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 September 30, 2018

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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes  x      No o

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Yes o     No 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 November 1, 2018, the registrant had 19,387,581 shares of common stock outstanding.

One Liberty Properties, Inc. and Subsidiaries

Table of Contents

		Page No.
Part I - Financial Information
Item 1.	Unaudited Consolidated Financial Statements
	Consolidated Balance Sheets — September 30, 2018 and December 31, 2017	1
	Consolidated Statements of Income — Three and nine months ended September 30, 2018 and 2017	2
	Consolidated Statements of Comprehensive Income — Three and nine months ended September 30, 2018 and 2017	3
	Consolidated Statements of Changes in Equity — Nine months ended September 30, 2018 and 2017	4
	Consolidated Statements of Cash Flows — Nine months ended September 30, 2018 and 2017	5
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	42
Part II — Other Information
Item 6.	Exhibits	43

Part I — FINANCIAL INFORMATION

Item 1.   Financial Statements

ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in Thousands, Except Par Value)

	September 30, 2018			December 31, 2017
	(Unaudited)
ASSETS
Real estate investments, at cost
Land	$	199,509		$	209,320
Buildings and improvements	584,804			566,007
Total real estate investments, at cost	784,313			775,327
Less accumulated depreciation	120,622			108,953
Real estate investments, net	663,691			666,374
Investment in unconsolidated joint ventures	10,283			10,723
Cash and cash equivalents	17,173			13,766
Restricted cash	379			443
Unbilled rent receivable, net of allowance of $1,440 and $0, respectively	13,407			14,125
Unamortized intangible lease assets, net	26,326			30,525
Escrow, deposits and other assets and receivables	11,178			6,630
Total assets(1)	$	742,437		$	742,586
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net of $4,029 and $3,789 of deferred financing costs, respectively	$	402,978		$	393,157
Line of credit, net of $0 and $624 of deferred financing costs, respectively	—			8,776
Dividends payable	8,694			8,493
Accrued expenses and other liabilities	7,951			16,107
Unamortized intangible lease liabilities, net	15,308			17,551
Total liabilities (1)	434,931			444,084
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; 18,669 and 18,261 shares issued and outstanding	18,669			18,261
Paid-in capital	284,772			275,087
Accumulated other comprehensive income	4,781			155
Accumulated (distributions in excess of net income) undistributed net income	(2,155		)	3,257
Total One Liberty Properties, Inc. stockholders’ equity	306,067			296,760
Non-controlling interests in consolidated joint ventures (1)	1,439			1,742
Total equity	307,506			298,502
Total liabilities and equity	$	742,437		$	742,586

(1)The Company’s consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”).  See Note 6.  The consolidated balance sheets include the following amounts related to the Company’s consolidated VIEs: $14,722 and $17,844 of land, $27,893 and $31,789 of building and improvements, net of $3,867 and $3,811 of accumulated depreciation, $3,908 and $4,345 of other assets included in other line items, $27,143 and $32,252 of real estate debt, net, $2,459 and $2,885 of other liabilities included in other line items and $1,439 and $1,742 of non-controlling interests as of September 30, 2018 and December 31, 2017, respectively.

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 September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Revenues:
Rental income, net	$	17,193		$	17,217		$	52,501		$	50,770
Tenant reimbursements	2,005			1,920			5,983			5,252
Lease termination fee	372			—			372			—
Total revenues	19,570			19,137			58,856			56,022
Operating expenses:
Depreciation and amortization	5,672			5,115			16,104			15,858
General and administrative (see Note 11 for related party information)	3,071			2,701			8,999			8,409
Real estate expenses (see Note 11 for related party information)	2,592			2,689			7,774			7,765
Federal excise and state taxes	59			90			286			401
Leasehold rent	77			77			231			231
Impairment loss	—			153			—			153
Total operating expenses	11,471			10,825			33,394			32,817
Other operating income
Gain on sale of real estate, net	4,585			3,269			6,993			9,837
Operating income	12,684			11,581			32,455			33,042
Other income and expenses:
Equity in earnings of unconsolidated joint ventures	173			212			716			663
Equity in earnings from sale of unconsolidated joint venture properties	1,986			—			2,057			—
Other income	7			57			17			399
Interest:
Expense	(4,448		)	(4,459		)	(13,195		)	(13,380		)
Amortization and write-off of deferred financing costs	(220		)	(263		)	(669		)	(717		)
Net income	10,182			7,128			21,381			20,007
Net income attributable to non-controlling interests	(35		)	(23		)	(866		)	(65		)
Net income attributable to One Liberty Properties, Inc.	$	10,147		$	7,105		$	20,515		$	19,942
Weighted average number of common shares outstanding:
Basic	18,646			18,000			18,521			17,859
Diluted	18,705			18,079			18,562			17,961
Per common share attributable to common stockholders:
Basic	$	.53		$	.38		$	1.06		$	1.07
Diluted	$	.52		$	.38		$	1.06		$	1.07
Cash distributions declared per share of common stock	$	.45		$	.43		$	1.35		$	1.29

See accompanying notes to consolidated financial statements.

2

ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in Thousands)

(Unaudited)

	Three Months Ended September 30						Nine Months Ended September 30
	2018			2017			2018			2017
Net income	$	10,182		$	7,128		$	21,381		$	20,007
Other comprehensive gain
Net unrealized gain on derivative instruments	871			104			4,671			172
Reclassification of One Liberty Properties Inc.’s share of joint venture net realized gain on derivative instrument	—			—			(110		)	—
One Liberty Properties Inc.’s share of joint venture net unrealized gain on derivative instruments	—			11			76			34
Other comprehensive gain	871			115			4,637			206
Comprehensive income	11,053			7,243			26,018			20,213
Net income attributable to non-controlling interests	(35		)	(23		)	(866		)	(65		)
Adjustment for derivative instruments attributable to non-controlling interests	(3		)	(1		)	(11		)	(2		)
Comprehensive income attributable to One Liberty Properties, Inc.	$	11,015		$	7,219		$	25,141		$	20,146

See accompanying notes to consolidated financial statements.

3

ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in Thousands, Except Per Share Data)

(Unaudited)

	Common Stock		Paid-in Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated (distributions in excess of net income) undistributed net income			Non-Controlling Interests in Consolidated Joint Ventures			Total
Balances, December 31, 2016	$	17,600	$	262,511		$	(1,479	)	$	11,501		$	1,794		$	291,927
Distributions — common stock
Cash - $1.29 per share	—		—			—			(23,899		)	—			(23,899		)
Shares issued through equity offering program — net	135		2,932			—			—			—			3,067
Restricted stock vesting	232		(232		)	—			—			—			—
Shares issued through dividend reinvestment plan	147		3,210			—			—			—			3,357
Distributions to non-controlling interests	—		—			—			—			(148		)	(148		)
Compensation expense — restricted stock	—		2,341			—			—			—			2,341
Net income	—		—			—			19,942			65			20,007
Other comprehensive income	—		—			204			—			2			206
Balances, September 30, 2017	$	18,114	$	270,762		$	(1,275	)	$	7,544		$	1,713		$	296,858
Balances, December 31, 2017	$	18,261	$	275,087		$	155		$	3,257		$	1,742		$	298,502
Distributions — common stock
Cash - $1.35 per share	—		—			—			(25,927		)	—			(25,927		)
Shares issued through equity offering program — net	126		3,044			—			—			—			3,170
Restricted stock vesting	106		(106		)	—			—			—			—
Shares issued through dividend reinvestment plan	176		4,094			—			—			—			4,270
Distributions to non-controlling interests	—		—			—			—			(1,180		)	(1,180		)
Compensation expense — restricted stock	—		2,653			—			—			—			2,653
Net income	—		—			—			20,515			866			21,381
Other comprehensive income	—		—			4,626			—			11			4,637
Balances, September 30, 2018	$	18,669	$	284,772		$	4,781		$	(2,155	)	$	1,439		$	307,506

See accompanying notes to consolidated financial statements.

4

ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in Thousands)

(Unaudited)

	Nine Months Ended September 30,
	2018			2017
Cash flows from operating activities:
Net income	$	21,381		$	20,007
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of real estate, net	(6,993		)	(9,837		)
Impairment loss	—			153
Increase in unbilled rent receivable	(841		)	(509		)
Write-off of unbilled rent receivable	74			362
Bad debt expense	—			310
Provision for unbilled rent receivable	1,440			—
Amortization and write-off of intangibles relating to leases, net	(1,605		)	(654		)
Amortization of restricted stock expense	2,653			2,341
Equity in earnings of unconsolidated joint ventures	(716		)	(663		)
Equity in earnings from sale of unconsolidated joint venture properties	(2,057		)	—
Distributions of earnings from unconsolidated joint ventures	2,328			584
Depreciation and amortization	16,104			15,858
Amortization and write-off of deferred financing costs	669			717
Payment of leasing commissions	(254		)	(67		)
(Increase) decrease in escrow, deposits, other assets and receivables	(1,154		)	273
(Decrease) increase in accrued expenses and other liabilities	(1,400		)	1,264
Net cash provided by operating activities	29,629			30,139
Cash flows from investing activities:
Purchase of real estate	(18,452		)	(35,443		)
Improvements to real estate	(6,829		)	(2,321		)
Net proceeds from sale of real estate	17,417			24,093
Distributions of capital from unconsolidated joint ventures	852			298
Net cash used in investing activities	(7,012		)	(13,373		)
Cash flows from financing activities:
Scheduled amortization payments of mortgages payable	(8,072		)	(7,808		)
Repayment of mortgages payable	(12,731		)	(11,541		)
Proceeds from mortgage financings	30,863			21,210
Proceeds from sale of common stock, net	3,170			3,067
Proceeds from bank line of credit	28,500			34,500
Repayment on bank line of credit	(37,900		)	(38,100		)
Issuance of shares through dividend reinvestment plan	4,270			3,357
Payment of financing costs	(675		)	(150		)
Distributions to non-controlling interests	(1,180		)	(148		)
Cash distributions to common stockholders	(25,726		)	(23,652		)
Net cash used in financing activities	(19,481		)	(19,265		)
Net increase (decrease) in cash, cash equivalents and restricted cash	3,136			(2,499		)
Cash, cash equivalents and restricted cash at beginning of year	14,668			18,450
Cash, cash equivalents and restricted cash at end of period	$	17,804		$	15,951

See accompanying notes to consolidated financial statements.

5

ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in Thousands)

(Unaudited) (Continued)

	Nine Months Ended September 30,
	2018		2017
Supplemental disclosures of cash flow information:
Cash paid during the period for interest expense	$	13,196	$	13,350
Supplemental schedule of non-cash investing activities:
Purchase accounting allocation — intangible lease assets	$	—	$	4,009
Purchase accounting allocation — intangible lease liabilities	—		(158		)

See accompanying notes to consolidated financial statements.

6

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018

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 consisting primarily of industrial, retail (including furniture stores and supermarkets), restaurant, health and fitness, and theater properties, many of which are subject to long-term net leases.  As of September 30, 2018, OLP owns 118 properties, including five properties owned by consolidated joint ventures and four properties owned by unconsolidated joint ventures. The 118 properties are located in 30 states.

Note 2 — Summary Accounting Policies

Principles of Consolidation/Basis of Preparation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by U.S. Generally Accepted Accounting Principles (“GAAP”) for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statement disclosures. In the opinion of management, all adjustments of a normal recurring nature necessary for fair presentation have been included. The results of operations for the three and nine months ended September 30, 2018 and 2017 are not necessarily indicative of the results for the full year. These statements should be read in conjunction with the consolidated financial statements and related notes included in OLP’s Annual Report on Form 10-K for the year ended December 31, 2017.

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

The consolidated financial statements include the accounts and operations of OLP, its wholly-owned subsidiaries, its joint ventures in which the Company, as defined, has a controlling interest, and variable interest entities (“VIEs”) of which the Company is the primary beneficiary.  OLP and its consolidated subsidiaries are referred to herein as the “Company”.  Material intercompany items and transactions have been eliminated in consolidation.

Investment in Joint Ventures and Variable Interest Entities

The Financial Accounting Standards Board, or FASB, provides guidance for determining whether an entity is a VIE. VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A VIE is required to be consolidated by its primary beneficiary, which is the party that (i) has the power to control the activities that most significantly impact the VIE’s economic performance and (ii) has the obligation to absorb losses, or the right to receive benefits, of the VIE that could potentially be significant to the VIE.

7

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 2 — Summary Accounting Policies (Continued)

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

The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting. All investments in unconsolidated joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result, none of these joint ventures are VIEs. In addition, the Company shares power with its co-managing members 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.

The Company periodically reviews its investments in unconsolidated joint ventures for other-than-temporary losses in investment value. Any decline that is not expected to be recovered based on the underlying assets of the investment is considered other than temporary and an impairment charge is recorded as a reduction in the carrying value of the investment. During the three and nine months ended September 30, 2018 and 2017, there were no impairment charges related to the Company’s investments in unconsolidated joint ventures.

The Company has elected to follow the cumulative earnings approach when assessing, for the consolidated statement of cash flows, whether the distribution from the investee is a return of the investor’s investment as compared to a return on its investment. The source of the cash generated by the investee to fund the distribution is not a factor in the analysis (that is, it does not matter whether the cash was generated through investee refinancing, sale of assets or operating results). Consequently, the investor only considers the relationship between the cash received from the investee to its equity in the undistributed earnings of the investee, on a cumulative basis, in assessing whether the distribution from the investee is a return on or a return of its investment. Cash received from the unconsolidated entity is presumed to be a return on the investment to the extent that, on a cumulative basis, distributions received by the investor are less than its share of the equity in the undistributed earnings of the entity.

8

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 2 — Summary Accounting Policies (Continued)

Reclassifications

Certain amounts previously reported in the consolidated financial statements have been reclassified in the accompanying consolidated financial statements to conform to the current period’s presentation.  Such reclassifications primarily relate to the presentation of (i) Gain on sale of real estate, net, on the consolidated statement of income for the three and nine months ended September 30, 2017 and (ii) restricted cash on the consolidated statement of cash flows for the nine months ended September 30, 2017.

The Company has included Gain on sale of real estate, net, as a component of Operating income, to present gains and losses on sales of properties in accordance with ASC 360-10-45-5. The change was made for the prior periods as the Securities and Exchange Commission has eliminated Rule 3-15(a) of Regulation S-X as part of Release Nos. 33-10532, 34-83875 and IC-33203, which had required REITs to present gains and losses on sales of properties outside of continuing operations in the income statement.

As of January 1, 2018, the Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires amounts generally described as restricted cash to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The adoption of this ASU has no impact on the Company’s previously reported consolidated balance sheets, consolidated statements of income, net income or accumulated undistributed net income for the periods presented.  As a result of the adoption of this guidance, the following table depicts the adjustments to the Company’s previously reported consolidated statement of cash flows (amounts in thousands):

	Nine Months Ended September 30, 2017
	As Reported			As Adjusted
Decrease in escrow, deposits, and other assets and receivables	$	165		$	273
Increase in accrued expenses and other liabilities	1,377			1,264
Net decrease in cash, cash equivalents and restricted cash	(2,494		)	(2,499		)
Cash, cash equivalents and restricted cash at beginning of year	17,420			18,450
Cash, cash equivalents and restricted cash at end of period	14,926			15,951

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (amounts in thousands):

	September 30,
	2018		2017
Cash and cash equivalents	$	17,173	$	14,926
Restricted cash	379		530
Restricted cash included in escrow, deposits and other assets and receivables	252		495
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows	$	17,804	$	15,951

9

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 2 — Summary Accounting Policies (Continued)

Amounts included in restricted cash represent the cash reserve balance received from an owner/operator at one of the Company’s ground leases to cover certain unit renovation work (see Note 6). Restricted cash included in escrow, deposits and other assets and receivables represent amounts related to real estate tax and other reserve escrows required to be held by lenders in accordance with the Company’s mortgage agreements.  The restriction on these escrow reserves will lapse when the related mortgage is repaid.

Note 3 — Earnings Per Common Share

Basic earnings per share was determined by dividing net income allocable to common stockholders for each period by the weighted average number of shares of common stock outstanding during the applicable period. Net income is also allocated to the unvested restricted stock outstanding during each period, as the unvested restricted stock is entitled to receive dividends and is therefore considered a participating security. As of September 30, 2018, the shares of common stock underlying the restricted stock units awarded under the 2016 Incentive Plan are excluded from the basic earnings per share calculation, as these units are not participating securities. The restricted stock units issued pursuant to the 2009 and 2016 Incentive Plans are referred to as “RSUs”.

Diluted earnings per share reflects the potential dilution that could occur if securities or other rights exercisable for, or convertible into, common stock were exercised or converted or otherwise resulted in the issuance of common stock that shared in the earnings of the Company.

The following table identifies the number of shares of common stock underlying the RSUs awarded under the 2016 Incentive Plan that are included in the calculation of diluted weighted average number of shares of common stock:

		Three and Nine Months Ended September 30, 2018			Three and Nine Months Ended September 30, 2017
Date of Award and Total Number of Underlying Shares		Return on Capital metric	Stockholder Return metric	Total	Return on Capital metric	Stockholder Return metric	Total
September 26, 2017
76,250 shares	(a)	33,524	38,125	71,649	38,125	—	38,125
July 1, 2018
76,250 shares	(b)	30,929	—	30,929	n/a	n/a	n/a
		64,453	38,125	102,578	38,125	—	38,125

(a)Includes shares that would be issued pursuant to the respective metrics, assuming the end of the quarterly period was the June 30, 2020 vesting date. None of the remaining 4,601 shares and 38,125 shares are included at September 30, 2018 and 2017, respectively, as the applicable metrics had not been met for these shares.

10

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 3 — Earnings Per Common Share (Continued)

(b)Includes shares that would be issued pursuant to the respective metrics, assuming the end of the quarterly period was the June 30, 2021 vesting date. None of the remaining 45,321 shares are included at September 30, 2018, as the applicable metrics had not been met for these shares.

In 2010, RSUs exchangeable for up to 200,000 shares of common stock were awarded pursuant to the 2009 Incentive Plan.  In June 2017, 113,584 of these shares vested and such shares were issued in August 2017.

See Note 14 for information regarding the Company’s equity incentive plans.

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 September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Numerator for basic and diluted earnings per share:
Net income	$	10,182		$	7,128		$	21,381		$	20,007
Less net income attributable to non-controlling interests	(35		)	(23		)	(866		)	(65		)
Less earnings allocated to unvested restricted stock (a)	(342		)	(263		)	(879		)	(796		)
Net income available for common stockholders: basic and diluted	$	9,805		$	6,842		$	19,636		$	19,146
Denominator for basic earnings per share:
Weighted average number of common shares	18,646			18,000			18,521			17,859
Effect of dilutive securities:
RSUs	59			79			41			102
Denominator for diluted earnings per share:
Weighted average number of shares	18,705			18,079			18,562			17,961
Earnings per common share, basic	$	.53		$	.38		$	1.06		$	1.07
Earnings per common share, diluted	$	.52		$	.38		$	1.06		$	1.07

(a)Represents an allocation of distributed earnings to unvested restricted stock which, as participating securities, are entitled to receive dividends.

11

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 4 — Real Estate Acquisitions

The following chart details the Company’s acquisitions of real estate during the nine months ended September 30, 2018 (amounts in thousands):

Description of Property	Date Acquired	Contract Purchase Price		Terms of Payment	Capitalized Third Party Real Estate Acquisition Costs
Campania International/U.S. Tape industrial facility,
Pennsburg, Pennsylvania	March 28, 2018	$	12,675	All cash (a)	$	227
Plymouth Industries industrial facility,
Plymouth, Minnesota	June 7, 2018	5,500		All cash (b)	50
Totals		$	18,175		$	277

(a)In July 2018, the Company obtained new mortgage debt of $8,238.

(b)In September 2018, the Company obtained new mortgage debt of $3,325.

The Company determined that with respect to each of these acquisitions, the gross assets acquired are concentrated in a single identifiable asset. Therefore, these transactions do not meet the definition of a business and are accounted for as asset acquisitions. As such, direct transaction costs associated with these asset acquisitions have been capitalized to real estate assets and depreciated over their respective useful lives.

