued operations in the accompanying consolidated financial statements to conform to the current period’s presentation.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2014

Fair Value Measurements

Fair Value Measurements

Note 14 - Fair Value Measurements

The Company measures the fair value of financial instruments based on the assumptions that market participants would use in pricing the asset or liability.  As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions.  In accordance with the fair value hierarchy, Level 1 assets/liabilities are valued based on quoted prices for identical instruments in active markets, Level 2 assets/liabilities are valued based on quoted prices in active markets for similar instruments, on quoted prices in less active or inactive markets, or on other “observable” market inputs and Level 3 assets/liabilities are valued based significantly on “unobservable” market inputs.

The carrying amounts of cash and cash equivalents, restricted cash, escrow, deposits and other assets and receivables, and accrued expenses and other liabilities are not measured at fair value on a recurring basis, but are considered to be recorded at amounts that approximate fair value.

At June 30, 2014, the $289,447,000 estimated fair value of the Company’s mortgages payable is more than their carrying value by approximately $5,074,000 assuming a blended market interest rate of 4.8% based on the 9.2 year weighted average remaining term of the mortgages.  At December 31, 2013, the $283,142,000 estimated fair value of the Company’s mortgages payable is more than their carrying value by approximately $5,097,000 assuming a blended market interest rate of 5% based on the 9.0 year weighted average remaining term of the mortgages.

At June 30, 2014 and December 31, 2013, the $36,850,000 and $23,250,000, respectively, carrying amount of the Company’s line of credit approximates its fair value.

The fair value of the Company’s mortgages payable and line of credit are estimated using unobservable inputs such as available market information and discounted cash flow analysis based on borrowing rates the Company believes it could obtain with similar terms and maturities. These fair value measurements fall within Level 3 of the fair value hierarchy.

Considerable judgment is necessary to interpret market data and develop estimated fair value.  The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Financial Instruments Measured at Fair Value

The fair value of the Company’s available-for-sale securities and derivative financial instruments was determined using the following inputs (amounts in thousands):

		Carrying and		Fair Value Measurements Using Fair Value Hierarchy on a Recurring Basis
	As of	Fair Value		Level 1		Level 2
Financial assets:
Available-for-sale securities:
Equity securities	June 30, 2014	$	25	$	25	$	—
	December 31, 2013	282		282		—
Derivative financial instruments:
Interest rate swaps	June 30, 2014	112		—		112
	December 31, 2013	265		—		265
Financial liabilities:
Derivative financial instruments:
Interest rate swaps	June 30, 2014	2,206		—		2,206
	December 31, 2013	774		—		774

The Company does not own any financial instruments that are classified as Level 3.

Available-for-sale securities

At June 30, 2014, the Company’s available-for-sale securities included a $25,200 investment in other equity securities (included in other assets on the consolidated balance sheet). The aggregate cost of these securities was $5,300 and at June 30, 2014, the unrealized gain was $19,900. Such unrealized gains were included in accumulated other comprehensive loss on the consolidated balance sheet.  Fair values are approximated based on current market quotes from financial sources that track such securities.

In May 2014, the Company sold to Gould Investors L.P., a related party, 37,081 shares of BRT Realty Trust, a related party, for proceeds of $266,000 (based on the average of the closing prices for the 30 days preceding the sale).  The cost of these shares was $132,000 and the Company realized a gain on sale of $134,000, of which $132,000 was reclassified from accumulated other comprehensive loss on the consolidated balance sheet into earnings.

Derivative financial instruments

Fair values are approximated using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with it use Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparty.  As of June 30, 2014, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.  As a result, the Company determined that its derivative valuation is classified in Level 2 of the fair value hierarchy.

As of June 30, 2014, the Company had 15 interest rate derivatives outstanding, all of which were interest rate swaps, related to 15 outstanding mortgage loans with an aggregate $77,623,000 notional amount and mature between 2014 and 2024 (weighted average maturity of 6.55 years).  Such interest rate swaps, all of which were designated as cash flow hedges, converted Libor based variable rate mortgages to fixed annual rate mortgages (with interest rates ranging from 3.55% to 6.50% and a weighted average interest rate of 4.97% at June 30, 2014).  The fair value of the Company’s derivatives designated as hedging instruments in asset and liability positions reflected as other assets or other liabilities on the consolidated balance sheets were $112,000 and $2,206,000, respectively, at June 30, 2014, and $265,000 and $774,000, respectively, at December 31, 2013.

Two of the Company’s unconsolidated joint ventures, in which a wholly owned subsidiary of the Company is a 50% partner, had an interest rate derivative outstanding at June 30, 2014 with a notional amount of $3,756,000. This interest rate derivative has an interest rate of 5.81% and matures in April 2018.

The following table presents the effect of the Company’s derivative financial instruments on the consolidated statement of income for the periods presented (amounts in thousands):

	Three Months EndedJune 30,						Six Months EndedJune 30,
	2014			2013			2014			2013
One Liberty Properties and Consolidated Subsidiaries
Amount of (loss) gain recognized on derivatives in Other comprehensive loss	$	(1,227	)	$	574		$	(2,408	)	$	600
Amount of loss reclassification from Accumulated other comprehensive loss into Interest expense	(1,302		)	(156		)	(824		)	(308		)
Unconsolidated Joint Ventures (Company’s share)
Amount of (loss) gain recognized on derivative in Other comprehensive loss	$	(245	)	$	37		$	(48	)	$	33
Amount of (loss) gain reclassification from Accumulated other comprehensive loss into Equity in earnings of unconsolidated joint ventures	(34		)	(14		)	55			(28		)

No gain or loss was recognized with respect to hedge ineffectiveness or to amounts excluded from effectiveness testing on the Company’s cash flow hedges for the three and six months ended June 30, 2014 and 2013.  During the twelve months ending June 30, 2015, the Company estimates an additional $1,572,000 will be reclassified from other comprehensive income (loss) as an increase to interest expense.

The derivative agreements in effect at June 30, 2014 provide that if the wholly owned subsidiary of the Company which is a party to the agreement defaults or is capable of being declared in default on any of its indebtedness, then a default can be declared on such subsidiary’s derivative obligation. In addition, the Company is a party to one of the derivative agreements and if the subsidiary defaults on the loan subject to such agreement and if there are swap breakage losses on account of the derivative being terminated early, the Company could be held liable for interest rate swap breakage losses, if any.

As of June 30, 2014, the fair value of the derivatives in a liability position, including accrued interest, and excluding any adjustments for nonperformance risk, was approximately $2,379,000.  In the unlikely event that the Company breaches any of the contractual provisions of the derivative contracts, it would be required to settle its obligations thereunder at their termination liability value of $2,379,000.  Such amount is included in accrued expenses and other liabilities at June 30, 2014.

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Compensation and Services Agreement

6 Months Ended

Jun. 30, 2014

Compensation and Services Agreement

Compensation and Services Agreement

Note 10 - Compensation and Services Agreement

The Company agreed to pay fees of $3,300,000 and $3,465,000 in 2014 and 2015, respectively (including overhead expenses of $186,375 and $195,694 and property management fees, included in real estate expenses on the income statement, of $850,000 and $892,500 in 2014 and 2015, respectively) pursuant to the compensation and services agreement, as amended, with Majestic Property Management Corp.  Majestic Property Management Corp is wholly-owned by the Vice Chairman of the Company’s Board of Directors.   The 2014 fee represents an increase of $400,000 over the 2013 fee and the 2015 fee represents a $165,000 increase over the 2014 fee. The results of a report prepared by an independent compensation consultant were used to evaluate and support these increases.

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Investment in Unconsolidated Joint Ventures

6 Months Ended

Jun. 30, 2014

Investment in Unconsolidated Joint Ventures

Investment in Unconsolidated Joint Ventures

Note 6 - Investment in Unconsolidated Joint Ventures

At June 30, 2014 and December 31, 2013, the Company had investments in five unconsolidated joint ventures, each of which owned and operated one property. The Company’s equity investment in such unconsolidated joint ventures at such dates totaled $4,833,000 and $4,906,000, respectively. In addition to the $2,807,000 gain on the sale of a tenant-in-common property in the three and six months ended June 30, 2013, the Company recorded equity in earnings of $263,000 and $391,000 for the six months ended June 30, 2014 and 2013, respectively, and $130,000 and $57,000 for the three months ended June 30, 2014 and 2013, respectively.

Additionally, in April 2013, the Company sold its 90% equity interest in a joint venture to its partner and recorded a gain of $1,898,000.