The following chart details the allocation of the purchase price for the Company’s acquisitions of real estate during the nine months ended September 30, 2018 (amounts in thousands):

					Building
Description of Property	Land		Building		Improvements		Total
Campania International/U.S. Tape industrial facility,
Pennsburg, Pennsylvania	$	1,776	$	10,399	$	727	$	12,902
Plymouth Industries industrial facility,
Plymouth, Minnesota	1,121		4,306		123		5,550
Totals	$	2,897	$	14,705	$	850	$	18,452

Property Acquisitions Subsequent to September 30, 2018

On October 19, 2018, the Company acquired, in a sale-leaseback transaction, an industrial/office property, located in Englewood, Colorado for $12,800,000.  The initial term of the lease is twelve years.

On November 1, 2018, the Company acquired an industrial property, located in Moorestown, New Jersey for $7,350,000.  The initial term of the lease is 9.5 years.

12

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 5 — Sales of Properties

On January 1, 2018, the Company adopted ASU No. 2017-05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, using the modified retrospective transition method. As leasing is the Company’s primary activity, the Company determined that its sales of real estate, which are nonfinancial assets, are sold to noncustomers and fall within the scope of ASC 610-20.  The Company re-assessed and determined there were no open contracts or partial sales and as such, the adoption of this ASU did not (i) result in a cumulative adjustment as of January 1, 2018, and (ii) have any impact on the Company’s consolidated financial statements.

The following chart details the Company’s sales of real estate during the nine months ended September 30, 2018 and 2017 (amounts in thousands):

Description of Property	Date Sold	Gross Sales Price		Gain on Sale of Real Estate, Net
Retail property,
Fort Bend, Texas (a)	January 30, 2018	$	9,200	$	2,408
Land,
Lakemoor, Illinois	September 14, 2018	8,459		4,585		(b)
Totals — nine months ended September 30, 2018		$	17,659	$	6,993
Retail property,
Greenwood Village, Colorado	May 8, 2017	$	9,500	$	6,568
Retail property,
Kansas City, Missouri (c)	July 14, 2017	10,250		2,180
Retail property,
Niles, Illinois	August 31, 2017	5,000		1,089
Totals — nine months ended September 30, 2017		$	24,750	$	9,837

(a)This property was owned by a consolidated joint venture in which the Company held an 85% interest. The non-controlling interest’s share of the gain was $776.

(b)Includes $5,717, representing the unamortized balance of a $5,906 fixed rent payment which was received and recorded as deferred income in November 2017 and was to be included in rental income over the term of the lease.

(c)See Note 15 for information on the early termination of the interest rate swap derivative associated with the mortgage that was paid off on this property.

The Company determined it would recognize the full gain on the sales of the Fort Bend, Texas and Lakemoor, Illinois properties in accordance with ASC 610-20 as the Company has no (i) controlling financial interest in either of the properties and (ii) continuing interest or obligation with respect to the properties sold.

13

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 6 — Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures

Variable Interest Entities — Ground Leases

The Company determined that with respect to the properties identified in the table below, it has a variable interest through its ground leases and the two owner/operators (which are affiliated with one another) are VIEs because their equity investment at risk is insufficient to finance its activities without additional subordinated financial support. The Company further determined that it is not the primary beneficiary of these VIEs because the Company has shared power over certain activities that most significantly impact the owner/operator’s economic performance (i.e., shared rights on the sale of the property) and therefore, does not consolidate these VIEs for financial statement purposes. Accordingly, the Company accounts for these investments as land and the revenues from the ground leases as Rental income, net. Such rental income amounted to $925,000 and $2,872,000 for the three and nine months ended September 30, 2018, respectively, and $954,000 and $2,758,000 for the three and nine months ended September 30, 2017, respectively.  Included in these amounts is rental income from a previously held VIE property in Lakemoor, Illinois, which the Company sold in September 2018 (see Note 5), amounting to $214,000 and $800,000 for the three and nine months ended September 30, 2018, respectively, and $282,000 and $862,000 for the three and nine months ended September 30, 2017, respectively.

The following chart details the VIEs through the Company’s ground leases and the aggregate carrying amount and maximum exposure to loss as of September 30, 2018 (dollars in thousands):

Description of Property(a)	Date Acquired	Land Contract Purchase Price		# Units in Apartment Complex	Owner/ Operator Mortgage from Third Party(b)		Type of Exposure	Carrying Amount and Maximum Exposure to Loss
The Briarbrook Village Apartments,
Wheaton, Illinois	August 2, 2016	$	10,530	342	$	39,411	Land	$	10,536
The Vue Apartments,
Beachwood, Ohio	August 16, 2016	13,896		348	67,444		Land	13,901
Totals		$	24,426	690	$	106,855		$	24,437

(a)Simultaneously with each purchase, the Company entered into a triple net ground lease with affiliates of Strategic Properties of North America, the owner/operators of these properties.

(b)Simultaneously with the closing of each acquisition, the owner/operator obtained a mortgage from a third party which, together with the Company’s purchase of the land, provided substantially all of the funds to acquire the complex. The Company provided its land as collateral for the respective owner/operator’s mortgage loans; accordingly, each land position is subordinated to the applicable mortgage. No other financial support has been provided by the Company to the owner/operator.

Pursuant to the terms of the ground lease for the Wheaton, Illinois property, the owner/operator is obligated to make certain unit renovations as and when units become vacant. Cash reserves to cover such renovation work, received by the Company in conjunction with the purchase of the property, are disbursed when the unit renovations are completed. The related cash reserve balance for this property was $379,000 and $443,000 at September 30, 2018 and December 31, 2017, respectively, and is classified as Restricted cash on the consolidated balance sheets.

14

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 6 — Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures (Continued)

Variable Interest Entity — Consolidated Joint Ventures

With respect to the five consolidated joint ventures in which the Company holds between a 90% to 95% interest, the Company has determined such ventures are VIEs because the non-controlling interests do not hold substantive kick-out or participating rights.

In each of these consolidated joint ventures, the Company has determined it is the primary beneficiary of the VIE as it has the power to direct the activities that most significantly impact each joint venture’s performance including management, approval of expenditures, and the obligation to absorb the losses or rights to receive benefits.  Accordingly, the Company consolidates the operations of these joint ventures for financial statement purposes.  The joint ventures’ creditors do not have recourse to the assets of the Company other than those held by these joint ventures.

The following is a summary of the consolidated VIEs’ carrying amounts and classification in the Company’s consolidated balance sheets, none of which are restricted (amounts in thousands):

	September 30, 2018		December 31, 2017 (a)
Land	$	14,722	$	17,844
Buildings and improvements, net of accumulated depreciation of $3,867 and $3,811, respectively	27,893		31,789
Cash	902		1,145
Unbilled rent receivable	1,196		1,011
Unamortized intangible lease assets, net	932		1,241
Escrow, deposits and other assets and receivables	878		948
Mortgages payable, net of unamortized deferred financing costs of $407 and $442, respectively	27,143		32,252
Accrued expenses and other liabilities	689		870
Unamortized intangible lease liabilities, net	1,770		2,015
Accumulated other comprehensive income (loss)	117		(1		)
Non-controlling interests in consolidated joint ventures	1,439		1,742

(a)Includes a consolidated joint venture, in which the Company held an 85% interest, located in Fort Bend, Texas which was sold in January 2018 (see Note 5).

At September 30, 2018 and December 31, 2017, MCB Real Estate, LLC and its affiliates (‘‘MCB’’) are the Company’s joint venture partner in four consolidated joint ventures in which the Company has aggregate equity investments of approximately $9,859,000 and $9,705,000, respectively.

15

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 6 — Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures (Continued)

Distributions to each joint venture partner are determined pursuant to the applicable operating agreement and may not be pro rata to the equity interest each partner has in the applicable venture.

Note 7 — Investment in Unconsolidated Joint Ventures

On July 31, 2018, an unconsolidated joint venture sold its property located in Milwaukee, Wisconsin for $12,813,000, net of closing costs, and paid off the related $6,970,000 mortgage. The Company’s 50% share of the gain from this sale was $1,986,000, which is included in Equity in earnings from sale of unconsolidated joint venture properties on the consolidated statements of income for the three and nine months ended September 30, 2018.

On April 5, 2018, an unconsolidated joint venture sold its building and a portion of its land, located in Savannah, Georgia for $2,600,000, net of closing costs. The Company’s 50% share of the gain from this sale was $71,000, which is included in Equity in earnings from sale of unconsolidated joint venture properties on the consolidated statement of income for the nine months ended September 30, 2018. The unconsolidated joint venture retained approximately five acres of land at this property.

The Company’s remaining four unconsolidated joint ventures each own and operate one property.  At September 30, 2018 and December 31, 2017, the Company’s equity investment in unconsolidated joint ventures totaled $10,283,000 and $10,723,000, respectively.  In addition to the equity in earnings from the sale of properties of $2,057,000 in 2018, the Company recorded equity in earnings of $173,000 and $716,000 for the three and nine months ended September 30, 2018, respectively, and $212,000 and $663,000 for the three and nine months ended September 30, 2017, respectively.  Included in equity in earnings from unconsolidated joint ventures for the nine months ended September 30, 2018 is income of $110,000 related to the discontinuance of hedge accounting on a mortgage swap related to the unconsolidated joint venture property, located in Milwaukee, Wisconsin, that was sold in July 2018 (see above and Note 15).

At September 30, 2018, MCB is the Company’s joint venture partner in one of these unconsolidated joint ventures in which the Company has an equity investment of $8,534,000.

16

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 8 — Lease Termination Fee

In July 2018, the Company received a $372,000 lease termination fee from a retail tenant in a lease buy-out transaction.  In addition, the Company recorded $804,000 as rental income, representing the write-off of the $878,000 balance of the unamortized intangible lease liability, offset in part by the write-off of the $74,000 balance of the unbilled rent receivable related to this tenant.  The Company re-leased this property simultaneously with the termination of the lease.

Note 9 — Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of a tenant to make required rent and other payments.  If the financial condition of a specific tenant were to deteriorate, adversely impacting its ability to make payments, allowances may be required.  At September 30, 2018, due to the uncertainty with respect to the collection of the unbilled rent receivable related to a property located in Texas, the Company recorded an allowance of $1,440,000, as a reduction to rental income, representing the entire balance of such receivable. There was no balance in allowance for doubtful accounts at December 31, 2017.

The Company records bad debt expense as a reduction of rental income and/or tenant reimbursements. There was no bad debt expense in the three and nine months ended September 30, 2018.  During the nine months ended September 30, 2017, the Company recorded bad debt expense of $310,000, related to rental income and tenant reimbursements due from former tenants that filed for Chapter 11 bankruptcy protection.  In connection with these tenants, the Company wrote-off (i) $362,000 of unbilled rent receivable and $67,000 of unamortized intangible lease assets as a reduction to rental income and (ii) $884,000 of tenant origination costs as an increase to depreciation expense.

Impairment Loss

In November 2017, the Company sold its property formerly tenanted by Joe’s Crab Shack, located in Ann Arbor, Michigan. As the sales price was less than the net book value, the Company determined that the property was impaired and recorded an impairment loss of $153,000, representing the difference, at September 30, 2017, between the net sales price and the net book value. The impairment loss is included in the accompanying consolidated statements of income for the three and nine months ended September 30, 2017.

17

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 10 — Debt Obligations

Mortgages Payable

The following table details the Mortgages payable, net, balances per the consolidated balance sheets (amounts in thousands):

	September 30, 2018			December 31, 2017
Mortgages payable, gross	$	407,007		$	396,946
Unamortized deferred financing costs	(4,029		)	(3,789		)
Mortgages payable, net	$	402,978		$	393,157

Line of Credit

The Company has a credit facility with Manufacturers & Traders Trust Company, People’s United Bank, VNB New York, LLC, and Bank Leumi USA, pursuant to which the Company may borrow up to $100,000,000, subject to borrowing base requirements.  The facility, which matures December 31, 2019, provides that the Company pay an interest rate equal to the one month LIBOR rate plus an applicable margin ranging from 175 basis points to 300 basis points depending on the ratio of the Company’s total debt to total value, as determined pursuant to the facility.  At September 30, 2018 and 2017, the applicable margin was 175 basis points.  An unused facility fee of .25% per annum applies to the facility.  The average interest rate on the facility was approximately 3.62% and 2.83% for the nine months ended September 30, 2018 and 2017, respectively.  The Company was in compliance with all covenants at September 30, 2018.

The following table details the Line of credit, net, balances per the consolidated balance sheets (amounts in thousands):

	September 30, 2018 (a)		December 31, 2017
Line of credit, gross	$	—	$	9,400
Unamortized deferred financing costs	—		(624		)
Line of credit, net	$	—	$	8,776

(a)In accordance with ASU 2015-15, as there was no balance outstanding on the Line of credit, the Company reclassified the related unamortized deferred financing costs of $390 to Escrow, deposits, and other assets and receivables on the consolidated balance sheet at September 30, 2018.

At November  2, 2018, there was an outstanding balance of $4,000,000 (before unamortized deferred financing costs) under the facility.

18

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 11 — Related Party Transactions

Compensation and Services Agreement

Pursuant to the compensation and services agreement with Majestic Property Management Corp. (“Majestic”), the Company pays fees to Majestic and Majestic provides to the Company the services of all affiliated executive, administrative, legal, accounting, clerical and property management personnel, as well as property acquisition, sale and lease consulting and brokerage services, consulting services with respect to mortgage financings and construction supervisory services. Majestic is wholly-owned by the Company’s vice-chairman and certain of the Company’s executive officers are officers of, and are compensated by, Majestic. The fee the Company pays Majestic is negotiated each year by Majestic and the Compensation and/or Audit Committees of the Company’s Board of Directors, and is approved by such committees and the independent directors.

In consideration for the services described above, the Company paid Majestic $687,000 and $2,054,000 for the three and nine months ended September 30, 2018, respectively, and $667,000 and $1,996,000 for the three and nine months ended September 30, 2017, respectively.  Included in these fees are $307,000 and $915,000 of property management costs for the three and nine months ended September 30, 2018, respectively, and $287,000 and $857,000 for the three and nine months ended September 30, 2017, respectively.  The property management fee portion of the compensation and services agreement is paid based on 1.5% and 2.0% of the rental payments (including tenant reimbursements) actually received by the Company from net lease tenants and operating lease tenants, respectively. The Company does not pay Majestic property management fees with respect to properties managed by third parties. Majestic credits against the fees due to it under the compensation and services agreement any management or other fees received by it from any joint venture in which the Company is a joint venture partner. The compensation and services agreement also provides for an additional payment to Majestic of $54,000 and $162,000 in each of the three and nine months ended September 30, 2018 and 2017, respectively, for the Company’s share of all direct office expenses, including rent, telephone, postage, computer services, internet usage and supplies. The Company does not pay any fees or expenses to Majestic for such services except for the fees described in this paragraph.

Executive officers and others providing services to the Company under the compensation and services agreement were awarded shares of restricted stock and RSUs under the Company’s stock incentive plans (described in Note 14). The related expense charged to the Company’s operations was $483,000 and $1,332,000 for the three and nine months ended September 30, 2018, respectively, and $361,000 and $1,128,000 for the three and nine months ended September 30, 2017, respectively.

The fees paid under the compensation and services agreement (except for the property management fees which are included in Real estate expenses) and the costs of the stock incentive plans are included in General and administrative expense on the consolidated statements of income for the three and nine months ended September 30, 2018 and 2017.

19

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 11 — Related Party Transactions (Continued)

Joint Venture Partners and Affiliates

The Company paid an aggregate of $21,000 and $86,000 for the three and nine months ended September 30, 2018, respectively, and $30,000 and $112,000 for the three and nine months ended September 30, 2017, respectively, to its consolidated joint venture partners or their affiliates (none of whom are officers, directors or employees of the Company) for property management fees, which are included in Real estate expenses on the consolidated statements of income.

The Company’s unconsolidated joint ventures paid management fees of $39,000 and $135,000 for the three and nine months ended September 30, 2018, respectively, and $45,000 and $132,000 for the three and nine months ended September 30, 2017, respectively, to the other partner of the venture, which reduced Equity in earnings of $19,000 and $67,000 for the three and nine months ended September 30, 2018, respectively, and $22,000 and $66,000 for the three and nine months ended September 30, 2017, respectively.

Other

During 2018 and 2017, the Company paid quarterly fees of $69,000 to the Company’s chairman and $27,500 to the Company’s vice-chairman. These fees are included in General and administrative expenses on the consolidated statements of income.

The Company obtains its property insurance in conjunction with Gould Investors L.P. (“Gould Investors”), a related party, and reimburses Gould Investors annually for the Company’s insurance cost relating to its properties.  Amounts reimbursed to Gould Investors were $912,000 during the three and nine months ended September 30, 2018 and $782,000 during the three and nine months ended September 30, 2017.  Included in Real estate expenses on the consolidated statements of income is insurance expense of $241,000 and $646,000 for the three and nine months ended September 30, 2018, respectively, and $204,000 and $551,000 for the three and nine months ended September 30, 2017, respectively.  The balance of the amounts reimbursed to Gould Investors represents prepaid insurance at September 30, 2018 and is included in Other assets on the consolidated balance sheets.

20

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 12 — Common Stock Cash Dividend

On September 13, 2018, the Board of Directors declared a quarterly cash dividend of $.45 per share on the Company’s common stock, totaling $8,694,000. The quarterly dividend was paid on October 4, 2018 to stockholders of record on September 25, 2018.

Note 13 — Shares Issued through Equity Offering Program

During the nine months ended September 30, 2018, the Company sold 126,300 shares for proceeds of $3,245,000, net of commissions of $33,000, and incurred offering costs of $75,000 for professional fees.

Note 14 — Stock Based Compensation

The Company’s 2016 Incentive Plan (‘‘Plan’’), approved by the Company’s stockholders in June 2016, permits the Company to grant, among other things, stock options, restricted stock,  RSUs, performance share awards and dividend equivalent rights and any one or more of the foregoing to its employees, officers, directors and consultants. A maximum of 750,000 shares of the Company’s common stock is authorized for issuance pursuant to this Plan.  As of September 30, 2018, (i) restricted stock awards with respect to 284,850 shares had been issued, of which 300 shares were forfeited and 3,000 shares had vested, and (ii) as further described below, RSUs with respect to 152,500 shares had been issued and are outstanding.

Under the Company’s 2012 Incentive Plan, as of September 30, 2018, 500,700 shares had been issued, of which 3,550 shares were forfeited and 127,450 shares had vested. No additional awards may be granted under this plan.

For accounting purposes, the restricted stock is not included in the shares shown as outstanding on the balance sheet until they vest; however, dividends are paid on the unvested shares. The restricted stock grants are charged to General and administrative expense over the respective vesting periods based on the market value of the common stock on the grant date. Unless earlier forfeited because the participant’s relationship with the Company terminated, unvested restricted stock awards vest on the fifth anniversary of the grant date, and under certain circumstances may vest earlier.

In each of 2017 and 2018, the Company granted RSUs exchangeable for up to 76,250 shares of common stock upon satisfaction, through June 30, 2020 and June 30, 2021, respectively, of specified conditions.  Specifically, up to 50% of these RSUs vest upon achievement of metrics related to average annual total stockholder return (the “TSR Awards”), which metrics meet the definition of a market condition, and up to 50% vest upon achievement of metrics related to average annual return on capital (the “ROC Awards”), which metrics meet the definition of a performance condition.  The holders of the RSUs are not entitled to dividends or to vote the underlying shares until such RSUs vest and shares are issued. Accordingly, the shares underlying these RSUs are not

21

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 14 — Stock Based Compensation (Continued)

included in the shares shown as outstanding on the balance sheet. For the TSR awards, a third party appraiser prepared a Monte Carlo simulation pricing model to determine the fair value, which is recognized ratably over the service period. The Monte Carlo valuation consisted of computing the grant date fair value of the awards using the Company’s simulated stock price. For the July 2018 TSR awards, the per unit or share fair value was estimated using the following assumptions: an expected life of three years, a dividend rate of 6.82%, a risk-free interest rate of 2.18% - 2.70% and an expected price volatility of 22.29% - 25.99%. The expected price volatility was calculated based on historical and implied volatility. For the ROC Awards, the fair value is based on the market value on the date of grant and the performance assumptions are re-evaluated quarterly. Expense is not recognized on the RSUs which the Company does not expect to vest as a result of service conditions or the Company’s performance expectations.

As of September 30, 2018, based on performance and market assumptions, the fair value of the RSUs granted in 2017 and 2018 is $1,066,000 and $1,136,000, respectively. Recognition of such deferred compensation expense will be charged to General and administrative expense over the respective three year performance cycle.  None of these RSUs were forfeited or vested during the nine months ended September 30, 2018.