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Real Estate Acquisitions and Contingent Liability

6 Months Ended

Jun. 30, 2014

Real Estate Acquisitions and Contingent Liability

Real Estate Acquisitions and Contingent Liability

Note 4 - Real Estate Acquisitions and Contingent Liability

The following chart details the Company’s real estate acquisitions, all of which were acquired for cash, during the six months ended June 30, 2014 (amounts in thousands):

Description of Property	Date Acquired	Contract Purchase Price		Third Party Real Estate Acquisition Costs (a)
Total Wine and More retail store, Greensboro, North Carolina	January 21, 2014	$	2,971	$	20
Chuck E Cheese restaurant, Indianapolis, Indiana	January 23, 2014	2,138		9
Savers Thrift Superstore, Highlands Ranch, Colorado	May 7, 2014	4,825		45
Hobby Lobby retail store, Woodbury, Minnesota	May 21, 2014	4,770		13
Land - River Crossing Apartments, Sandy Springs, Georgia (b)	June 4, 2014	6,510		—		(c)
Noxell Corporation industrial building, Joppa, Maryland (d)	June 26, 2014	11,650		—		(c)
Other (e)		—		41
Totals		$	32,864	$	128

(a) Included as an expense in the accompanying consolidated statement of income.

(b) The Company’s fee interest in the land is collateral for the tenant’s mortgage loan secured by the buildings located at this property.

(c) Transaction costs aggregating $301 incurred with these asset acquisitions were capitalized.

(d) Owned by a joint venture in which the Company has a 95% interest.  The non-controlling interest contributed $306 for its 5% interest, which was equal to the fair value at the date of purchase.

(e) Costs incurred for potential acquisitions and properties purchased in 2013.

The following chart provides the allocation of the purchase price for the Company’s real estate acquisitions during the six months ended June 30, 2014 (amounts in thousands):

					Building		Intangible Lease
Description of Property	Land		Building		Improvements		Asset			Liability			Total
Total Wine and More retail store, Greensboro, North Carolina	$	1,046	$	1,468	$	83	$	374		$	—		$	2,971
Chuck E Cheese restaurant, Indianapolis, Indiana	853		1,321		145		94			(275		)	2,138
Savers Thrift Superstore, Highlands Ranch, Colorado	2,231		2,614		277		846			(1,143		)	4,825
Hobby Lobby retail store, Woodbury, Minnesota	1,190		3,667		335		734			(1,156		)	4,770
Land - River Crossing Apartments, Sandy Springs, Georgia (a)	6,516		—		—		—			—			6,516
Noxell Corporation industrial building, Joppa, Maryland (b)	3,803		7,991		151		—			—			11,945
Subtotals	15,639		17,061		991		2,048			(2,574		)	33,165
Other (c)	74		70		18		(59		)	(97		)	6
Totals	$	15,713	$	17,131	$	1,009	$	1,989		$	(2,671	)	$	33,171

(a) Includes capitalized transaction costs of $6 incurred with this asset acquisition.

(b) Includes capitalized transaction costs of $295 incurred with this asset acquisition.

(c) Adjustments to finalize intangibles relating to properties purchased in 2013.

Each property purchased by the Company in 2014 is net leased by a single tenant pursuant to a lease that expires between 2015 through 2044.

In June 2014, the Company purchased land in Sandy Springs, Georgia improved with a 196 unit apartment complex, for a land purchase price of $6,510,000 and simultaneously entered into a long-term triple net ground lease with the owner/operator of this complex.  Pursuant to the terms of the ground lease, the owner/operator is obligated to make certain unit renovations as and when units become vacant.  A cash reserve of $1,894,000 was received by the Company to cover this renovation work and other reserve requirements, which is included in Restricted cash on the consolidated balance sheet.

At the time of the closing, the owner/operator obtained a $16,230,000 mortgage which, together with the Company’s purchase of the land, provided substantially all of the aggregate costs to acquire the complex.  The Company was required to provide its land as collateral for the mortgage loan; accordingly the land position is subordinated to the mortgage.

As a result of the 2014 acquisitions, the Company recorded intangible lease assets of $2,048,000 and intangible lease liabilities of $2,574,000, representing the value of the origination costs and acquired leases.  As of June 30, 2014, the weighted average amortization period for these acquisitions is 7.7 years for the intangible lease assets and 8.4 years for the intangible lease liabilities. The Company assessed the fair value of the lease intangibles based on estimated cash flow projections that utilize appropriate discount rates and available market information. Such inputs are Level 3 (as defined in Note 14) in the fair value hierarchy. The Company is currently in the process of finalizing the purchase price allocations for four properties that were acquired during the three months ended June 30, 2014; therefore, these allocations are preliminary and subject to change.

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Lease Termination Fee Income

6 Months Ended

Jun. 30, 2014

Lease Termination Fee Income

Lease Termination Fee Income

Note 5 — Lease Termination Fee Income

In June 2014, the Company received a $1,269,000 lease termination fee from a retail tenant in a lease buy-out transaction.  In connection with the receipt of this fee, the Company wrote-off $150,000 as an offset to rental income, representing the entire balance of the unbilled rent receivable and the intangible lease asset related to this property.  The Company re-leased this property simultaneously with the termination of the existing tenant’s lease.