In 2010, RSUs exchangeable for up to 200,000 shares of common stock were awarded pursuant to the Company’s 2009 Incentive Plan. The holders of RSUs were not entitled to dividends or to vote the underlying shares until the RSUs vested and the underlying shares were issued. During 2017, 113,584 shares of common stock underlying the RSUs were deemed to have vested and were issued.  RSUs with respect to the balance of 86,416 shares were forfeited.

22

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 14 — Stock Based Compensation (Continued)

The following is a summary of the activity of the equity incentive plans:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2018			2017		2018			2017
Restricted stock grants:
Number of shares	—			—		144,750			140,100
Average per share grant price	—			—		$	25.31		$	24.75
Deferred compensation to be recognized over vesting period	—			—		$	3,664,000		$	3,467,000
Number of non-vested shares:
Non-vested beginning of period	651,500			612,900		612,900			591,750
Grants	—			—		144,750			140,100
Vested during period	—			—		(106,000		)	(118,450		)
Forfeitures	(250		)	—		(400		)	(500		)
Non-vested end of period	651,250			612,900		651,250			612,900
RSU grants:
Number of underlying shares	76,250			76,250		76,250			76,250
Average per share grant price	$	26.41		$	24.03	$	26.41		$	24.03
Deferred compensation to be recognized over vesting period	$	1,136,000		$	919,000	$	1,136,000		$	919,000
Number of non-vested shares:
Non-vested beginning of period	76,250			—		76,250			200,000
Grants	76,250			76,250		76,250			76,250
Vested during period	—			—		—			(113,584		)
Forfeitures	—			—		—			(86,416		)
Non-vested end of period	152,500			76,250		152,500			76,250
Restricted stock and RSU grants:
Weighted average per share value of non-vested shares (based on grant price)	$	23.83		$	22.89	$	23.83		$	22.89
Value of stock vested during the period (based on grant price)	$	—		$	—	$	2,289,000		$	3,008,000
Weighted average per share value of shares forfeited during the period (based on grant price)	$	23.39		$	—	$	23.59		$	8.37
The total charge to operations:
Outstanding restricted stock grants	$	763,000		$	684,000	$	2,263,000		$	2,255,000
Outstanding RSUs	208,000			—		390,000			86,000
Total charge to operations	$	971,000		$	684,000	$	2,653,000		$	2,341,000

As of September 30, 2018, total compensation costs of $7,581,000 and $1,717,000 related to non-vested restricted stock awards and RSUs, respectively, have not yet been recognized.  These compensation costs will be charged to General and administrative expense over the remaining respective vesting periods. The weighted average vesting period is 2.4 years for the restricted stock and 2.3 years for the RSUs.

23

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 15 — 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 (excluding interest rate swaps), dividends payable, and accrued expenses and other liabilities (excluding interest rate swaps), are not measured at fair value on a recurring basis, but are considered to be recorded at amounts that approximate fair value.

At September 30, 2018, the $392,836,000 estimated fair value of the Company’s mortgages payable is less than their $407,007,000 carrying value (before unamortized deferred financing costs) by approximately $14,171,000 assuming a blended market interest rate of 4.90% based on the 8.5 year weighted average remaining term to maturity of the mortgages.  At December 31, 2017, the $397,103,000 estimated fair value of the Company’s mortgages payable is greater than their $396,946,000 carrying value (before unamortized deferred financing costs) by approximately $157,000 assuming a blended market interest rate of 4.25% based on the 8.7 year weighted average remaining term to maturity of the mortgages.

At September 30, 2018 and December 31, 2017, the carrying amount of the Company’s line of credit (before unamortized deferred financing costs) of $0 and $9,400,000, respectively, 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.

24

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 15 — Fair Value Measurements (Continued)

Fair Value on a Recurring Basis

The fair value of the Company’s derivative financial instruments, using Level 2 inputs, was determined to be the following (amounts in thousands):

	As of	Carrying and Fair Value
Financial assets:
Interest rate swaps	September 30, 2018	$	4,793
	December 31, 2017	1,615
Financial liabilities:
Interest rate swaps	September 30, 2018	$	—
	December 31, 2017	1,492

The Company does not own any financial instruments that are measured on a recurring basis and that are classified as Level 1 or 3.

The Company’s objective in using interest rate swaps is to add stability to interest expense. The Company does not use derivatives for trading or speculative purposes.

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 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 September 30, 2018, the Company has assessed and determined the impact of the credit valuation adjustments on the overall valuation of its derivative positions is not significant. As a result, the Company determined its derivative valuation is classified in Level 2 of the fair value hierarchy.

As of September 30, 2018, the Company had entered into 28 interest rate derivatives, all of which were interest rate swaps, related to 28 outstanding mortgage loans with an aggregate $130,100,000 notional amount and mature between 2019 and 2028 (weighted average remaining term to maturity of 6.4 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 3.02% to 5.38% and a weighted average interest rate of 4.13% at September 30, 2018).  The fair values of the Company’s derivatives in asset and liability positions are reflected as other assets or other liabilities on the consolidated balance sheets.

In connection with the sale of two unconsolidated joint venture properties located in Savannah, Georgia and Milwaukee, Wisconsin, the Company terminated two interest rate swaps when the related mortgages were paid off in April 2018 and July 2018, respectively (see Note 7). See discussion below for the discontinuation of hedge accounting on one of these interest rate swaps during the nine months ended September 30, 2018.

25

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 15 — Fair Value Measurements (Continued)

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
One Liberty Properties, Inc. and Consolidated subsidiaries
Amount of gain (loss) recognized on derivatives in Other comprehensive income	$	827		$	(248	)	$	4,336		$	(1,234	)
Amount of reclassification from Accumulated other comprehensive income into Interest expense	(44		)	(352		)	(335		)	(1,406		)
Unconsolidated Joint Ventures (Company’s share)
Amount of gain (loss) recognized on derivatives in Other comprehensive income	$	—		$	(2	)	$	69		$	(14	)
Amount of reclassification from Accumulated other comprehensive income into Equity in earnings of unconsolidated joint ventures	—			(13		)	103			(48		)

During the nine months ended September 30, 2018 and 2017, the Company (including one of its unconsolidated joint ventures) discontinued hedge accounting on two interest rate swaps as the forecasted hedged transactions were no longer probable of occurring. As a result, during the nine months ended September 30, 2018 and 2017, the Company reclassified $110,000 and $118,000 of realized gain and loss, respectively, from Accumulated other comprehensive income to earnings.  No gain or loss was recognized with respect to amounts excluded from effectiveness testing on the Company’s cash flow hedges for the three and nine months ended September 30, 2018 and 2017.

During the twelve months ending September 30, 2019, the Company estimates an additional $503,000 will be reclassified from other Accumulated other comprehensive income as a decrease to Interest expense.

The derivative agreements in effect at September 30, 2018 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 the derivative agreements and if there is a default by the subsidiary on the loan subject to the derivative agreement to which the Company is a party and if there are swap breakage losses on account of the derivative being terminated early, then the Company could be held liable for such swap breakage losses, if any.

As of December 31, 2017, the fair value of the derivatives in a liability position, including accrued interest of $53,000, but excluding any adjustments for nonperformance risk, was approximately $1,638,000.  In the event the Company had breached any of the contractual provisions of the derivative contracts, it would have been required to settle its obligations thereunder at their termination liability value of $1,638,000.  This termination liability value, net of adjustments for nonperformance risk of $93,000, is included in Accrued expenses and other liabilities on the consolidated balance sheet at December 31, 2017.  At September 30, 2018, there were no derivatives in a liability position.

26

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 16 — Commitments

As of September 30, 2018, the remaining amount the Company is contractually required to expend for building expansion and improvements at its property tenanted by L-3 Technologies, located in Hauppauge, New York, is approximately $960,000.

Note 17 — New Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements.  The Company is evaluating the new guidance to determine if, and to the extent, it will impact the Company’s consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments made to non-employees so that the accounting for such payments is substantially the same as those made to employees, with certain exceptions. Under this ASU, equity-classified share-based awards to non-employees will be measured at fair value on the grant date of the awards and entities will assess the probability of satisfying performance conditions if any are present.  Awards will continue to be classified according to ASC 718 upon vesting which eliminates the need to reassess classification upon vesting, consistent with awards granted to employees, unless the award is modified after the service has been rendered, any other conditions necessary to earn the right to benefit from the instruments have been satisfied, and the nonemployee is no longer providing services. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. The Company early adopted this guidance on July 1, 2018 using the modified retrospective transition method. The adoption of ASU 2018-07 did not have an impact on the Company’s consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which amends the presentation and disclosure requirements for hedge accounting and changes how companies assess hedge effectiveness. This ASU is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs.  The Company early adopted this guidance on January 1, 2018 using the modified retrospective transition method and its adoption did not have any impact on the Company’s previously reported income from operations, net income or accumulated undistributed net income for the periods presented.

27

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 17 — New Accounting Pronouncements (Continued)

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes how  entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current “incurred loss” model with an “expected loss” approach. The guidance is effective for fiscal years, and interim periods within those fiscal years,  beginning after December 15, 2019. Early adoption is permitted after December 2018. The Company is evaluating the new guidance to determine if, and to the extent, it will impact the consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases, and in July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842), Targeted Improvements, and 2018-10, Codification Improvements to Topic 842, Leases.  These standards require lessees to recognize (i) lease assets and lease liabilities for those leases which were previously classified as operating leases under ASC 840, Leases, and (ii) expense based on the effective interest method for finance leases or on a straight-line basis for operating leases.  Lessor accounting, inclusive of the effect of a practical expedient offered in ASU No. 2018-11 (which the Company expects to adopt and apply to most of its leases), which allows lessors to not separate non-lease components from the related lease components under certain conditions, will remain largely unchanged as under the previous standard, ASC 840. The Company is currently evaluating these new standards but does not expect them to have a significant effect on its consolidated financial statements. The effective date of these standards will be fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and early adoption is permitted. The Company will adopt these standards effective as of January 1, 2019 using the modified retrospective approach and anticipates electing the package of practical expedients that allows an entity to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The new model requires revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. In July 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU No. 2014-09 by one year. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations.  ASU No. 2014-09, ASU No. 2015-14 and ASU No. 2016-08 are herein collectively referred to as the “New Revenue Recognition Standards”. The Company adopted the New Revenue Recognition Standards on January 1, 2018 using the modified retrospective transition method.  The Company’s main

28

One Liberty Properties, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

September 30, 2018 (Continued)

Note 17 — New Accounting Pronouncements (Continued)

revenue streams are rental revenues and tenant reimbursements.  Such revenues are related to lease contracts with tenants which currently fall within the scope of ASC Topic 840, and will fall within the scope of ASC Topic 842 upon the adoption of ASU No. 2016-02 on January 1, 2019 (the Company’s sales of real estate are within the scope of ASU No. 2017-05, see Note 5).  Accordingly, the adoption of the New Revenue Recognition Standards did not (i) result in a cumulative adjustment as of January 1, 2018, and (ii) have any impact on the Company’s consolidated financial statements.

Note 18 — Subsequent Events

Subsequent events have been evaluated and except as disclosed herein, there were no other events relative to the consolidated financial statements that require additional disclosure.

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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, 2017 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, or REIT, incorporated in Maryland in 1982.  To qualify as a REIT, under the Internal Revenue Code of 1986, as amended, we must meet a number of organizational and operational requirements, including a requirement that we distribute currently at least 90% of ordinary taxable income to our stockholders.  We intend to comply with these requirements and to maintain our REIT status.

We acquire, own and manage a geographically diversified portfolio consisting primarily of industrial, retail (including furniture stores and supermarkets), restaurant, health and fitness and theater properties, many of which are subject to long-term net leases.  As of September 30, 2018, we own 118 properties (including five properties owned by consolidated joint ventures and four properties owned by unconsolidated joint ventures) located in 30 states.  Based on square footage, our occupancy rate at September 30, 2018 is approximately 98.9%.

We face a variety of risks and challenges in our business. Among other things, we face the possibility that 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 or otherwise terminating.

We seek to manage the risk of our real property portfolio and the related financing arrangements by diversifying among types of properties, industries, locations, tenants, scheduled lease expirations, mortgage maturities and lenders, and by seeking to minimize our exposure to interest rate fluctuations.  Substantially all of our mortgage debt either bears interest at fixed rates or is subject to interest rate swaps, limiting our exposure to fluctuating interest rates on our outstanding mortgage debt.

30

We monitor the risk of tenant non-payments through a variety of approaches tailored to the applicable situation. Generally, based on our assessment of the credit risk posed by our tenants, we monitor a tenant’s financial condition through one or more of the following actions: reviewing tenant financial statements or other financial information, obtaining other tenant related information, regular contact with tenant’s representatives, tenant credit checks and regular management reviews of our tenants. We may sell a property if the tenant’s financial condition is unsatisfactory.

In acquiring properties, we balance an evaluation of the terms of the leases and the credit of the existing tenants with a fundamental analysis of the real estate to be acquired, which analysis takes into account, among other things, the estimated value of the property, local demographics and the ability to re-rent or dispose of the property on favorable terms upon lease expiration or early termination.

We are sensitive to the risks facing the retail industry as a result of the growth of e-commerce. We are addressing our exposure to the retail industry by seeking to acquire industrial properties that we believe capitalize on e-commerce activities, such as e-commerce distribution and warehousing facilities, and by being especially selective in acquiring retail properties.  Approximately 38.6% of our contractual rental income (as described below) is derived from retail tenants (including 8.9%, 4.2% and 3.2% from tenants engaged in retail furniture, supermarkets and office supply activities, respectively) and 39.7%, 4.9%, 4.5%, 4.3%, 3.2% and 4.8% from industrial (e.g., distribution and warehouse facilities), restaurant, health and fitness, residential ground leases, theaters and other properties, respectively.

Our 2018 contractual rental income is approximately $69.0 million and represents, after giving effect to any abatements, concessions or adjustments, the base rent payable to us during the twelve months ending September 30, 2019 under leases in effect at September 30, 2018. Contractual rental income includes approximately $1.7 million relating to a property at which we and the tenant are negotiating a lease amendment to effect, among other things, a rent reduction, $2.1 million relating to a property at which we took a $1.4 million allowance against the unbilled rent receivable, and $522,000 relating to our Kmart, Clemmons, North Carolina property.  See “…Challenges Facing Certain Tenants”.  Contractual rental income excludes: (i) approximately $486,000 of straight-line rent and $1.0 million of amortization of intangibles; and (ii) our share of the rental income payable to our unconsolidated joint ventures, which is approximately $1.6 million.

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The following table sets forth scheduled expirations of leases for our properties as of September 30, 2018 for the periods indicated below:

Lease Expiration (1) 12 Months Ending September 30,	Number of Expiring Leases	Approximate Square Footage Subject to Expiring Leases (2)	Contractual Rental Income Under Expiring Leases		Percentage of Contractual Rental Income Represented by Expiring Leases
2019	13	321,206	$	1,304,006	1.9
2020	8	109,134	1,606,021		2.3
2021	17	454,522	3,589,325		5.2
2022	22	2,141,919	13,923,753		20.2
2023	17	680,871	4,524,633		6.6
2024	13	602,282	5,569,107		8.1
2025	8	438,032	4,661,941		6.8
2026	8	230,189	3,523,673		5.1
2027	11	885,096	7,492,009		10.8
2028	9	677,871	4,290,618		6.2
2029 and thereafter	25	2,763,527	18,539,791		26.8
	151	9,304,649	$	69,024,877	100.0

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

(2)Excludes an aggregate of 67,891 square feet of vacant space.

Challenges Facing Certain Tenants

Three tenants at properties located in Texas, Ohio and North Carolina advised us that they are experiencing financial difficulties.

The property in Texas accounted for $2.2 million, or 3.2%, of rental income for the year ended December 31, 2017 and accounts for $2.1 million or 3.0% of 2018 contractual rental income. Although this tenant (i) paid all the rent due to us through October 31 and (ii) advised that it and its affiliates are taking various actions to improve their operations, liquidity and capital resource position, during the three and nine months ended September 30, 2018, we recorded a $1.4 million allowance against rental income, representing the entire balance of this tenant’s unbilled rent receivable.  At September 30, 2018, the net book value, tenant origination costs and mortgage debt associated with this property was $16.2 million, $2.8 million and $ 13.6 million, respectively.

The owner/operator of a multi-family complex which ground leases from us the underlying land located in Beachwood, Ohio, has not made any rent payments subsequent to its September 2018 rent payment. We and the owner/operator are discussing a lease amendment, among other things, to effect a rent reduction and provide for the payment of a certain amount of rent into an escrow as additional security.  This property accounted for $1.5 million, or 2.2%, of rental income for the year ended December 31, 2017 and $1.7 million, or 2.5% of 2018 contractual rental income; there are no unbilled rent receivables, intangibles or tenant origination costs associated with this property.  At September 30, 2018, the net book value of our land subject to this ground lease is $13.9 million and is subordinate to $67.4 million of mortgage debt incurred by this tenant.

Kmart Corp has filed for bankruptcy protection. Our Kmart property located in Clemmons, North Carolina, accounted for $601,000, or 0.9% of rental income for the year ended December 31, 2017, $522,000 or 0.8% of 2018 contractual rental income and at September 30, 2018, the net book value, intangible lease liability and mortgage debt associated with this property was $5.2 million, $1.1 million and $1.9 million, respectively. There are no tenant origination costs or unbilled rent receivables associated with this property. Though Kmart has sought through bankruptcy proceedings to reject a significant number of its leases, several months prior to its bankruptcy filing, it renewed this lease through 2023 and has not taken action to reject this lease.

We may be adversely affected if, among other things, (i) any of these tenants reduce, defer, or do not pay the rent payments due us, (ii) if  the owner/operator of the multi-family complex fails to pay required mortgage payments when due, (iii) we sell our interest in any of these properties, (iv) our interests in these properties are foreclosed upon, or (v) we are required to take write—offs or impairment charges with respect to these properties.

Property Transactions During the Three Months Ended September 30, 2018

On September 14, 2018, we sold a land parcel located in Lakemoor, Illinois, which was ground leased to the owner/operators of the multi-family complex located on this parcel. Our gain from this sale was $4.6 million.  See Note 5 to the Consolidated Financial Statements. Rental income from this property was $585,000 for the six months ended June 30, 2018. There were no expenses related to this property.

On July 31, 2018, an unconsolidated joint venture sold its property located in Milwaukee, Wisconsin for $12.8 million, net of closing costs.  Our 50% share of the gain from this sale was $2.0 million.  In connection with the sale of this property, the joint venture repaid its $7.0 million mortgage. This joint venture accounted for $291,000 of our Equity in earnings of unconsolidated joint ventures during the six months ended June 30, 2018, which includes swap termination income of $110,000 related to the discontinuance of hedge accounting on a mortgage swap that was paid off in connection with the property sale.

Property Transactions Subsequent to September 30, 2018

On October 19, 2018, we acquired, in a sale-leaseback transaction, an industrial/office property, located in Englewood, Colorado for $12.8 million.  The initial term of the lease is twelve years and our annual rental income from this property will be approximately $1.1 million.

On November 1, 2018, we acquired an industrial property, located in Moorestown, New Jersey for $7.4 million.  The initial term of the lease is 9.5 years and our annual base rent from this property will be approximately $531,000 in 2019, increasing annually, beginning in 2020, by $16,000.

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Results of Operations

Revenues

The following table compares revenues for the periods indicated:

	Three Months EndedSeptember 30,				Increase			%		Nine Months EndedSeptember 30,				Increase		%
(Dollars in thousands)	2018		2017		(Decrease)			Change		2018		2017		(Decrease)		Change
Revenues:
Rental income, net	$	17,193	$	17,217	$	(24	)	(0.1	)	$	52,501	$	50,770	$	1,731	3.4
Tenant reimbursements	2,005		1,920		85			4.4		5,983		5,252		731		13.9
Lease termination fee	372		—		372			n/a		372		—		372		n/a
Total revenues	$	19,570	$	19,137	$	433		2.3		$	58,856	$	56,022	$	2,834	5.1

Rental income, net.   The variances for the three and nine months are due to changes in rental income at same store properties (i.e., properties that were owned for the entirety of the periods being presented) and the net increase in rental income from properties acquired and disposed of in 2017 and 2018.