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Allowance for Doubtful Accounts

6 Months Ended

Jun. 30, 2014

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

Note 7 - Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its tenants to make required rent payments.  If the financial condition of a specific tenant were to deteriorate resulting in an impairment of its ability to make payments, additional allowances may be required.  At June 30, 2014 and December 31, 2013, there was no balance in allowance for doubtful accounts.

The Company records bad debt expense as a reduction of rental income. For the three and six months ended June 30, 2014 and 2013, the Company did not incur any bad debt expense.

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Earnings Per Common Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Earnings Per Common Share
Number of shares awarded under Pay-for-Performance program included in diluted weighted average number of shares	100,000	100,000	100,000	100,000
Underlying number of shares awarded under Pay-for-Performance program included in calculation of diluted weighted average number of shares	200,000	200,000	200,000	200,000
Number of shares awarded under Pay-for-Performance program not included in diluted weighted average number of shares	100,000	100,000	100,000	100,000
Outstanding options at the end of the period (in shares)	0	0	0	0	0
Numerator for basic and diluted earnings per share:
Income from continuing operations	$ 4,662	$ 7,607	$ 7,949	$ 10,920
Less: net income attributable to non-controlling interests	(22)	(16)	(49)	(15)
Less: earnings allocated to unvested shares	(178)		(356)
Income from continuing operations available for common stockholders	4,462	7,591	7,544	10,905
Discontinued operations		145	13	281
Net income available for common stockholders, basic	4,462	7,736	7,557	11,186
Net income available for common stockholders, diluted	4,462	7,736	7,557	11,186
Denominator for basic earnings per share:
Weighted average common shares	15,518,000	14,844,000	15,436,000	14,759,000
Weighted average unvested restricted stock shares		470,000		477,000
Denominator for basic earnings per share (in shares)	15,518,000	15,314,000	15,436,000	15,236,000
Effect of diluted securities:
Restricted stock units awarded under Pay-for-Performance program (in shares)	100,000	100,000	100,000	100,000
Denominator for diluted earnings per share - weighted average shares	15,618,000	15,414,000	15,536,000	15,336,000
Earnings per common share, basic (in dollars per share)	$ 0.29	$ 0.51	$ 0.49	$ 0.73
Earnings per common share, diluted (in dollars per share)	$ 0.29	$ 0.50	$ 0.49	$ 0.73
Net Income attributable to One Liberty Properties, Inc. common stockholders, net of non-controlling interests:
Income from continuing operations	4,640	7,591	7,900	10,905
Income from discontinued operations		145	13	281
Net income attributable to One Liberty Properties, Inc.	$ 4,640	$ 7,736	$ 7,913	$ 11,186

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Shares Issued through Equity Offering Program

6 Months Ended

Jun. 30, 2014

Shares Issued through Equity Offering Program

Shares Issued through Equity Offering Program

Note 12 - Shares Issued through Equity Offering Program

On March 20, 2014, the Company entered into an amended and restated equity offering sales agreement to sell shares of the Company’s common stock from time to time with an aggregate sales price of up to approximately $38,360,000, through an “at the market” equity offering program.  During the six months ended June 30, 2014, the Company sold 156,172 shares for proceeds of $3,402,000, net of commissions of $34,000, and incurred offering costs, primarily professional fees, of $98,000.  The Company has not sold any additional shares subsequent to June 30, 2014.

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Basis of Preparation (Policies)

6 Months Ended

Jun. 30, 2014

Basis of Preparation

Principles of Consolidation/Basis of Preparation

Principles of Consolidation/Basis of Preparation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by U.S. Generally Accepted Accounting Principles (“GAAP”) for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statement disclosures. In the opinion of management, all adjustments necessary for fair presentation (including normal recurring accruals) have been included. The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results for the full year. These statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.

The consolidated financial statements include the accounts and operations of OLP, its wholly-owned subsidiaries and its investment in six joint ventures in which the Company, as defined, has a controlling interest.  OLP and its consolidated subsidiaries are hereinafter referred to as the “Company”.  Material intercompany items and transactions have been eliminated in consolidation.