During the three months ended September 30, 2018, same store properties decreased $220,000, primarily due to the $1.4 million non-cash allowance against rental income of the entire unbilled rent receivable balance related to our Texas property.  See “…Challenges Facing Certain Tenants”.  This decrease was offset by increases of (i) $804,000 due to the non-cash write-off to rental income of a lease intangible liability related to the Savers’ Buyout described below and (ii) $217,000 due to the tenanting of two properties that were vacant in the corresponding prior year period.

During the nine months ended September 30, 2018, same store properties contributed $353,000 to the increase, including net increases of (i) $804,000 due to the Savers’ Buyout write-off and (ii) $683,000 due to the tenanting of two vacant properties. These increases were offset by the $1.4 million non-cash allowance related to our Texas property.

The three and nine months ended September 30, 2018 reflect increases of $356,000 and $636,000, respectively, generated by two properties acquired in 2018, and $157,000 and $1.6 million, respectively, generated by four properties acquired in 2017.  Offsetting the increases from acquisitions were decreases of $317,000 and $887,000, respectively, for the three and nine months ending September 30, 2018, representing the 2017 rental income from properties sold during 2018 and 2017.

Tenant reimbursements.  Real estate tax and operating expense reimbursements increased during the three and nine months ended September 30, 2018 due primarily to reimbursements of (i) $122,000 and $516,000, respectively, from several same store properties and (ii) $38,000 and $433,000, respectively, from properties acquired in 2018 and 2017. Offsetting the increases during the three and nine months ended September 30, 2018 are decreases of $76,000 and $219,000, respectively, representing tenant reimbursements in 2017 from the Fort Bend, Texas property sold in January 2018.  Tenant reimbursements generally relate to real estate expenses incurred in the same period.

Lease termination fee.  In the three and nine months ended September 30, 2018, we received a lease termination fee of $372,000 in connection with the buyout of the lease with Savers for a retail property located in Colorado, which we refer to as the “Savers’ Buyout”, and re-leased the property simultaneously with the lease termination. There was no such fee in 2017.

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Operating Expenses

The following table compares operating expenses for the periods indicated:

	Three Months Ended September 30,				Increase			%		Nine Months Ended September 30,				Increase			%
(Dollars in thousands)	2018		2017		(Decrease)			Change		2018		2017		(Decrease)			Change
Operating expenses:
Depreciation and amortization	$	5,672	$	5,115	$	557		10.9		$	16,104	$	15,858	$	246		1.6
General and administrative	3,071		2,701		370			13.7		8,999		8,409		590			7.0
Real estate expenses	2,592		2,689		(97		)	(3.6	)	7,774		7,765		9			0.1
Federal excise and state taxes	59		90		(31		)	(34.4	)	286		401		(115		)	(28.7	)
Leasehold rent	77		77		—			—		231		231		—			—
Impairment loss	—		153		(153		)	(100.0	)	—		153		(153		)	(100.0	)
Total operating expenses	$	11,471	$	10,825	$	646		6.0		$	33,394	$	32,817	$	577		1.8

Depreciation and amortization.  The increases in the three and nine months ended September 30, 2018 are due primarily to (i) the $430,000 write-off of tenant origination costs related to the Savers’ Buyout, (ii) increases of $157,000 and $920,000, respectively, in such expense on properties acquired since January 1, 2017, and (iii) increases of $91,000 and $261,000, respectively, in such expense from improvements to several properties.  Offsetting the increases are decreases of (i) $1.0 million in the nine months ended September 30, 2018, from the properties sold since January 1, 2017 and (ii) the inclusion, during the nine months ended September 30, 2017, of $219,000 for the write-off of tenant origination costs related to a vacant property.

General and administrative.  Contributing to the increases in (i) the three and nine months ended September 30, 2018 are $287,000 and $312,000, respectively, in non-cash compensation primarily resulting from the restricted stock units awarded in 2017 and 2018, and (ii) the nine months ended September 30, 2018, is approximately $159,000 of higher compensation expense due to higher compensation levels.

Real estate expenses. The decrease for the three months ended September 30, 2018 is due to (i) a $147,000 decrease related to properties sold during 2018 and 2017; (ii) the inclusion, in the 2017 period, of $123,000 for two vacant properties that were re-tenanted subsequent to September 30, 2017, and (iii) the inclusion, in the 2017 period, of legal fees of $145,000 related to one property.   The decrease was offset by a (i) $51,000 increase from properties acquired in 2017 and 2018, and (ii) $265,000 increase from several same store properties, including approximately $225,000 related to real estate tax expense.

The increase for the nine months ended September 30, 2018 is due to a (i) $457,000 increase from properties acquired in 2017 and 2018 and (ii) $655,000 increase from several same store properties, including approximately $459,000 related to real estate tax expense.  The increase was offset by (i) a $595,000 decrease related to properties sold during 2018 and 2017; (ii) the inclusion, in the 2017 period, of $339,000 for two vacant properties that were re-tenanted subsequent to September 30, 2017, and (iii) the inclusion, in the 2017 period, of legal  fees of $169,000 related to one property.

Impairment loss.  In the three and nine months ended September 30, 2017, we recorded an impairment loss of $153,000 with respect to our property formerly tenanted by Joe’s Crab Shack, which was sold in November 2017. There was no similar loss in the current year.

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Gain on sale of real estate, net.

The following table compares gain on sale of real estate, net for the periods indicated:

	Three Months Ended September 30,				Increase		%	Nine Months Ended September 30,				Increase			%
(Dollars in thousands)	2018		2017		(Decrease)		Change	2018		2017		(Decrease)			Change
Gain on sale of real estate, net	$	4,585	$	3,269	$	1,316	40.3	$	6,993	$	9,837	$	(2,844	)	(28.9	)

The three and nine months ended September 30, 2018 includes a $4.6 million gain realized from the sale of the Lakemoor, Illinois property and the nine months ended September 30, 2018 includes a $2.4 million gain realized from the sale of the Fort Bend, Texas property. The non-controlling interest’s share of the Fort Bend, Texas gain was $776,000. The gain in the three and nine months ended September 30, 2017 was realized from the sale of several properties. See Note 5 to the Consolidated Financial Statements.

Other Income and Expenses

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

	Three Months Ended September 30,						Increase			%		Nine Months Ended September 30,						Increase			%
(Dollars in thousands)	2018			2017			(Decrease)			Change		2018			2017			(Decrease)			Change
Other income and expenses:
Equity in earnings of unconsolidated joint ventures	$	173		$	212		$	(39	)	(18.4	)	$	716		$	663		$	53		8.0
Equity in earnings from sale of unconsolidated joint venture properties	1,986			—			1,986			n/a		2,057			—			2,057			n/a
Other income	7			57			(50		)	(87.7	)	17			399			(382		)	(95.7	)
Interest:
Expense	(4,448		)	(4,459		)	(11		)	(0.2	)	(13,195		)	(13,380		)	(185		)	(1.4	)
Amortization and write-off of deferred financing costs	(220		)	(263		)	(43		)	(16.3	)	(669		)	(717		)	(48		)	(6.7	)

Equity in earnings from sale of unconsolidated joint venture properties. The three and nine months ended September 30, 2018 include a $2.0 million gain from the sale of the Milwaukee, Wisconsin property.  There were no similar sales during the three and nine months ended September 30, 2017.

Other income.   The nine months ended September 30, 2017 includes $243,000 paid to us by a former tenant in connection with the resolution of a dispute.

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

	Three Months Ended September 30,				Increase			%		Nine Months Ended September 30,				Increase			%
(Dollars in thousands)	2018		2017		(Decrease)			Change		2018		2017		(Decrease)			Change
Interest expense:
Credit line interest	$	140	$	139	$	1		0.7		$	486	$	360	$	126		35.0
Mortgage interest	4,308		4,320		(12		)	(0.3	)	12,709		13,020		(311		)	(2.4	)
Total	$	4,448	$	4,459	$	(11	)	(0.2	)	$	13,195	$	13,380	$	(185	)	(1.4	)

Credit line interest

The increase in the nine months ended September 30, 2018 was due primarily to a $2.8 million increase in the weighted average balance outstanding under our line of credit and a 79 basis point increase (from 2.83% to 3.62%) in the average interest rate due to the increase in the one month LIBOR rate.

Mortgage interest

The following table reflects the average interest rate on the average principal amount of outstanding mortgage debt for the periods indicated:

	Three Months Ended September 30,						Increase			%		Nine Months Ended September 30,						Increase			%
(Dollars in thousands)	2018			2017			(Decrease)			Change		2018			2017			(Decrease)			Change
Average interest rate on mortgage debt	4.27		%	4.31		%	(.04		)%	(0.9	)%	4.26		%	4.31		%	(0.05		)%	(1.2	)%
Average principal amount of mortgage debt	$	403,127		$	401,384		$	1,743		0.4	%	$	398,409		$	399,316		$	(907	)	(0.2	)%

The decrease in mortgage interest expense in the nine months ended September 30, 2018 is due primarily to a decrease in the average interest rate on outstanding mortgage debt. The decrease in the average interest rate is due to the financing (including financings effectuated in connection with acquisitions) or refinancing in 2018 and 2017 of $52.1 million of gross mortgage debt (including $2.9 million of refinanced amounts) with an average interest rate of approximately 4.2%.  Mortgage interest expense also decreased during the current nine months due to the inclusion, in the corresponding period of the prior year, of $118,000 related to the payoff of a mortgage and early termination of an interest rate swap in connection with the July 2017 sale of the Kohl’s, Kansas City, Missouri property.

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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 our equity securities and property sales.  Our available liquidity at November 2, 2018, was $104.6 million, including $8.6 million of cash and cash equivalents (net of the credit facility’s required $3 million deposit maintenance balance) and, subject to borrowing base requirements, up to $96.0 million available under our revolving credit facility.

Liquidity and Financing

We expect to meet our (i) operating cash requirements (including debt service and dividends) principally from cash flow from operations and (ii) remaining capital requirement of $960,000 of building expansion and improvements at our property tenanted by L-3 located in Hauppauge, New York, from cash flow from operations, our available cash and cash equivalents, proceeds from the sale of our common stock and, to the extent permitted, our credit facility.  We and our joint venture partner are also contemplating a significant redevelopment of our multi-tenant shopping center in Manahawkin, New Jersey - we anticipate that the capital expenditures that may be incurred if such property is redeveloped will be funded by the foregoing sources as well as equity contributions from us and our joint venture partner.

At September 30, 2018, excluding mortgage indebtedness of our unconsolidated joint venture, we had 69 outstanding mortgages payable secured by 86 properties, in the aggregate principal amount of $407.0 million (before netting unamortized deferred financing costs).  These mortgages represent first liens on individual real estate investments with an aggregate carrying value of $649.3 million, before accumulated depreciation of $94.3 million.  After giving effect to interest rate swap agreements, the mortgage payments bear interest at fixed rates ranging from 3.02% to 5.88% (a 4.24% weighted average interest rate) and mature between 2019 and 2042 (an 8.5 year weighted average remaining term to maturity).

The following table sets forth, as of September 30, 2018, information with respect to our mortgage debt that is payable from October 1, 2018 through December 31, 2021 (excluding our unconsolidated joint ventures):

(Dollars in thousands)	2018		2019		2020		2021		Total
Amortization payments	$	2,519	$	12,208	$	13,036	$	13,467	$	41,230
Principal due at maturity	—		3,485		—		8,463		11,948
Total	$	2,519	$	15,693	$	13,036	$	21,930	$	53,178

At September 30, 2018, an unconsolidated joint venture had a first mortgage on its property with an outstanding balance of $24.0 million, bearing an interest rate at 4.0% and maturing in 2025.

We intend to make debt amortization payments from operating cash flow and, though no assurance can be given that we will be successful in this regard, generally intend to refinance, extend or payoff the mortgage loans which mature from 2019 through 2021.  We intend to repay the amounts not refinanced or extended from our existing funds and sources of funds, including our available cash, proceeds from the sale of our common stock and our credit facility (to the extent available).

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We continually seek to refinance existing mortgage loans on terms we deem acceptable to generate additional liquidity.  Additionally, in the normal course of our business, we sell properties when we determine that it is in our best interests, which also generates additional liquidity.  Further, since each of our encumbered properties is subject to a non-recourse mortgage (with standard carve-outs), if our in-house evaluation of the market value of such property is less than the principal balance outstanding on the mortgage loan, we may determine to convey, in certain circumstances, such property to the mortgagee in order to terminate our mortgage obligations, including payment of interest, principal and real estate taxes, with respect to such property.

Typically, we utilize funds from our credit facility to acquire a property and, thereafter secure long-term, fixed rate mortgage debt on such property. We apply the proceeds from the mortgage loan to repay borrowings under the credit facility, thus providing us with the ability to re-borrow under the credit facility for the acquisition of additional properties.

Credit Facility

Subject to borrowing base requirements, we can borrow up to $100.0 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 $15.0 million and 15% of the borrowing base and if used for working capital purposes, will not exceed $10.0 million. The facility matures December 31, 2019 and bears interest equal to the one month LIBOR rate plus the applicable margin. The applicable margin ranges from 175 basis points if our ratio of total debt to total value (as calculated pursuant to the facility) is equal to or less than 50%, increasing to a maximum of 300 basis points if such ratio is greater than 65%. The applicable margin was 175 basis points at September 30, 2018 and 2017. At September 30, 2018 and 2017, the interest rate was 3.883% and 2.985%, respectively.  There is an unused facility fee of 0.25% per annum on the difference between the outstanding loan balance and $100 million. The credit facility requires the maintenance of $3.0 million in average deposit balances.

The terms of our revolving credit facility include certain restrictions and covenants which limit, among other things, the incurrence of liens, and which require compliance with financial ratios relating to, among other things, the minimum amount of tangible net worth, the minimum amount of debt service coverage, the minimum amount of fixed charge coverage, the maximum amount of debt to value, the minimum level of net income, certain investment limitations and the minimum value of unencumbered properties and the number of such properties. Net proceeds received from the sale, financing or refinancing of properties are generally required to be used to repay amounts outstanding under our credit facility. At September 30, 2018, we were in compliance with the covenants under this facility.

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Off-Balance Sheet Arrangements

We are not a party to any off-balance sheet arrangements other than with respect to our properties located in Wheaton, Illinois and Beachwood, Ohio. These properties are ground leases improved by multi-family properties and generated $2.1 million of rental income during the nine months ended September 30, 2018. At September 30, 2018, our maximum exposure to loss with respect to these properties is $24.4 million, representing the carrying value of the land; such leasehold positions are subordinate to an aggregate of $106.9 million of mortgage debt incurred by our tenants, the owner/operators of the multi-family properties. These owner/operators are affiliated with one another. We do not believe this type of off-balance sheet arrangement has been or will be material to our liquidity and capital resource positions. See Note 6 to our consolidated financial statements and “...Challenges Facing Certain Tenants”.

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 real estate depreciation and amortization (including amortization of deferred leasing costs), 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. In computing FFO, we do not add back to net income the amortization of costs in connection with our financing activities or depreciation of non-real estate assets. We compute adjusted funds from operations, or AFFO, by adjusting from FFO for our straight-line rent accruals and amortization of lease intangibles, deducting lease termination fees and gain on extinguishment of debt and adding back amortization of restricted stock and restricted stock unit compensation, amortization of costs in connection with our financing activities (including our share of our unconsolidated joint ventures) and debt prepayment costs. Since the NAREIT White Paper does not provide guidelines for computing AFFO, the computation of AFFO may vary from one REIT to another.

We believe that FFO and AFFO are useful and standard supplemental measures of the operating performance for equity REITs and are used frequently by securities analysts, investors and other interested parties in evaluating equity REITs, many of which present FFO and AFFO when reporting their operating results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate assets, which assumes that the value of real estate assets diminish predictability over time. In fact, real estate values have historically risen and fallen with market conditions. As a result, we believe that FFO and AFFO provide a performance measure that when compared year over year, should reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, interest costs and other matters without the inclusion of depreciation and amortization, providing a perspective that may not be necessarily apparent from net income. We also consider FFO and AFFO to be useful to us in evaluating potential property acquisitions.

FFO and AFFO do not represent net income or cash flows from operations as defined by GAAP. FFO and AFFO and should not be considered to be an alternative to net income as a reliable measure of our operating performance; nor should FFO and AFFO be considered an alternative to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity. FFO and AFFO do not measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization, capital improvements and distributions to stockholders.

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Management recognizes that there are limitations in the use of FFO and AFFO. In evaluating our performance, management is careful to examine GAAP measures such as net income and cash flows from operating, investing and financing activities.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
GAAP net income attributable to One Liberty Properties, Inc.	$	10,147		$	7,105		$	20,515		$	19,942
Add: depreciation and amortization of properties	5,584			5,036			15,846			15,621
Add: our share of depreciation and amortization of unconsolidated joint ventures	156			215			563			656
Add: impairment loss	—			153			—			153
Add: amortization of deferred leasing costs	88			79			258			237
Deduct: gain on sale of real estate	(4,585		)	(3,269		)	(6,993		)	(9,837		)
Deduct: equity in earnings from sale of unconsolidated joint venture properties	(1,986		)	—			(2,057		)	—
Adjustments for non-controlling interests	(26		)	(34		)	696			(103		)
NAREIT funds from operations applicable to common stock	9,378			9,285			28,828			26,669
Add (deduct): straight-line rent accruals and amortization of lease intangibles	93			(397		)	(932		)	(802		)
Deduct: lease termination fee income	(372		)	—			(372		)	—
(Deduct) add: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures	(7		)	10			13			27
Add: amortization of restricted stock and RSU compensation	971			684			2,653			2,341
Add: amortization and write-off of deferred financing costs	220			263			669			717
Add: our share of amortization and write-off of deferred financing costs of unconsolidated joint ventures	28			6			40			19
Adjustments for non-controlling interests	9			5			35			13
Adjusted funds from operations applicable to common stock	$	10,320		$	9,856		$	30,934		$	28,984

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
GAAP net income per common share attributable to One Liberty Properties, Inc.	$	.52		$	.38		$	1.06		$	1.07
Add: depreciation and amortization of properties	.29			.27			.83			.84
Add: our share of depreciation and amortization of unconsolidated joint ventures	.01			.01			.03			.04
Add: impairment loss	—			.01			—			.01
Add: amortization of deferred leasing costs	—			—			.01			.02
Deduct: gain on sale of real estate	(.24		)	(.17		)	(.36		)	(.53		)
Deduct: equity in earnings from sale of unconsolidated joint venture properties	(.10		)	—			(.11		)	—
Adjustments for non-controlling interests	—			—			.04			(.01		)
NAREIT funds from operations per share of common stock	.48			.50			1.50			1.44
Add (deduct): straight-line rent accruals and amortization of lease intangibles	—			(.02		)	(.04		)	(.05		)
Deduct: lease termination fee income	(.02		)	—			(.02		)	—
(Deduct) add: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures	—			—			—			—
Add: amortization of restricted stock and RSU compensation	.06			.04			.14			.13
Add: amortization and write-off of deferred financing costs	.01			.01			.03			.04
Add: our share of amortization and write-off of deferred financing costs of unconsolidated joint ventures	—			—			—			—
Adjustments for non-controlling interests	—			—			—			—
Adjusted funds from operations per share of common stock	$	.53		$	.53		$	1.61		$	1.56

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

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

We use interest rate swaps to limit interest rate risk on variable rate mortgages. These swaps are used for hedging purposes-not for speculation. We do not enter into interest rate swaps for trading purposes.  At September 30, 2018, we had no liability in the event of the early termination of our swaps.

At September 30, 2018, we had 28 interest rate swap agreements outstanding (including one held by an unconsolidated joint venture). The fair market value of the interest rate swaps is dependent upon existing market interest rates and swap spreads, which change over time. As of September 30, 2018, if there had been an increase of 100 basis points in forward interest rates, the fair market value of the interest rate swaps would have increased by approximately $6.2 million and the net unrealized gain on derivative instruments would have increased by $6.2 million.  If there were a decrease of 100 basis points in forward interest rates, the fair market value of the interest rate swaps would have decreased by approximately $6.6 million and the net unrealized gain on derivative instruments would have decreased by $6.6 million. These changes would not have any impact on our net income or cash.

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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 variable rate credit facility is sensitive to interest rate changes.  Based on the outstanding balance under this facility of $4.0 million at November 2, 2018,  a 100 basis point increase of the interest rate would increase our related interest costs over the next twelve months by approximately $40,000 and a 100 basis point decrease of the interest rate would decrease our related interest costs over the next twelve months by approximately $40,000.

The fair market value of our long-term debt is estimated based on discounting future cash flows at interest rates that our management believes reflect the risks associated with long term debt of similar risk and duration.

Item 4.  Controls and Procedures

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

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) promulgated under the Exchange Act) during the three months ended September 30, 2018 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

42

Part II - OTHER INFORMATION

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

43

ONE LIBERTY PROPERTIES, INC.

SIGNATURES

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

	ONE LIBERTY PROPERTIES, INC.
	(Registrant)
Date:  November 8, 2018	/s/ Patrick J. Callan, Jr.
	Patrick J. Callan, Jr.
	President and Chief Executive Officer
	(principal executive officer)
Date: November 8, 2018	/s/ David W. Kalish
	David W. Kalish
	Senior Vice President and
	Chief Financial Officer
	(principal financial officer)

44

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 September 30, 2018 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: November 8, 2018	/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 September 30, 2018 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: November 8, 2018	/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 September 30, 2018 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: November 8, 2018	/s/ Patrick J. Callan, Jr.
	Patrick J. Callan, Jr.
	President and
	Chief Executive Officer

The foregoing certification is being furnished pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, regardless of any general incorporation language in such filing.

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 September 30, 2018 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: November 8, 2018	/s/ David W. Kalish
	David W. Kalish
	Senior Vice President and
	Chief Financial Officer

The foregoing certification is being furnished pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, regardless of any general incorporation language in such filing.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 01, 2018
Document and Entity Information
Entity Registrant Name	ONE LIBERTY PROPERTIES INC
Entity Central Index Key	0000712770
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		19,387,581
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3

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CONSOLIDATED BALANCE SHEETS - USD ($)		Sep. 30, 2018	Dec. 31, 2017
Real estate investments, at cost
Land		$ 199,509,000	$ 209,320,000
Buildings and improvements		584,804,000	566,007,000
Total real estate investments, at cost		784,313,000	775,327,000
Less accumulated depreciation		120,622,000	108,953,000
Real estate investments, net		663,691,000	666,374,000
Investment in unconsolidated joint ventures		10,283,000	10,723,000
Cash and cash equivalents		17,173,000	13,766,000
Restricted cash		379,000	443,000
Unbilled rent receivable, net of allowance of $1,440 in 2018 and $0, respectively		13,407,000	14,125,000
Unamortized intangible lease assets, net		26,326,000	30,525,000
Escrow, deposits and other assets and receivables		11,178,000	6,630,000
Total assets	[1]	742,437,000	742,586,000
Liabilities:
Mortgages payable, net of $4,029 and $3,789 of deferred financing costs, respectively		402,978,000	393,157,000
Line of credit, net of $0 and $624 of deferred financing costs, respectively			8,776,000
Dividends payable		8,694,000	8,493,000
Accrued expenses and other liabilities		7,951,000	16,107,000
Unamortized intangible lease liabilities, net		15,308,000	17,551,000
Total liabilities	[1]	434,931,000	444,084,000
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; 18,669 and 18,261 shares issued and outstanding		18,669,000	18,261,000
Paid-in capital		284,772,000	275,087,000
Accumulated other comprehensive income		4,781,000	155,000
Accumulated (distributions in excess of net income) undistributed net income		(2,155,000)	3,257,000
Total One Liberty Properties, Inc. stockholders' equity		306,067,000	296,760,000
Non-controlling interests in consolidated joint ventures	[1]	1,439,000	1,742,000
Total equity		307,506,000	298,502,000
Total liabilities and equity		$ 742,437,000	$ 742,586,000

[1] The Company’s consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”). See Note 6. The consolidated balance sheets include the following amounts related to the Company’s consolidated VIEs: $14,722 and $17,844 of land, $27,893 and $31,789 of building and improvements, net of $3,867 and $3,811 of accumulated depreciation, $3,908 and $4,345 of other assets included in other line items, $27,143 and $32,252 of real estate debt, net, $2,459 and $2,885 of other liabilities included in other line items and $1,439 and $1,742 of non-controlling interests as of September 30, 2018 and December 31, 2017, respectively

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands		Sep. 30, 2018	Dec. 31, 2017
Allowance for unbilled rent receivable		$ 1,440	$ 0
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		18,669	18,261
Common stock, shares outstanding		18,669	18,261
Land		$ 199,509	$ 209,320
Buildings and improvements		584,804	566,007
Accumulated depreciation		120,622	108,953
Non-controlling interests in consolidated joint ventures	[1]	1,439	1,742
Consolidated VIE entities
Deferred financing costs		407	442
Land		14,722	17,844
Buildings and improvements		27,893	31,789
Accumulated depreciation		3,867	3,811
Other assets		3,908	4,345
Real estate debt, net		27,143	32,252
Other liabilities		2,459	2,885
Non-controlling interests in consolidated joint ventures		1,439	1,742
Facility
Deferred financing costs		0	624
Mortgages payable
Deferred financing costs		$ 4,029	$ 3,789

[1] The Company’s consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”). See Note 6. The consolidated balance sheets include the following amounts related to the Company’s consolidated VIEs: $14,722 and $17,844 of land, $27,893 and $31,789 of building and improvements, net of $3,867 and $3,811 of accumulated depreciation, $3,908 and $4,345 of other assets included in other line items, $27,143 and $32,252 of real estate debt, net, $2,459 and $2,885 of other liabilities included in other line items and $1,439 and $1,742 of non-controlling interests as of September 30, 2018 and December 31, 2017, respectively

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CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues:
Total revenues	$ 19,570,000	$ 19,137,000	$ 58,856,000	$ 56,022,000
Operating expenses:
Depreciation and amortization	5,672,000	5,115,000	16,104,000	15,858,000
General and administrative (see Note 11 for related party information)	3,071,000	2,701,000	8,999,000	8,409,000
Real estate expenses (see Note 11 for related party information)	2,592,000	2,689,000	7,774,000	7,765,000
Federal excise and state taxes	59,000	90,000	286,000	401,000
Leasehold rent	77,000	77,000	231,000	231,000
Impairment loss		153,000		153,000
Total operating expenses	11,471,000	10,825,000	33,394,000	32,817,000
Other operating income
Gain on sale of real estate, net	4,585,000	3,269,000	6,993,000	9,837,000
Operating income	12,684,000	11,581,000	32,455,000	33,042,000
Other income and expenses:
Equity in earnings of unconsolidated joint ventures	173,000	212,000	716,000	663,000
Equity in earnings from sale of unconsolidated joint venture properties	1,986,000		2,057,000
Other income	7,000	57,000	17,000	399,000
Interest:
Expense	(4,448,000)	(4,459,000)	(13,195,000)	(13,380,000)
Amortization and write-off of deferred financing costs	(220,000)	(263,000)	(669,000)	(717,000)
Net income	10,182,000	7,128,000	21,381,000	20,007,000
Net income attributable to non-controlling interests	(35,000)	(23,000)	(866,000)	(65,000)
Net income attributable to One Liberty Properties, Inc.	$ 10,147,000	$ 7,105,000	$ 20,515,000	$ 19,942,000
Weighted average number of common shares outstanding:
Basic (in shares)	18,646	18,000	18,521	17,859
Diluted (in shares)	18,705	18,079	18,562	17,961
Per common share attributable to common stockholders:
Basic (in dollars per share)	$ 0.53	$ 0.38	$ 1.06	$ 1.07
Diluted (in dollars per share)	0.52	0.38	1.06	1.07
Cash distributions declared per share of common stock	$ 0.45	$ 0.43	$ 1.35	$ 1.29
Rental income, net
Revenues:
Total revenues	$ 17,193,000	$ 17,217,000	$ 52,501,000	$ 50,770,000
Tenant reimbursement
Revenues:
Total revenues	2,005,000	$ 1,920,000	5,983,000	$ 5,252,000
Lease termination fee
Revenues:
Total revenues	$ 372,000		$ 372,000

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 10,182	$ 7,128	$ 21,381	$ 20,007
Other comprehensive gain
Net unrealized gain on derivative instruments	871	104	4,671	172
Reclassification of One Liberty Properties Inc.'s share of joint venture net realized gain on derivative instrument			(110)
One Liberty Properties Inc.'s share of joint venture net unrealized gain on derivative instruments		11	76	34
Other comprehensive gain	871	115	4,637	206
Comprehensive income	11,053	7,243	26,018	20,213
Net income attributable to non-controlling interests	(35)	(23)	(866)	(65)
Adjustment for derivative instruments attributable to non-controlling interests	(3)	(1)	(11)	(2)
Comprehensive income attributable to One Liberty Properties, Inc.	$ 11,015	$ 7,219	$ 25,141	$ 20,146

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands	Common Stock	Paid-in Capital	Accumulated Other Comprehensive (Loss) Income	Accumulated Undistributed Net Income	Accumulated distributions in excess of net income	Non-Controlling Interests in Consolidated Joint Ventures	Total
Balances at Dec. 31, 2016	$ 17,600	$ 262,511	$ (1,479)	$ 11,501		$ 1,794	$ 291,927
Distributions - common stock
Cash - $ 1.29 per share, $1.35 per share for the year ended September 30, 2017, 2018 respectively					$ (23,899)		(23,899)
Shares issued through equity offering program - net	135	2,932					3,067
Restricted stock vesting	232	(232)
Shares issued through dividend reinvestment plan	147	3,210					3,357
Distributions to non-controlling interests						(148)	(148)
Compensation expense - restricted stock		2,341					2,341
Net income				19,942		65	20,007
Other comprehensive income			204			2	206
Balances at Sep. 30, 2017	18,114	270,762	(1,275)	7,544		1,713	296,858
Balances at Dec. 31, 2017	18,261	275,087	155	3,257		1,742	298,502
Distributions - common stock
Cash - $ 1.29 per share, $1.35 per share for the year ended September 30, 2017, 2018 respectively					(25,927)		(25,927)
Shares issued through equity offering program - net	126	3,044					3,170
Restricted stock vesting	106	(106)
Shares issued through dividend reinvestment plan	176	4,094					4,270
Distributions to non-controlling interests						(1,180)	(1,180)
Compensation expense - restricted stock		2,653					2,653
Net income				$ 20,515		866	21,381
Other comprehensive income			4,626			11	4,637
Balances at Sep. 30, 2018	$ 18,669	$ 284,772	$ 4,781		$ (2,155)	$ 1,439	$ 307,506

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Distributions - common stock, Cash per share (in dollars per share)	$ 0.45	$ 0.43	$ 1.35	$ 1.29

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net income	$ 21,381,000	$ 20,007,000
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of real estate, net	(6,993,000)	(9,837,000)
Impairment loss		153,000
Increase in unbilled rent receivable	(841,000)	(509,000)
Write-off of unbilled rent receivable	74,000	362,000
Bad debt expense	0	310,000
Provision for unbilled rent receivable	1,440,000
Amortization and write-off of intangibles relating to leases, net	(1,605,000)	(654,000)
Amortization of restricted stock expense	2,653,000	2,341,000
Equity in earnings of unconsolidated joint ventures	(716,000)	(663,000)
Equity in earnings from sale of unconsolidated joint venture properties	(2,057,000)
Distributions of earnings from unconsolidated joint ventures	2,328,000	584,000
Depreciation and amortization	16,104,000	15,858,000
Amortization and write-off of deferred financing costs	669,000	717,000
Payment of leasing commissions	(254,000)	(67,000)
(Increase) decrease in escrow, deposits, other assets and receivables	(1,154,000)	273,000
(Decrease) increase in accrued expenses and other liabilities	(1,400,000)	1,264,000
Net cash provided by operating activities	29,629,000	30,139,000
Cash flows from investing activities:
Purchase of real estate	(18,452,000)	(35,443,000)
Improvements to real estate	(6,829,000)	(2,321,000)
Net proceeds from sale of real estate	17,417,000	24,093,000
Distributions of capital from unconsolidated joint ventures	852,000	298,000
Net cash used in investing activities	(7,012,000)	(13,373,000)
Cash flows from financing activities:
Scheduled amortization payments of mortgages payable	(8,072,000)	(7,808,000)
Repayment of mortgages payable	(12,731,000)	(11,541,000)
Proceeds from mortgage financings	30,863,000	21,210,000
Proceeds from sale of common stock, net	3,170,000	3,067,000
Proceeds from bank line of credit	28,500,000	34,500,000
Repayment on bank line of credit	(37,900,000)	(38,100,000)
Issuance of shares through dividend reinvestment plan	4,270,000	3,357,000
Payment of financing costs	(675,000)	(150,000)
Distributions to non-controlling interests	(1,180,000)	(148,000)
Cash distributions to common stockholders	(25,726,000)	(23,652,000)
Net cash used in financing activities	(19,481,000)	(19,265,000)
Net increase (decrease) in cash, cash equivalents and restricted cash	3,136,000	(2,499,000)
Cash, cash equivalents and restricted cash at beginning of year	14,668,000	18,450,000
Cash, cash equivalents and restricted cash at end of period	17,804,000	15,951,000
Supplemental disclosures of cash flow information:
Cash paid during the period for interest expense	$ 13,196,000	13,350,000
Supplemental schedule of non-cash investing and financing activities:
Purchase accounting allocation - intangible lease assets		4,009,000
Purchase accounting allocation - intangible lease liabilities		$ (158,000)

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Organization and Background

9 Months Ended

Sep. 30, 2018

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 consisting primarily of industrial, retail (including furniture stores and supermarkets), restaurant, health and fitness, and theater properties, many of which are subject to long-term net leases.  As of September 30, 2018, OLP owns 118 properties, including five properties owned by consolidated joint ventures and four properties owned by unconsolidated joint ventures. The 118 properties are located in 30 states.

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Summary Accounting Policies

9 Months Ended

Sep. 30, 2018

Summary Accounting Policies

Summary Accounting Policies

Note 2 — Summary Accounting Policies

Principles of Consolidation/Basis of Preparation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by U.S. Generally Accepted Accounting Principles (“GAAP”) for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statement disclosures. In the opinion of management, all adjustments of a normal recurring nature necessary for fair presentation have been included. The results of operations for the three and nine months ended September 30, 2018 and 2017 are not necessarily indicative of the results for the full year. These statements should be read in conjunction with the consolidated financial statements and related notes included in OLP’s Annual Report on Form 10-K for the year ended December 31, 2017.

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

The consolidated financial statements include the accounts and operations of OLP, its wholly-owned subsidiaries, its joint ventures in which the Company, as defined, has a controlling interest, and variable interest entities (“VIEs”) of which the Company is the primary beneficiary.  OLP and its consolidated subsidiaries are referred to herein as the “Company”.   Material intercompany items and transactions have been eliminated in consolidation.

Investment in Joint Ventures and Variable Interest Entities

The Financial Accounting Standards Board, or FASB, provides guidance for determining whether an entity is a VIE.  VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A VIE is required to be consolidated by its primary beneficiary, which is the party that (i) has the power to control the activities that most significantly impact the VIE’s economic performance and (ii) has the obligation to absorb losses, or the right to receive benefits, of the VIE that could potentially be significant to the VIE.

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

The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting. All investments in unconsolidated joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result, none of these joint ventures are VIEs. In addition, the Company shares power with its co-managing members 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.

The Company periodically reviews its investments in unconsolidated joint ventures for other-than-temporary losses in investment value. Any decline that is not expected to be recovered based on the underlying assets of the investment is considered other than temporary and an impairment charge is recorded as a reduction in the carrying value of the investment. During the three and nine months ended September 30, 2018 and 2017, there were no impairment charges related to the Company’s investments in unconsolidated joint ventures.

The Company has elected to follow the cumulative earnings approach when assessing, for the consolidated statement of cash flows, whether the distribution from the investee is a return of the investor’s investment as compared to a return on its investment. The source of the cash generated by the investee to fund the distribution is not a factor in the analysis (that is, it does not matter whether the cash was generated through investee refinancing, sale of assets or operating results). Consequently, the investor only considers the relationship between the cash received from the investee to its equity in the undistributed earnings of the investee, on a cumulative basis, in assessing whether the distribution from the investee is a return on or a return of its investment. Cash received from the unconsolidated entity is presumed to be a return on the investment to the extent that, on a cumulative basis, distributions received by the investor are less than its share of the equity in the undistributed earnings of the entity.

Reclassifications

Certain amounts previously reported in the consolidated financial statements have been reclassified in the accompanying consolidated financial statements to conform to the current period’s presentation.  Such reclassifications primarily relate to the presentation of (i) Gain on sale of real estate, net, on the consolidated statement of income for the three and nine months ended September 30, 2017 and (ii) restricted cash on the consolidated statement of cash flows for the nine months ended September 30, 2017.

The Company has included Gain on sale of real estate, net, as a component of Operating income, to present gains and losses on sales of properties in accordance with ASC 360-10-45-5. The change was made for the prior periods as the Securities and Exchange Commission has eliminated Rule 3-15(a) of Regulation S-X as part of Release Nos. 33-10532, 34-83875 and IC-33203, which had required REITs to present gains and losses on sales of properties outside of continuing operations in the income statement.

As of January 1, 2018, the Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires amounts generally described as restricted cash to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The adoption of this ASU has no impact on the Company’s previously reported consolidated balance sheets, consolidated statements of income, net income or accumulated undistributed net income for the periods presented.

As a result of the adoption of this guidance, the following table depicts the adjustments to the Company’s previously reported consolidated statement of cash flows (amounts in thousands):

	Nine Months Ended
	September 30, 2017
	As Reported		As Adjusted
Decrease in escrow, deposits, and other assets and receivables	$	165	$	273
Increase in accrued expenses and other liabilities		1,377		1,264
Net decrease in cash, cash equivalents and restricted cash		(2,494)		(2,499)
Cash, cash equivalents and restricted cash at beginning of year		17,420		18,450
Cash, cash equivalents and restricted cash at end of period		14,926		15,951

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (amounts in thousands):

	September 30,
	2018		2017
Cash and cash equivalents	$	17,173	$	14,926
Restricted cash		379		530
Restricted cash included in escrow, deposits and other assets and receivables		252		495
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows	$	17,804	$	15,951

Amounts included in restricted cash represent the cash reserve balance received from an owner/operator at one of the Company’s ground leases to cover certain unit renovation work (see Note 6). Restricted cash included in escrow, deposits and other assets and receivables represent amounts related to real estate tax and other reserve escrows required to be held by lenders in accordance with the Company’s mortgage agreements.  The restriction on these escrow reserves will lapse when the related mortgage is repaid.

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2018

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 each period by the weighted average number of shares of common stock outstanding during the applicable period. Net income is also allocated to the unvested restricted stock outstanding during each period, as the unvested restricted stock is entitled to receive dividends and is therefore considered a participating security. As of September 30, 2018, the shares of common stock underlying the restricted stock units awarded under the 2016 Incentive Plan are excluded from the basic earnings per share calculation, as these units are not participating securities. The restricted stock units issued pursuant to the 2009 and 2016 Incentive Plans are referred to as “RSUs”.

Diluted earnings per share reflects the potential dilution that could occur if securities or other rights exercisable for, or convertible into, common stock were exercised or converted or otherwise resulted in the issuance of common stock that shared in the earnings of the Company. 

The following table identifies the number of shares of common stock underlying the RSUs awarded under the 2016 Incentive Plan that are included in the calculation of diluted weighted average number of shares of common stock:

		Three and Nine			Three and Nine
		Months Ended			Months Ended
		September 30, 2018			September 30, 2017
Date of Award and		Return on	Stockholder		Return on	Stockholder
Total Number of		Capital	Return		Capital	Return
Underlying Shares		metric	metric	Total	metric	metric	Total
September 26, 2017
76,250 shares	(a)	33,524	38,125	71,649	38,125	—	38,125
July 1, 2018
76,250 shares	(b)	30,929	—	30,929	n/a	n/a	n/a
		64,453	38,125	102,578	38,125	—	38,125

(a) Includes shares that would be issued pursuant to the respective metrics, assuming the end of the quarterly period was the June 30, 2020 vesting date. None of the remaining 4,601 shares and 38,125 shares are included at September 30, 2018 and 2017, respectively, as the applicable metrics had not been met for these shares.

(b) Includes shares that would be issued pursuant to the respective metrics, assuming the end of the quarterly period was the June 30, 2021 vesting date. None of the remaining 45,321 shares are included at September 30, 2018, as the applicable metrics had not been met for these shares.