Investment in Joint Ventures

The Company accounts for its investments in five unconsolidated joint ventures under the equity method of accounting.  All investments in these five joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result, none of these five joint ventures are VIE’s.  In addition, although the Company is the managing member, it does not exercise substantial operating control over these entities, and therefore the entities are not consolidated. These investments are recorded initially at cost, as investments in unconsolidated joint ventures, and subsequently adjusted for their share of equity in earnings, cash contributions and distributions.  None of the joint venture debt is recourse to the Company, subject to standard carve-outs.

Reclassification

Reclassification

Certain amounts previously reported in the consolidated financial statements for the three and six months ended June 30, 2013 relating to the operations of two properties that were sold in February 2014 have been reclassified to discontinued operations in the accompanying consolidated financial statements to conform to the current period’s presentation.

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Compensation and Services Agreement (Details) (Majestic Property Management Corp, USD $)	6 Months Ended
	Jun. 30, 2014
Majestic Property Management Corp
Compensation and Services Agreement
Total fees under compensation and services agreement for 2014	$ 3,300,000
Total fees agreed under compensation and services agreement for 2015	3,465,000
Overhead expenses under compensation and services agreement for 2014	186,375
Overhead expenses under compensation and services agreement for 2015	195,694
Management fees agreed under compensation and services agreement for 2014	850,000
Management fees under compensation and services agreement for 2015	892,500
Increase in total fees under compensation and services agreement for 2014 vs. 2013	400,000
Increase in total fees under compensation and services agreement for 2015 vs. 2014	$ 165,000

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CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
CONSOLIDATED STATEMENTS OF INCOME
General and administrative, related parties	$ 610	$ 572	$ 1,219	$ 1,144
Real estate expenses, related party	$ 212	$ 150	$ 425	$ 300

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Organization and Background

6 Months Ended

Jun. 30, 2014

Organization and Background

Organization and Background

Note 1 - Organization and Background

One Liberty Properties, Inc. (“OLP”) was incorporated in 1982 in Maryland.  OLP is a self-administered and self-managed real estate investment trust (“REIT”).  OLP acquires, owns and manages a geographically diversified portfolio of retail (including furniture stores, restaurants, office supply stores and supermarkets), industrial, flex, office, health and fitness and other properties, a substantial portion of which are subject to long-term net leases.  As of June 30, 2014, OLP owned 113 properties, including six properties owned by consolidated joint ventures and five properties owned by unconsolidated joint ventures. The 113 properties are located in 30 states.

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Earnings Per Common Share (Tables)

6 Months Ended

Jun. 30, 2014

Earnings Per Common Share

Schedule of reconciliation of numerator and denominator of earnings per share calculations

The following table provides a reconciliation of the numerator and denominator of earnings per share calculations (amounts in thousands, except per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Numerator for basic and diluted earnings per share:
Income from continuing operations	$	4,662		$	7,607		$	7,949		$	10,920
Less: net income attributable to non-controlling interests	(22		)	(16		)	(49		)	(15		)
Less: earnings allocated to unvested shares	(178		)	—			(356		)	—
Income from continuing operations available for common stockholders	4,462			7,591			7,544			10,905
Discontinued operations	—			145			13			281
Net income available for common stockholders, basic and diluted	$	4,462		$	7,736		$	7,557		$	11,186
Denominator for basic earnings per share:
- weighted average common shares	15,518			14,844			15,436			14,759
- weighted average unvested restricted stock shares	—			470			—			477
	15,518			15,314			15,436			15,236
Effect of diluted securities:
- restricted stock units awarded under Pay-for-Performance program	100			100			100			100
Denominator for diluted earnings per share
- weighted average shares	15,618			15,414			15,536			15,336
Earnings per common share, basic	$	.29		$	.51		$	.49		$	.73
Earnings per common share, diluted	$	.29		$	.50		$	.49		$	.73
Net Income attributable to One Liberty Properties, Inc. common stockholders, net of non-controlling interests:
Income from continuing operations	$	4,640		$	7,591		$	7,900		$	10,905
Income from discontinued operations	—			145			13			281
Net income attributable to One Liberty Properties, Inc.	$	4,640		$	7,736		$	7,913		$	11,186

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Allowance for Doubtful Accounts (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Allowance for Doubtful Accounts
Balance in allowance for doubtful accounts	$ 0	$ 0

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Common Stock Cash Dividend

6 Months Ended

Jun. 30, 2014

Common Stock Cash Dividend

Common Stock Cash Dividend

Note 11 - Common Stock Cash Dividend

On June 11, 2014, the Board of Directors declared a quarterly cash dividend of $.37 per share on the Company’s common stock, totaling $5,948,000. The quarterly dividend was paid on July 2, 2014 to stockholders of record on June 25, 2014.