In 2010, RSUs exchangeable for up to 200,000 shares of common stock were awarded pursuant to the 2009 Incentive Plan.  In June 2017, 113,584 of these shares vested and such shares were issued in August 2017.

See Note 14 for information regarding the Company’s equity incentive plans.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Numerator for basic and diluted earnings per share:
Net income	$	10,182	$	7,128	$	21,381	$	20,007
Less net income attributable to non-controlling interests		(35)		(23)		(866)		(65)
Less earnings allocated to unvested restricted stock (a)		(342)		(263)		(879)		(796)
Net income available for common stockholders: basic and diluted	$	9,805	$	6,842	$	19,636	$	19,146
Denominator for basic earnings per share:
Weighted average number of common shares		18,646		18,000		18,521		17,859
Effect of dilutive securities:
RSUs		59		79		41		102
Denominator for diluted earnings per share:
Weighted average number of shares		18,705		18,079		18,562		17,961
Earnings per common share, basic	$	.53	$	.38	$	1.06	$	1.07
Earnings per common share, diluted	$	.52	$	.38	$	1.06	$	1.07

(a) Represents an allocation of distributed earnings to unvested restricted stock which, as participating securities, are entitled to receive dividends.

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Real Estate Acquisitions

9 Months Ended

Sep. 30, 2018

Real Estate Acquisitions

Real Estate Acquisitions

Note 4 — Real Estate Acquisitions

The following chart details the Company’s acquisitions of real estate during the nine months ended September 30, 2018 (amounts in thousands):

					Capitalized
					Third Party
		Contract			Real Estate
		Purchase		Terms of	Acquisition
Description of Property	Date Acquired	Price		Payment	Costs
Campania International/U.S. Tape industrial facility, Pennsburg, Pennsylvania	March 28, 2018	$	12,675	All cash (a)	$	227
Plymouth Industries industrial facility, Plymouth, Minnesota	June 7, 2018		5,500	All cash (b)		50
Totals		$	18,175		$	277

(a) In July 2018, the Company obtained new mortgage debt of $8,238.

(b) In September 2018, the Company obtained new mortgage debt of $3,325.

The Company determined that with respect to each of these acquisitions, the gross assets acquired are concentrated in a single identifiable asset. Therefore, these transactions do not meet the definition of a business and are accounted for as asset acquisitions. As such, direct transaction costs  associated with these asset acquisitions have been capitalized to real estate assets and depreciated over their respective useful lives. 

The following chart details the allocation of the purchase price for the Company’s acquisitions of real estate during the nine months ended September 30, 2018 (amounts in thousands):

					Building
Description of Property	Land		Building		Improvements		Total
Campania International/U.S. Tape industrial facility, Pennsburg, Pennsylvania	$	1,776	$	10,399	$	727	$	12,902
Plymouth Industries industrial facility, Plymouth, Minnesota		1,121		4,306		123		5,550
Totals	$	2,897	$	14,705	$	850	$	18,452

Property Acquisitions Subsequent to September 30, 2018

On October 19, 2018, the Company acquired, in a sale-leaseback transaction, an industrial/office property, located in Englewood, Colorado for $12,800,000.  The initial term of the lease is twelve years.

On November 1, 2018, the Company acquired an industrial property, located in Moorestown, New Jersey for $7,350,000.  The initial term of the lease is 9.5 years.

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Sales of Properties

9 Months Ended

Sep. 30, 2018

Sales of Properties

Sales of Properties

Note 5 — Sales of Properties

On January 1, 2018, the Company adopted ASU No. 2017-05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, using the modified retrospective transition method. As leasing is the Company’s primary activity, the Company determined that its sales of real estate, which are nonfinancial assets, are sold to noncustomers and fall within the scope of ASC 610-20.  The Company re-assessed and determined there were no open contracts or partial sales and as such, the adoption of this ASU did not (i) result in a cumulative adjustment as of January 1, 2018, and (ii) have any impact on the Company’s consolidated financial statements.

The following chart details the Company’s sales of real estate during the nine months ended September  30, 2018 and 2017 (amounts in thousands):

		Gross		Gain on Sale of Real
Description of Property	Date Sold	Sales Price		Estate, Net
Retail property,
Fort Bend, Texas (a)	January 30, 2018	$	9,200	$	2,408
Land,
Lakemoor, Illinois	September 14, 2018		8,459		4,585	(b)
Totals – nine months ended September 30, 2018		$	17,659	$	6,993
Retail property,
Greenwood Village, Colorado	May 8, 2017	$	9,500	$	6,568
Retail property,
Kansas City, Missouri (c)	July 14, 2017		10,250		2,180
Retail property,
Niles, Illinois	August 31, 2017		5,000		1,089
Totals – nine months ended September 30, 2017		$	24,750	$	9,837

(a) This property was owned by a consolidated joint venture in which the Company held an 85% interest. The non-controlling interest’s share of the gain was $776.

(b) Includes $5,717, representing the unamortized balance of a $5,906 fixed rent payment which was received and recorded as deferred income in November 2017 and was to be included in rental income over the term of the lease.

(c) See Note 15 for information on the early termination of the interest rate swap derivative associated with the mortgage that was paid off on this property. 

The Company determined it would recognize the full gain on the sales of the Fort Bend, Texas and Lakemoor, Illinois properties in accordance with ASC 610-20 as the Company has no (i) controlling financial interest in either of the properties and (ii) continuing interest or obligation with respect to the properties sold.

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Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures

9 Months Ended

Sep. 30, 2018

Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures

Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures

Note 6 – Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures

Variable Interest Entities – Ground Leases

The Company determined that with respect to the properties identified in the table below, it has a variable interest through its ground leases and the two owner/operators (which are affiliated with one another) are VIEs because their equity investment at risk is insufficient to finance its activities without additional subordinated financial support. The Company further determined that it is not the primary beneficiary of these VIEs because the Company has shared power over certain activities that most significantly impact the owner/operator’s economic performance (i.e., shared rights on the sale of the property) and therefore, does not consolidate these VIEs for financial statement purposes. Accordingly, the Company accounts for these investments as land and the revenues from the ground leases as Rental income, net. Such rental income amounted to $925,000 and $2,872,000 for the three and nine months ended September 30, 2018, respectively, and $954,000 and $2,758,000 for the three and nine months ended September 30, 2017, respectively.  Included in these amounts is rental income from a previously held VIE property in Lakemoor, Illinois, which the Company sold in September 2018 (see Note 5), amounting to $214,000 and $800,000 for the three and nine months ended September 30, 2018, respectively, and $282,000 and $862,000 for the three and nine months ended September 30, 2017, respectively.

The following chart details the VIEs through the Company’s ground leases and the aggregate carrying amount and maximum exposure to loss as of September 30, 2018 (dollars in thousands):

					Owner/			Carrying
		Land			Operator			Amount and
		Contract		# Units in	Mortgage			Maximum
		Purchase		Apartment	from		Type of	Exposure to
Description of Property(a)	Date Acquired	Price		Complex	Third Party(b)		Exposure	Loss
The Briarbrook Village Apartments, Wheaton, Illinois	August 2,2016	$	10,530	342	$	39,411	Land	$	10,536
The Vue Apartments, Beachwood, Ohio	August 16, 2016		13,896	348		67,444	Land		13,901
Totals		$	24,426	690	$	106,855		$	24,437

(a) Simultaneously with each purchase, the Company entered into a triple net ground lease with affiliates of Strategic Properties of North America, the owner/operators of these properties.

(b) Simultaneously with the closing of each acquisition, the owner/operator obtained a mortgage from a third party which, together with the Company’s purchase of the land, provided substantially all of the funds to acquire the complex.  The Company provided its land as collateral for the respective owner/operator’s mortgage loans; accordingly, each land position is subordinated to the applicable mortgage. No other financial support has been provided by the Company to the owner/operator.

Pursuant to the terms of the ground lease for the Wheaton, Illinois property, the owner/operator is obligated to make certain unit renovations as and when units become vacant. Cash reserves to cover such renovation work, received by the Company in conjunction with the purchase of the property, are disbursed when the unit renovations are completed. The related cash reserve balance for this property was $379,000 and $443,000 at September 30, 2018 and December 31, 2017, respectively, and is classified as Restricted cash on the consolidated balance sheets.

Variable Interest Entity – Consolidated Joint Ventures

With respect to the five consolidated joint ventures in which the Company holds between a 90% to 95% interest, the Company has determined such ventures are VIEs because the non-controlling interests do not hold substantive kick-out or participating rights. 

In each of these consolidated joint ventures, the Company has determined it is the primary beneficiary of the VIE as it has the power to direct the activities that most significantly impact each joint venture’s performance including management, approval of expenditures, and the obligation to absorb the losses or rights to receive benefits.  Accordingly, the Company consolidates the operations of these joint ventures for financial statement purposes.  The joint ventures’ creditors do not have recourse to the assets of the Company other than those held by these joint ventures.

The following is a summary of the consolidated VIEs’ carrying amounts and classification in the Company’s consolidated balance sheets, none of which are restricted (amounts in thousands):

	September 30,		December 31,
	2018		2017 (a)
Land	$	14,722	$	17,844
Buildings and improvements, net of  accumulated depreciation of $3,867 and $3,811, respectively		27,893		31,789
Cash		902		1,145
Unbilled rent receivable		1,196		1,011
Unamortized intangible lease assets, net		932		1,241
Escrow, deposits and other assets and receivables		878		948
Mortgages payable, net of unamortized deferred financing costs of $407 and $442, respectively		27,143		32,252
Accrued expenses and other liabilities		689		870
Unamortized intangible lease liabilities, net		1,770		2,015
Accumulated other comprehensive income (loss)		117		(1)
Non-controlling interests in consolidated joint ventures		1,439		1,742

(a) Includes a consolidated joint venture, in which the Company held an 85% interest, located in Fort Bend, Texas which was sold in January 2018 (see Note 5).

At September 30, 2018 and December 31, 2017, MCB Real Estate, LLC and its affiliates (‘‘MCB’’) are the Company’s joint venture partner in  four consolidated joint ventures in which the Company has aggregate equity investments of approximately $9,859,000 and  $9,705,000, respectively.

Distributions to each joint venture partner are determined pursuant to the applicable operating agreement and may not be pro rata to the equity interest each partner has in the applicable venture.

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Investment in Unconsolidated Joint Ventures

9 Months Ended

Sep. 30, 2018

Investment in Unconsolidated Joint Ventures

Investment in Unconsolidated Joint Ventures

Note 7– Investment in Unconsolidated Joint Ventures

On July 31, 2018, an unconsolidated joint venture sold its property located in Milwaukee, Wisconsin for $12,813,000, net of closing costs, and paid off the related $6,970,000 mortgage. The Company’s 50% share of the gain from this sale was $1,986,000, which is included in Equity in earnings from sale of unconsolidated joint venture properties on the consolidated statements of income for the three and nine months ended September 30, 2018.

On April 5, 2018, an unconsolidated joint venture sold its building and a portion of its land, located in Savannah, Georgia for $2,600,000, net of closing costs. The Company's 50% share of the gain from this sale was $71,000, which is included in Equity in earnings from sale of unconsolidated joint venture properties on the consolidated statement of income for the nine months ended September 30, 2018. The unconsolidated joint venture retained approximately five acres of land at this property.

The Company’s remaining four unconsolidated joint ventures each own and operate one property.  At September 30, 2018 and December 31, 2017, the Company’s equity investment in unconsolidated joint ventures totaled $10,283,000 and $10,723,000, respectively. In addition to the equity in earnings from the sale of properties of $2,057,000 in 2018, the Company recorded equity in earnings of $173,000 and $716,000 for the three and nine months ended September 30, 2018, respectively, and $212,000 and $663,000 for the three and nine months ended September 30, 2017, respectively. Included in equity in earnings from unconsolidated joint ventures for the nine months ended September 30, 2018 is income of $110,000 related to the discontinuance of hedge accounting on a mortgage swap related to the unconsolidated joint venture property, located in Milwaukee, Wisconsin, that was sold in July 2018 (see above and Note 15).

At September 30, 2018, MCB is the Company’s joint venture partner in one of these unconsolidated joint ventures in which the Company has an equity investment of $8,534,000.

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Lease Termination Fee

9 Months Ended

Sep. 30, 2018

Lease Termination Fee

Lease Termination Fee

Note 8 – Lease Termination Fee

In July 2018, the Company received a $372,000 lease termination fee from a retail tenant in a lease buy-out transaction. In addition, the Company recorded $804,000 as rental income, representing the write-off of the $878,000 balance of the unamortized intangible lease liability, offset in part by the write-off of the $74,000 balance of the unbilled rent receivable related to this tenant. The Company re-leased this property simultaneously with the termination of the lease.

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Allowance for Doubtful Accounts

9 Months Ended

Sep. 30, 2018

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

Note 9 – Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of a tenant to make required rent and other payments.  If the financial condition of a specific tenant were to deteriorate, adversely impacting its ability to make payments, allowances may be required.  At September 30, 2018, due to the uncertainty with respect to the collection of the unbilled rent receivable related to a property located in Texas, the Company recorded an allowance of $1,440,000, as a reduction to rental income, representing the entire balance of such receivable. There was no balance in allowance for doubtful accounts at December 31, 2017. 

The Company records bad debt expense as a reduction of rental income and/or tenant reimbursements. There was no bad debt expense in the three and nine months ended September 30, 2018. During the nine months ended September 30, 2017, the Company recorded bad debt expense of $310,000, related to rental income and tenant reimbursements due from former tenants that filed for Chapter 11 bankruptcy protection. In connection with these tenants, the Company wrote-off (i) $362,000 of unbilled rent receivable and $67,000 of unamortized intangible lease assets as a reduction to rental income and (ii) $884,000 of tenant origination costs as an increase to depreciation expense.

Impairment Loss

In November 2017, the Company sold its property formerly tenanted by Joe's Crab Shack, located in Ann Arbor, Michigan. As the sales price was less than the net book value, the Company determined that the property was impaired and recorded an impairment loss of $153,000, representing the difference, at September 30, 2017, between the net sales price and the net book value. The impairment loss is included in the accompanying consolidated statements of income for the three and nine months ended September 30, 2017.

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Debt Obligations

9 Months Ended

Sep. 30, 2018

Debt Obligations

Debt Obligations

Note 10 – Debt Obligations

Mortgages Payable

The following table details the Mortgages payable, net, balances per the consolidated balance sheets (amounts in thousands):

	September 30,		December 31,
	2018		2017
Mortgages payable, gross	$	407,007	$	396,946
Unamortized deferred financing costs		(4,029)		(3,789)
Mortgages payable, net	$	402,978	$	393,157

Line of Credit

The Company has a credit facility with Manufacturers & Traders Trust Company, People’s United Bank, VNB New York, LLC, and Bank Leumi USA, pursuant to which the Company may borrow up to $100,000,000, subject to borrowing base requirements.  The facility, which matures December 31, 2019, provides that the Company pay an interest rate equal to the one month LIBOR rate plus an applicable margin ranging from 175 basis points to 300 basis points depending on the ratio of the Company’s total debt to total value, as determined pursuant to the facility. At September 30, 2018 and 2017, the applicable margin was 175 basis points. An unused facility fee of .25% per annum applies to the facility.  The average interest rate on the facility was approximately 3.62% and 2.83% for the nine months ended September 30, 2018 and 2017, respectively.  The Company was in compliance with all covenants at September 30, 2018.

The following table details the Line of credit, net, balances per the consolidated balance sheets (amounts in thousands):

	September 30,		December 31,
	2018 (a)		2017
Line of credit, gross	$	—	$	9,400
Unamortized deferred financing costs		—		(624)
Line of credit, net	$	—	$	8,776

(a) In accordance with ASU 2015-15, as there was no balance outstanding on the Line of credit, the Company reclassified the related unamortized deferred financing costs of $390 to Escrow, deposits, and other assets and receivables on the consolidated balance sheet at September 30, 2018. 

At November 2, 2018, there was an outstanding balance of $4,000,000 (before unamortized deferred financing costs) under the facility.

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Related Party Transactions

9 Months Ended

Sep. 30, 2018

Related Party Transactions

Related Party Transactions

Note 11 – Related Party Transactions

Compensation and Services Agreement

Pursuant to the compensation and services agreement with Majestic Property Management Corp. (“Majestic”), the Company pays fees to Majestic and Majestic provides to the Company the services of all affiliated executive, administrative, legal, accounting, clerical and property management personnel, as well as property acquisition, sale and lease consulting and brokerage services, consulting services with respect to mortgage financings and construction supervisory services. Majestic is wholly-owned by the Company’s vice-chairman and certain of the Company’s executive officers are officers of, and are compensated by, Majestic.  The fee the Company pays Majestic is negotiated each year by Majestic and the Compensation and/or Audit Committees of the Company’s Board of Directors, and is approved by such committees and the independent directors.

In consideration for the services described above, the Company paid Majestic $687,000 and $2,054,000 for the three and nine months ended September 30, 2018, respectively, and $667,000 and $1,996,000 for the three and nine months ended September 30, 2017, respectively.  Included in these fees are $307,000 and $915,000 of property management costs for the three and nine months ended September 30, 2018, respectively, and $287,000 and $857,000 for the three and nine months ended September 30, 2017, respectively.  The property management fee portion of the compensation and services agreement is paid based on 1.5% and 2.0% of the rental payments (including tenant reimbursements) actually received by the Company from net lease tenants and operating lease tenants, respectively. The Company does not pay Majestic property management fees with respect to properties managed by third parties. Majestic credits against the fees due to it under the compensation and services agreement any management or other fees received by it from any joint venture in which the Company is a joint venture partner. The compensation and services agreement also provides for an additional payment to Majestic of $54,000 and $162,000 in each of the three and nine months ended September 30, 2018 and 2017, respectively, for the Company’s share of all direct office expenses, including rent, telephone, postage, computer services, internet usage and supplies. The Company does not pay any fees or expenses to Majestic for such services except for the fees described in this paragraph.

Executive officers and others providing services to the Company under the compensation and services agreement were awarded shares of restricted stock and RSUs under the Company’s stock incentive plans (described in Note 14). The related expense charged to the Company’s operations was $483,000 and $1,332,000 for the three and nine months ended September 30, 2018, respectively, and $361,000 and $1,128,000 for  the three and nine months ended September 30, 2017, respectively.

The fees paid under the compensation and services agreement (except for the property management fees which are included in Real estate expenses) and the costs of the stock incentive plans are included in General and administrative expense on the consolidated statements of income for the three and nine months ended September 30, 2018 and 2017.

Joint Venture Partners and Affiliates

The Company paid an aggregate of $21,000 and $86,000 for the three and nine months ended September 30, 2018, respectively, and $30,000 and $112,000 for the three and nine months ended September 30, 2017, respectively, to its consolidated joint venture partners or their affiliates (none of whom are officers, directors or employees of the Company) for property management fees, which are included in Real estate expenses on the consolidated statements of income. 

The Company’s unconsolidated joint ventures paid management fees of $39,000 and $135,000 for the three and nine months ended September 30, 2018 , respectively, and $45,000 and $132,000 for the three and nine months ended September 30, 2017, respectively, to the other partner of the venture, which reduced Equity in earnings of $19,000 and $67,000 for the three and nine months ended September 30, 2018, respectively, and $22,000 and $66,000 for the three and nine months ended September 30, 2017, respectively.

Other

During 2018 and 2017, the Company paid quarterly fees of $69,000 to the Company’s chairman and $27,500  to the Company’s vice-chairman. These fees are included in General and administrative expenses on the consolidated statements of income.

The Company obtains its property insurance in conjunction with Gould Investors L.P. (“Gould Investors”), a related party, and reimburses Gould Investors annually for the Company’s insurance cost relating to its properties. Amounts reimbursed to Gould Investors were $912,000 during the three and nine months ended September 30, 2018 and $782,000 during the three and nine months ended September 30, 2017.  Included in Real estate expenses on the consolidated statements of income is insurance expense of $241,000 and $646,000 for the three and nine months ended September 30, 2018, respectively, and $204,000 and $551,000 for the three and nine months ended September 30, 2017, respectively.  The balance of the amounts reimbursed to Gould Investors represents prepaid insurance at September 30, 2018 and is included in Other assets on the consolidated balance sheets. 

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Common Stock Cash Dividend

9 Months Ended

Sep. 30, 2018

Common Stock Cash Dividend

Common Stock Cash Dividend

Note 12 – Common Stock Cash Dividend

On September 13, 2018, the Board of Directors declared a quarterly cash dividend of $.45 per share on the Company’s common stock, totaling $8,694,000. The quarterly dividend was paid on October 4, 2018 to stockholders of record on September 25, 2018.

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Shares Issued through Equity Offering Program

9 Months Ended

Sep. 30, 2018

Shares Issued through Equity Offering Program

Shares Issued through Equity Offering Program

Note 13 – Shares Issued through Equity Offering Program

During the nine months ended September 30, 2018, the Company sold 126,300 shares for proceeds of $3,245,000, net of commissions of $33,000, and incurred offering costs of $75,000 for professional fees. 

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Stock Based Compensation

9 Months Ended

Sep. 30, 2018

Stock Based Compensation

Stock Based Compensation

Note 14 – Stock Based Compensation

The Company’s 2016 Incentive Plan (‘‘Plan’’), approved by the Company’s stockholders in June 2016, permits the Company to grant, among other things, stock options, restricted stock, RSUs, performance share awards and dividend equivalent rights and any one or more of the foregoing to its employees, officers, directors and consultants. A maximum of 750,000 shares of the Company’s common stock is authorized for issuance pursuant to this Plan.  As of September 30, 2018, (i) restricted stock awards with respect to 284,850 shares had been issued, of which 300 shares were forfeited and 3,000 shares had vested, and (ii) as further described below, RSUs with respect to 152,500 shares had been issued and are outstanding.

Under the Company’s 2012 Incentive Plan,  as of September 30, 2018, 500,700 shares had been issued, of which 3,550 shares were forfeited and 127,450 shares had vested.  No additional awards may be granted under this plan.

For accounting purposes, the restricted stock is not included in the shares shown as outstanding on the balance sheet until they vest; however, dividends are paid on the unvested shares. The restricted stock grants are charged to General and administrative expense over the respective vesting periods based on the market value of the common stock on the grant date. Unless earlier forfeited because the participant’s relationship with the Company terminated, unvested restricted stock awards vest on the fifth anniversary of the grant date, and under certain circumstances may vest earlier.

In each of 2017 and 2018, the Company granted RSUs exchangeable for up to 76,250 shares of common stock upon satisfaction, through June 30, 2020 and June 30, 2021, respectively, of specified conditions.  Specifically, up to 50% of these RSUs vest upon achievement of metrics related to average annual total stockholder return (the “TSR Awards”), which metrics meet the definition of a market condition, and up to 50% vest upon achievement of metrics related to average annual return on capital (the “ROC Awards”), which metrics meet the definition of a performance condition.  The holders of the RSUs are not entitled to dividends or to vote the underlying shares until such RSUs vest and shares are issued.  Accordingly, the shares underlying these RSUs are not included in the shares shown as outstanding on the balance sheet. For the TSR awards, a third party appraiser prepared a Monte Carlo simulation pricing model to determine the fair value, which is recognized ratably over the service period. The Monte Carlo valuation consisted of computing the grant date fair value of the awards using the Company's simulated stock price. For the July 2018 TSR awards, the per unit or share fair value was estimated using the following assumptions: an expected life of three years, a dividend rate of 6.82%, a risk-free interest rate of 2.18% - 2.70% and an expected price volatility of 22.29% - 25.99%. The expected price volatility was calculated based on historical and implied volatility. For the ROC Awards, the fair value is based on the market value on the date of grant and the performance assumptions are re-evaluated quarterly. Expense is not recognized on the RSUs which the Company does not expect to vest as a result of service conditions or the Company's performance expectations.

As of September 30, 2018, based on performance and market assumptions, the fair value of the RSUs granted in 2017 and 2018 is $1,066,000 and $1,136,000, respectively. Recognition of such deferred compensation expense will be charged to General and administrative expense over the respective three year performance cycle. None of these RSUs were forfeited or vested during the nine months ended September 30, 2018.

In 2010, RSUs exchangeable for up to 200,000 shares of common stock were awarded pursuant to the Company’s 2009 Incentive Plan. The holders of RSUs were not entitled to dividends or to vote the underlying shares until the RSUs vested and the underlying shares were issued. During 2017, 113,584 shares of common stock underlying the RSUs were deemed to have vested and were issued.  RSUs with respect to the balance of 86,416 shares were forfeited.

The following is a summary of the activity of the equity incentive plans:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Restricted stock grants:
Number of shares		—		—		144,750		140,100
Average per share grant price		—		—	$	25.31	$	24.75
Deferred compensation to be recognized over vesting period		—		—	$	3,664,000	$	3,467,000
Number of non-vested shares:
Non-vested beginning of period		651,500		612,900		612,900		591,750
Grants		—		—		144,750		140,100
Vested during period		—		—		(106,000)		(118,450)
Forfeitures		(250)		—		(400)		(500)
Non-vested end of period		651,250		612,900		651,250		612,900
RSU grants:
Number of underlying shares		76,250		76,250		76,250		76,250
Average per share grant price	$	26.41	$	24.03	$	26.41	$	24.03
Deferred compensation to be recognized over vesting period	$	1,136,000	$	919,000	$	1,136,000	$	919,000
Number of non-vested shares:
Non-vested beginning of period		76,250		—		76,250		200,000
Grants		76,250		76,250		76,250		76,250
Vested during period		—		—		—		(113,584)
Forfeitures		—		—		—		(86,416)
Non-vested end of period		152,500		76,250		152,500		76,250
Restricted stock and RSU grants:
Weighted average per share value of non-vested shares (based on grant price)	$	23.83	$	22.89	$	23.83	$	22.89
Value of stock vested during the period (based on grant price)	$	—	$	—	$	2,289,000	$	3,008,000
Weighted average per share value of shares forfeited during the period (based on grant price)	$	23.39	$	—	$	23.59	$	8.37
The total charge to operations:
Outstanding restricted stock grants	$	763,000	$	684,000	$	2,263,000	$	2,255,000
Outstanding RSUs		208,000		—		390,000		86,000
Total charge to operations	$	971,000	$	684,000	$	2,653,000	$	2,341,000

As of September 30, 2018, total compensation costs of $7,581,000 and $1,717,000 related to non-vested restricted stock awards and RSUs, respectively, have not yet been recognized.  These compensation costs will be charged to General and administrative expense over the remaining respective vesting periods. The weighted average vesting period is 2.4 years for the restricted stock and 2.3 years for the RSUs.  

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Fair Value Measurements

9 Months Ended

Sep. 30, 2018

Fair Value Measurements

Fair Value Measurements

Note 15 – 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 (excluding interest rate swaps), dividends payable, and accrued expenses and other liabilities (excluding interest rate swaps), are not measured at fair value on a recurring basis, but are considered to be recorded at amounts that approximate fair value.

At September 30, 2018, the $392,836,000 estimated fair value of the Company’s mortgages payable is less than their $407,007,000 carrying value (before unamortized deferred financing costs) by approximately $14,171,000 assuming a blended market interest rate of 4.90% based on the 8.5 year weighted average remaining term to maturity of the mortgages.  At December 31, 2017, the $397,103,000 estimated fair value of the Company’s mortgages payable is greater than their $396,946,000 carrying value (before unamortized deferred financing costs) by approximately $157,000 assuming a blended market interest rate of 4.25% based on the 8.7 year weighted average remaining term to maturity of the mortgages.

At September 30, 2018 and December 31, 2017, the carrying amount of the Company’s line of credit (before unamortized deferred financing costs) of $0 and $9,400,000, respectively, 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.

Fair Value on a Recurring Basis

The fair value of the Company’s derivative financial instruments, using Level 2 inputs, was determined to be the following (amounts in thousands):

	As of	Carrying and Fair Value
Financial assets:
Interest rate swaps	September 30, 2018	$	4,793
	December 31, 2017		1,615
Financial liabilities:
Interest rate swaps	September 30, 2018	$	—
	December 31, 2017		1,492

The Company does not own any financial instruments that are measured on a recurring basis and that are classified as Level 1 or 3.

The Company’s objective in using interest rate swaps is to add stability to interest expense. The Company does not use derivatives for trading or speculative purposes.

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 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 September 30, 2018, the Company has assessed and determined the impact of the credit valuation adjustments on the overall valuation of its derivative positions is not significant.  As a result, the Company determined its derivative valuation is classified in Level 2 of the fair value hierarchy.

As of September 30, 2018, the Company had entered into 28 interest rate derivatives, all of which were interest rate swaps, related to 28 outstanding mortgage loans with an aggregate $130,100,000 notional amount and mature between 2019 and 2028 (weighted average remaining term to maturity of 6.4 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 3.02% to 5.38% and a weighted average interest rate of 4.13% at September 30, 2018). The fair values of the Company’s derivatives in asset and liability positions are reflected as other assets or other liabilities on the consolidated balance sheets.

In connection with the sale of two unconsolidated joint venture properties located in Savannah, Georgia and Milwaukee, Wisconsin, the Company terminated two interest rate swaps when the related mortgages were paid off in April 2018 and July 2018, respectively (see Note 7). See discussion below for the discontinuation of hedge accounting on one of these interest rate swaps during the nine months ended September 30, 2018.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
One Liberty Properties, Inc. and Consolidated subsidiaries
Amount of gain (loss) recognized on derivatives in Other comprehensive income	$	827	$	(248)	$	4,336	$	(1,234)
Amount of reclassification from Accumulated other comprehensive income into Interest expense		(44)		(352)		(335)		(1,406)
Unconsolidated Joint Ventures (Company’s share)
Amount of gain (loss)  recognized on derivatives in Other comprehensive income	$	—	$	(2)	$	69	$	(14)
Amount of reclassification from Accumulated other comprehensive income into Equity in earnings of unconsolidated joint ventures		—		(13)		103		(48)

During the nine months ended September 30, 2018 and 2017, the Company (including one of its unconsolidated joint ventures) discontinued hedge accounting on two interest rate swaps as the forecasted hedged transactions were no longer probable of occurring. As a result, during the nine months ended September 30, 2018 and 2017, the Company reclassified $110,000 and $118,000 of realized gain and loss, respectively, from Accumulated other comprehensive income to earnings. No gain or loss was recognized with respect to amounts excluded from effectiveness testing on the Company’s cash flow hedges for the three and nine months ended September 30, 2018 and 2017.

During the twelve months ending September 30, 2019, the Company estimates an additional $503,000 will be reclassified from other Accumulated other comprehensive income as a decrease to Interest expense.

The derivative agreements in effect at September 30, 2018 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 the derivative agreements and if there is a default by the subsidiary on the loan subject to the derivative agreement to which the Company is a party and if there are swap breakage losses on account of the derivative being terminated early, then the Company could be held liable for such swap breakage losses, if any.

As of December 31, 2017, the fair value of the derivatives in a liability position, including accrued interest of $53,000, but excluding any adjustments for nonperformance risk, was approximately $1,638,000.  In the event the Company had breached any of the contractual provisions of the derivative contracts, it would have been required to settle its obligations thereunder at their termination liability value of $1,638,000. This termination liability value, net of adjustments for nonperformance risk of $93,000, is included in Accrued expenses and other liabilities on the consolidated balance sheet at December 31, 2017.  At September 30, 2018, there were no derivatives in a liability position.

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Commitments

9 Months Ended

Sep. 30, 2018

Commitments

Commitments

Note 16 – Commitments

As of September 30, 2018, the remaining amount the Company is contractually required to expend for building expansion and improvements at its property tenanted by L-3 Technologies, located in Hauppauge, New York, is approximately $960,000.

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New Accounting Pronouncements

9 Months Ended

Sep. 30, 2018

New Accounting Pronouncements

New Accounting Pronouncements

Note 17 – New Accounting Pronouncements

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework –  Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. The Company is evaluating the new guidance to determine if, and to the extent, it will impact the Company's consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments made to non-employees so that the accounting for such payments is substantially the same as those made to employees, with certain exceptions. Under this ASU, equity-classified share-based awards to non-employees will be measured at fair value on the grant date of the awards and entities will assess the probability of satisfying performance conditions if any are present.  Awards will continue to be classified according to ASC 718 upon vesting which eliminates the need to reassess classification upon vesting, consistent with awards granted to employees, unless the award is modified after the service has been rendered, any other conditions necessary to earn the right to benefit from the instruments have been satisfied, and the nonemployee is no longer providing services. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. The Company early adopted this guidance on July 1, 2018 using the modified retrospective transition method. The adoption of ASU 2018-07 did not have an impact on the Company’s consolidated financial statements.

In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which amends the presentation and disclosure requirements for hedge accounting and changes how companies assess hedge effectiveness. This ASU is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs.  The Company early adopted this guidance on January 1, 2018 using the modified retrospective transition method and its adoption did not have any impact on the Company’s previously reported income from operations, net income or accumulated undistributed net income for the periods presented. 

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current “incurred loss” model with an “expected loss” approach. The guidance is effective for fiscal years, and interim periods within those fiscal years,  beginning after December 15, 2019. Early adoption is permitted after December 2018. The Company is evaluating the new guidance to determine if, and to the extent, it will impact the consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases, and in July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842), Targeted Improvements, and 2018-10, Codification Improvements to Topic 842, Leases.  These standards require lessees to recognize (i) lease assets and lease liabilities for those leases which were previously classified as operating leases under ASC 840, Leases, and (ii) expense based on the effective interest method for finance leases or on a straight-line basis for operating leases.  Lessor accounting, inclusive of the effect of a practical expedient offered in ASU No. 2018-11 (which the Company expects to adopt and apply to most of its leases), which allows lessors to not separate non-lease components from the related lease components under certain conditions, will remain largely unchanged as under the previous standard, ASC 840. The Company is currently evaluating these new standards but does not expect them to have a significant effect on its consolidated financial statements. The effective date of these standards will be fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and early adoption is permitted. The Company will adopt these standards effective as of January 1, 2019 using the modified retrospective approach and anticipates electing the package of practical expedients that allows an entity to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The new model requires revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. In July 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU No. 2014-09 by one year. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations.  ASU No. 2014-09, ASU No. 2015-14 and ASU No. 2016-08 are herein collectively referred to as the “New Revenue Recognition Standards”. The Company adopted the New Revenue Recognition Standards on January 1, 2018 using the modified retrospective transition method.  The Company’s main revenue streams are rental revenues and tenant reimbursements.  Such revenues are related to lease contracts with tenants which currently fall within the scope of ASC Topic 840, and will fall within the scope of ASC Topic 842 upon the adoption of ASU No. 2016-02 on January 1, 2019 (the Company’s sales of real estate are within the scope of ASU No. 2017-05, see Note 5).  Accordingly, the adoption of the New Revenue Recognition Standards did not (i) result in a cumulative adjustment as of January 1, 2018, and (ii) have any impact on the Company’s consolidated financial statements.

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events

Subsequent Events

Note 18 – Subsequent Events

Subsequent events have been evaluated and except as disclosed herein, there were no other events relative to the consolidated financial statements that require additional disclosure.

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Summary Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Summary Accounting Policies

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 of a normal recurring nature necessary for fair presentation have been included. The results of operations for the three and nine months ended September 30, 2018 and 2017 are not necessarily indicative of the results for the full year. These statements should be read in conjunction with the consolidated financial statements and related notes included in OLP’s Annual Report on Form 10-K for the year ended December 31, 2017.

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

The consolidated financial statements include the accounts and operations of OLP, its wholly-owned subsidiaries, its joint ventures in which the Company, as defined, has a controlling interest, and variable interest entities (“VIEs”) of which the Company is the primary beneficiary.  OLP and its consolidated subsidiaries are referred to herein as the “Company”.   Material intercompany items and transactions have been eliminated in consolidation.

Investment in Joint Ventures and Variable Interest Entities

Investment in Joint Ventures and Variable Interest Entities

The Financial Accounting Standards Board, or FASB, provides guidance for determining whether an entity is a VIE.  VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A VIE is required to be consolidated by its primary beneficiary, which is the party that (i) has the power to control the activities that most significantly impact the VIE’s economic performance and (ii) has the obligation to absorb losses, or the right to receive benefits, of the VIE that could potentially be significant to the VIE.

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

The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting. All investments in unconsolidated joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result, none of these joint ventures are VIEs. In addition, the Company shares power with its co-managing members 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.

The Company periodically reviews its investments in unconsolidated joint ventures for other-than-temporary losses in investment value. Any decline that is not expected to be recovered based on the underlying assets of the investment is considered other than temporary and an impairment charge is recorded as a reduction in the carrying value of the investment. During the three and nine months ended September 30, 2018 and 2017, there were no impairment charges related to the Company’s investments in unconsolidated joint ventures.

The Company has elected to follow the cumulative earnings approach when assessing, for the consolidated statement of cash flows, whether the distribution from the investee is a return of the investor’s investment as compared to a return on its investment. The source of the cash generated by the investee to fund the distribution is not a factor in the analysis (that is, it does not matter whether the cash was generated through investee refinancing, sale of assets or operating results). Consequently, the investor only considers the relationship between the cash received from the investee to its equity in the undistributed earnings of the investee, on a cumulative basis, in assessing whether the distribution from the investee is a return on or a return of its investment. Cash received from the unconsolidated entity is presumed to be a return on the investment to the extent that, on a cumulative basis, distributions received by the investor are less than its share of the equity in the undistributed earnings of the entity.

Reclassifications

Reclassifications

Certain amounts previously reported in the consolidated financial statements have been reclassified in the accompanying consolidated financial statements to conform to the current period’s presentation.  Such reclassifications primarily relate to the presentation of (i) Gain on sale of real estate, net, on the consolidated statement of income for the three and nine months ended September 30, 2017 and (ii) restricted cash on the consolidated statement of cash flows for the nine months ended September 30, 2017.

The Company has included Gain on sale of real estate, net, as a component of Operating income, to present gains and losses on sales of properties in accordance with ASC 360-10-45-5. The change was made for the prior periods as the Securities and Exchange Commission has eliminated Rule 3-15(a) of Regulation S-X as part of Release Nos. 33-10532, 34-83875 and IC-33203, which had required REITs to present gains and losses on sales of properties outside of continuing operations in the income statement.

As of January 1, 2018, the Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires amounts generally described as restricted cash to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The adoption of this ASU has no impact on the Company’s previously reported consolidated balance sheets, consolidated statements of income, net income or accumulated undistributed net income for the periods presented.

As a result of the adoption of this guidance, the following table depicts the adjustments to the Company’s previously reported consolidated statement of cash flows (amounts in thousands):

	Nine Months Ended
	September 30, 2017
	As Reported		As Adjusted
Decrease in escrow, deposits, and other assets and receivables	$	165	$	273
Increase in accrued expenses and other liabilities		1,377		1,264
Net decrease in cash, cash equivalents and restricted cash		(2,494)		(2,499)
Cash, cash equivalents and restricted cash at beginning of year		17,420		18,450
Cash, cash equivalents and restricted cash at end of period		14,926		15,951

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (amounts in thousands):

	September 30,
	2018		2017
Cash and cash equivalents	$	17,173	$	14,926
Restricted cash		379		530
Restricted cash included in escrow, deposits and other assets and receivables		252		495
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows	$	17,804	$	15,951

Amounts included in restricted cash represent the cash reserve balance received from an owner/operator at one of the Company’s ground leases to cover certain unit renovation work (see Note 6). Restricted cash included in escrow, deposits and other assets and receivables represent amounts related to real estate tax and other reserve escrows required to be held by lenders in accordance with the Company’s mortgage agreements.  The restriction on these escrow reserves will lapse when the related mortgage is repaid.

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Summary Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Summary Accounting Policies

Schedule of table depicts the adjustments to the Company's previously reported consolidated statement of cash flows

As a result of the adoption of this guidance, the following table depicts the adjustments to the Company’s previously reported consolidated statement of cash flows (amounts in thousands):

	Nine Months Ended
	September 30, 2017
	As Reported		As Adjusted
Decrease in escrow, deposits, and other assets and receivables	$	165	$	273
Increase in accrued expenses and other liabilities		1,377		1,264
Net decrease in cash, cash equivalents and restricted cash		(2,494)		(2,499)
Cash, cash equivalents and restricted cash at beginning of year		17,420		18,450
Cash, cash equivalents and restricted cash at end of period		14,926		15,951

Schedule of reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (amounts in thousands):

	September 30,
	2018		2017
Cash and cash equivalents	$	17,173	$	14,926
Restricted cash		379		530
Restricted cash included in escrow, deposits and other assets and receivables		252		495
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows	$	17,804	$	15,951

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Common Share

Schedule of impact to the diluted weighted average number of shares of common stock related to the RSUs

		Three and Nine			Three and Nine
		Months Ended			Months Ended
		September 30, 2018			September 30, 2017
Date of Award and		Return on	Stockholder		Return on	Stockholder
Total Number of		Capital	Return		Capital	Return
Underlying Shares		metric	metric	Total	metric	metric	Total
September 26, 2017
76,250 shares	(a)	33,524	38,125	71,649	38,125	—	38,125
July 1, 2018
76,250 shares	(b)	30,929	—	30,929	n/a	n/a	n/a
		64,453	38,125	102,578	38,125	—	38,125

(a) Includes shares that would be issued pursuant to the respective metrics, assuming the end of the quarterly period was the June 30, 2020 vesting date. None of the remaining 4,601 shares and 38,125 shares are included at September 30, 2018 and 2017, respectively, as the applicable metrics had not been met for these shares.

(b) Includes shares that would be issued pursuant to the respective metrics, assuming the end of the quarterly period was the June 30, 2021 vesting date. None of the remaining 45,321 shares are included at September 30, 2018, as the applicable metrics had not been met for these shares.

Schedule of reconciliation of the 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				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Numerator for basic and diluted earnings per share:
Net income	$	10,182	$	7,128	$	21,381	$	20,007
Less net income attributable to non-controlling interests		(35)		(23)		(866)		(65)
Less earnings allocated to unvested restricted stock (a)		(342)		(263)		(879)		(796)
Net income available for common stockholders: basic and diluted	$	9,805	$	6,842	$	19,636	$	19,146
Denominator for basic earnings per share:
Weighted average number of common shares		18,646		18,000		18,521		17,859
Effect of dilutive securities:
RSUs		59		79		41		102
Denominator for diluted earnings per share:
Weighted average number of shares		18,705		18,079		18,562		17,961
Earnings per common share, basic	$	.53	$	.38	$	1.06	$	1.07
Earnings per common share, diluted	$	.52	$	.38	$	1.06	$	1.07

(a) Represents an allocation of distributed earnings to unvested restricted stock which, as participating securities, are entitled to receive dividends.

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Real Estate Acquisitions (Tables)

9 Months Ended

Sep. 30, 2018

Real Estate Acquisitions

Schedule of the Company's acquisitions of real estate

The following chart details the Company’s acquisitions of real estate during the nine months ended September 30, 2018 (amounts in thousands):

					Capitalized
					Third Party
		Contract			Real Estate
		Purchase		Terms of	Acquisition
Description of Property	Date Acquired	Price		Payment	Costs
Campania International/U.S. Tape industrial facility, Pennsburg, Pennsylvania	March 28, 2018	$	12,675	All cash (a)	$	227
Plymouth Industries industrial facility, Plymouth, Minnesota	June 7, 2018		5,500	All cash (b)		50
Totals		$	18,175		$	277

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

The following chart details the allocation of the purchase price for the Company’s acquisitions of real estate during the nine months ended September 30, 2018 (amounts in thousands):

					Building
Description of Property	Land		Building		Improvements		Total
Campania International/U.S. Tape industrial facility, Pennsburg, Pennsylvania	$	1,776	$	10,399	$	727	$	12,902
Plymouth Industries industrial facility, Plymouth, Minnesota		1,121		4,306		123		5,550
Totals	$	2,897	$	14,705	$	850	$	18,452

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Sales of Properties (Tables)

9 Months Ended

Sep. 30, 2018

Sales of Properties

Schedule of sale of real estate property

The following chart details the Company’s sales of real estate during the nine months ended September  30, 2018 and 2017 (amounts in thousands):

		Gross		Gain on Sale of Real
Description of Property	Date Sold	Sales Price		Estate, Net
Retail property,
Fort Bend, Texas (a)	January 30, 2018	$	9,200	$	2,408
Land,
Lakemoor, Illinois	September 14, 2018		8,459		4,585	(b)
Totals – nine months ended September 30, 2018		$	17,659	$	6,993
Retail property,
Greenwood Village, Colorado	May 8, 2017	$	9,500	$	6,568
Retail property,
Kansas City, Missouri (c)	July 14, 2017		10,250		2,180
Retail property,
Niles, Illinois	August 31, 2017		5,000		1,089
Totals – nine months ended September 30, 2017		$	24,750	$	9,837

(a) This property was owned by a consolidated joint venture in which the Company held an 85% interest. The non-controlling interest’s share of the gain was $776.

(b) Includes $5,717, representing the unamortized balance of a $5,906 fixed rent payment which was received and recorded as deferred income in November 2017 and was to be included in rental income over the term of the lease.

(c) See Note 15 for information on the early termination of the interest rate swap derivative associated with the mortgage that was paid off on this property. 

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Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures (Tables)

9 Months Ended

Sep. 30, 2018

Unconsolidated JV

Schedule of Variable Interest Entities through Ground Leases and Carrying Amount and Maximum Exposure to Loss

The following chart details the VIEs through the Company’s ground leases and the aggregate carrying amount and maximum exposure to loss as of September 30, 2018 (dollars in thousands):

					Owner/			Carrying
		Land			Operator			Amount and
		Contract		# Units in	Mortgage			Maximum
		Purchase		Apartment	from		Type of	Exposure to
Description of Property(a)	Date Acquired	Price		Complex	Third Party(b)		Exposure	Loss
The Briarbrook Village Apartments, Wheaton, Illinois	August 2,2016	$	10,530	342	$	39,411	Land	$	10,536
The Vue Apartments, Beachwood, Ohio	August 16, 2016		13,896	348		67,444	Land		13,901
Totals		$	24,426	690	$	106,855		$	24,437

(a) Simultaneously with each purchase, the Company entered into a triple net ground lease with affiliates of Strategic Properties of North America, the owner/operators of these properties.

(b) Simultaneously with the closing of each acquisition, the owner/operator obtained a mortgage from a third party which, together with the Company’s purchase of the land, provided substantially all of the funds to acquire the complex.  The Company provided its land as collateral for the respective owner/operator’s mortgage loans; accordingly, each land position is subordinated to the applicable mortgage. No other financial support has been provided by the Company to the owner/operator.

Consolidated JV

Summary of our variable interests in identified VIEs

The following is a summary of the consolidated VIEs’ carrying amounts and classification in the Company’s consolidated balance sheets, none of which are restricted (amounts in thousands):

	September 30,		December 31,
	2018		2017 (a)
Land	$	14,722	$	17,844
Buildings and improvements, net of  accumulated depreciation of $3,867 and $3,811, respectively		27,893		31,789
Cash		902		1,145
Unbilled rent receivable		1,196		1,011
Unamortized intangible lease assets, net		932		1,241
Escrow, deposits and other assets and receivables		878		948
Mortgages payable, net of unamortized deferred financing costs of $407 and $442, respectively		27,143		32,252
Accrued expenses and other liabilities		689		870
Unamortized intangible lease liabilities, net		1,770		2,015
Accumulated other comprehensive income (loss)		117		(1)
Non-controlling interests in consolidated joint ventures		1,439		1,742

(a) Includes a consolidated joint venture, in which the Company held an 85% interest, located in Fort Bend, Texas which was sold in January 2018 (see Note 5).

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Debt Obligations (Tables)

9 Months Ended

Sep. 30, 2018

Debt Obligations

Schedule of Mortgages payable, net

The following table details the Mortgages payable, net, balances per the consolidated balance sheets (amounts in thousands):

	September 30,		December 31,
	2018		2017
Mortgages payable, gross	$	407,007	$	396,946
Unamortized deferred financing costs		(4,029)		(3,789)
Mortgages payable, net	$	402,978	$	393,157

Schedule of Line of credit, net

The following table details the Line of credit, net, balances per the consolidated balance sheets (amounts in thousands):

	September 30,		December 31,
	2018 (a)		2017
Line of credit, gross	$	—	$	9,400
Unamortized deferred financing costs		—		(624)
Line of credit, net	$	—	$	8,776

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Stock Based Compensation (Tables)

9 Months Ended

Sep. 30, 2018

Stock Based Compensation

Summary of the activity of the equity incentive plans

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Restricted stock grants:
Number of shares		—		—		144,750		140,100
Average per share grant price		—		—	$	25.31	$	24.75
Deferred compensation to be recognized over vesting period		—		—	$	3,664,000	$	3,467,000
Number of non-vested shares:
Non-vested beginning of period		651,500		612,900		612,900		591,750
Grants		—		—		144,750		140,100
Vested during period		—		—		(106,000)		(118,450)
Forfeitures		(250)		—		(400)		(500)
Non-vested end of period		651,250		612,900		651,250		612,900
RSU grants:
Number of underlying shares		76,250		76,250		76,250		76,250
Average per share grant price	$	26.41	$	24.03	$	26.41	$	24.03
Deferred compensation to be recognized over vesting period	$	1,136,000	$	919,000	$	1,136,000	$	919,000
Number of non-vested shares:
Non-vested beginning of period		76,250		—		76,250		200,000
Grants		76,250		76,250		76,250		76,250
Vested during period		—		—		—		(113,584)
Forfeitures		—		—		—		(86,416)
Non-vested end of period		152,500		76,250		152,500		76,250
Restricted stock and RSU grants:
Weighted average per share value of non-vested shares (based on grant price)	$	23.83	$	22.89	$	23.83	$	22.89
Value of stock vested during the period (based on grant price)	$	—	$	—	$	2,289,000	$	3,008,000
Weighted average per share value of shares forfeited during the period (based on grant price)	$	23.39	$	—	$	23.59	$	8.37
The total charge to operations:
Outstanding restricted stock grants	$	763,000	$	684,000	$	2,263,000	$	2,255,000
Outstanding RSUs		208,000		—		390,000		86,000
Total charge to operations	$	971,000	$	684,000	$	2,653,000	$	2,341,000

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Measurements

Schedule of derivative financial instruments measured at fair value, using Level 2 inputs

The fair value of the Company’s derivative financial instruments, using Level 2 inputs, was determined to be the following (amounts in thousands):

	As of	Carrying and Fair Value
Financial assets:
Interest rate swaps	September 30, 2018	$	4,793
	December 31, 2017		1,615
Financial liabilities:
Interest rate swaps	September 30, 2018	$	—
	December 31, 2017		1,492

Schedule of effect of derivative financial instruments on statements of income

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
One Liberty Properties, Inc. and Consolidated subsidiaries
Amount of gain (loss) recognized on derivatives in Other comprehensive income	$	827	$	(248)	$	4,336	$	(1,234)
Amount of reclassification from Accumulated other comprehensive income into Interest expense		(44)		(352)		(335)		(1,406)
Unconsolidated Joint Ventures (Company’s share)
Amount of gain (loss)  recognized on derivatives in Other comprehensive income	$	—	$	(2)	$	69	$	(14)
Amount of reclassification from Accumulated other comprehensive income into Equity in earnings of unconsolidated joint ventures		—		(13)		103		(48)

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Organization and Background (Details)	Sep. 30, 2018 state property
Organization and Background
Number of real estate properties	118
Number of states in which properties are located | state	30
Properties owned by consolidated joint ventures
Organization and Background
Number of real estate properties	5
Unconsolidated joint ventures
Organization and Background
Number of real estate properties	4

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Summary Accounting Policies - Investment in Joint Ventures and Variable Interest Entities (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) item	Sep. 30, 2017 USD ($)
Investment in Joint Ventures and Variable Interest Entities
Number of Unconsolidated Joint Venture VIEs | item			0
Recourse debt of joint venture	$ 0		$ 0
Impairment charge relating to investments in unconsolidated joint ventures	$ 0	$ 0	$ 0	$ 0

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Summary Accounting Policies - Reclassifications (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017
Reclassifications
Decrease in escrow, deposits, other assets and receivables	$ (1,154)	$ 273
Increase in accrued expenses and other liabilities	(1,400)	1,264
Net decrease in cash, cash equivalents and restricted cash	3,136	(2,499)
Cash, cash equivalents and restricted cash at beginning of year	14,668	18,450
Cash, cash equivalents and restricted cash at end of period	17,804	15,951
Cash and cash equivalents			$ 17,173	$ 13,766	$ 14,926
Restricted cash			379	443	530
Restricted cash included in escrow, deposits and other assets and receivables			252		495
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows	$ 14,668	18,450	$ 17,804	$ 14,668	15,951
Accounting Standards Update 2016-18 | As Previously Reported
Reclassifications
Decrease in escrow, deposits, other assets and receivables		165
Increase in accrued expenses and other liabilities		1,377
Net decrease in cash, cash equivalents and restricted cash		(2,494)
Cash, cash equivalents and restricted cash at beginning of year		17,420
Cash, cash equivalents and restricted cash at end of period		14,926
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows		$ 17,420			$ 14,926

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Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 31, 2017	Jun. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2010
Numerator for basic and diluted earnings per share:
Net income			$ 10,182	$ 7,128	$ 21,381	$ 20,007
Less net income attributable to non-controlling interests			(35)	(23)	(866)	(65)
Less earnings allocated to unvested restricted stock			(342)	(263)	(879)	(796)
Net income available for common stockholders: basic and diluted			$ 9,805	$ 6,842	$ 19,636	$ 19,146
Denominator for basic earnings per share:
Weighted average number of common shares			18,646,000	18,000,000	18,521,000	17,859,000
Effect of dilutive securities:
RSUs			59,000	79,000	41,000	102,000
Denominator for diluted earnings per share: weighted average number of shares			18,705,000	18,079,000	18,562,000	17,961,000
Earnings per common share, basic			$ 0.53	$ 0.38	$ 1.06	$ 1.07
Earnings per common share, diluted			$ 0.52	$ 0.38	$ 1.06	$ 1.07
RSUs
Earnings Per Common Share
Number of shares granted			76,250	76,250	76,250	76,250
Number of shares vested						113,584
2016 Incentive Plan
Earnings Per Common Share
Number of shares included in diluted weighted average number of shares pursuant to return on capital performance metric			64,453	38,125	64,453	38,125
Number of shares in diluted weighted average number of shares pursuant to stockholder return metric			38,125		38,125
Effect of dilutive securities:
RSUs			102,578	38,125	102,578	38,125
2016 Incentive Plan | September 26, 2017
Earnings Per Common Share
Number of shares included in diluted weighted average number of shares pursuant to return on capital performance metric			33,524	38,125	33,524	38,125
Number of shares in diluted weighted average number of shares pursuant to stockholder return metric			38,125		38,125
Common Shares not included Attributable To Share Based Payment Arrangements Due To Applicable Return On Metric					4,601	38,125
Effect of dilutive securities:
RSUs			71,649	38,125	71,649	38,125
2016 Incentive Plan | July 1, 2018
Earnings Per Common Share
Number of shares included in diluted weighted average number of shares pursuant to return on capital performance metric			30,929		30,929
Common Shares not included Attributable To Share Based Payment Arrangements Due To Applicable Return On Metric					45,321
Effect of dilutive securities:
RSUs			30,929		30,929
2009 Incentive Plan | RSUs
Earnings Per Common Share
Number of shares granted							200,000
Number of shares vested		113,584
Number of shares issued	113,584

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Real Estate Acquisitions (Details) - USD ($)	1 Months Ended		9 Months Ended
	Sep. 30, 2018	Jul. 31, 2018	Sep. 30, 2018	Nov. 01, 2018	Oct. 19, 2018
Real Estate Acquisitions
Contract Purchase Price			$ 18,175,000
Capitalized Third Party Real Estate Acquisition	$ 277,000		277,000
Allocation of purchase price for the company's real estate acquisitions
Land	2,897,000		2,897,000
Building	14,705,000		14,705,000
Building Improvements	850,000		850,000
Total	18,452,000		18,452,000
Campania International/U.S. Tape industrial facility, Pennsburg, Pennsylvania
Real Estate Acquisitions
Contract Purchase Price			12,675,000
Capitalized Third Party Real Estate Acquisition	227,000		227,000
New mortgage debt		$ 8,238,000
Allocation of purchase price for the company's real estate acquisitions
Land	1,776,000		1,776,000
Building	10,399,000		10,399,000
Building Improvements	727,000		727,000
Total	12,902,000		12,902,000
Plymouth Industries Industrial Facility Plymouth Minnesota
Real Estate Acquisitions
Contract Purchase Price			5,500,000
Capitalized Third Party Real Estate Acquisition	50,000		50,000
New mortgage debt	3,325,000
Allocation of purchase price for the company's real estate acquisitions
Land	1,121,000		1,121,000
Building	4,306,000		4,306,000
Building Improvements	123,000		123,000
Total	$ 5,550,000		$ 5,550,000
Industrial/Office Property, Englewood, Colorado
Real Estate Acquisitions
Acquisition cost of real estate property through sale and lease back					$ 12,800,000
Initial term of lease					12 years
Industrial Property, Moorestown, New Jersey
Real Estate Acquisitions
Acquisition cost of real estate property				$ 7,350,000
Initial term of lease				9 years 6 months

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Sales of Properties (Details) - USD ($) $ in Thousands						9 Months Ended
	Sep. 14, 2018	Jan. 30, 2018	Aug. 31, 2017	Jul. 14, 2017	May 08, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Nov. 30, 2017
Sales of Properties
Total sales price, net of closing costs						$ 17,417	$ 24,093
Sale of real estate
Sales of Properties
Gross Sales Price						17,659	24,750
Gain on Sales of Real Estate, Net						$ 6,993	$ 9,837
Sale of real estate | Retail Property, Fort Bend, Texas
Sales of Properties
Gross Sales Price		$ 9,200
Gain on Sales of Real Estate, Net		2,408
Sale of real estate | Retail Property, Fort Bend, Texas | Non-Controlling Interests in Consolidated Joint Ventures
Sales of Properties
Non-controlling interest's share of the gain		$ 776
Sale of real estate | Land, Lakemoor, Illinois
Sales of Properties
Gross Sales Price	$ 8,459
Gain on Sales of Real Estate, Net	4,585
Fixed rental payment received and recorded as deferred income	$ 5,717								$ 5,906
Sale of real estate | Retail property, Greenwood Village, Colorado
Sales of Properties
Gross Sales Price					$ 9,500
Gain on Sales of Real Estate, Net					$ 6,568
Sale of real estate | Retail Property, Kansas City, Missouri
Sales of Properties
Gross Sales Price				$ 10,250
Gain on Sales of Real Estate, Net				$ 2,180
Sale of real estate | Retail Property, Niles Illinois
Sales of Properties
Gross Sales Price			$ 5,000
Gain on Sales of Real Estate, Net			$ 1,089
Consolidated JV | Sale of real estate | Retail Property, Fort Bend, Texas | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Sales of Properties
Ownership interest in consolidated joint venture of the company (as a percent)		85.00%						85.00%

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Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures - Ground Leases (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($) item	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) item	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Variable Interest Entities
Number of VIEs through ground leases | item	2		2
Cash Reserves - ground lease	$ 379,000		$ 379,000		$ 443,000
Land, Lakemoor, Illinois
Variable Interest Entities
Revenue from the ground lease	214,000	$ 282,000	800,000	$ 862,000
The Briarbrook Village Apartments, Wheaton, Illinois and Vue Apartments, Beachwood, Ohio
Variable Interest Entities
Land Contract Purchase Price			$ 24,426,000
Units in Apartment Complex | item			690
Owner/ Operator Mortgage from Third Party			$ 106,855,000
Carrying Amount and Maximum Exposure to Loss	24,437,000		24,437,000
The Briarbrook Village Apartments Wheaton, Illinois
Variable Interest Entities
Land Contract Purchase Price			$ 10,530,000
Units in Apartment Complex | item			342
Owner/ Operator Mortgage from Third Party			$ 39,411,000
The Briarbrook Village Apartments Wheaton, Illinois | Land
Variable Interest Entities
Carrying Amount and Maximum Exposure to Loss	10,536,000		10,536,000
The Vue Apartments, Beachwood, Ohio
Variable Interest Entities
Land Contract Purchase Price			$ 13,896,000
Units in Apartment Complex | item			348
Owner/ Operator Mortgage from Third Party			$ 67,444,000
The Vue Apartments, Beachwood, Ohio | Land
Variable Interest Entities
Carrying Amount and Maximum Exposure to Loss	13,901,000		13,901,000
The Briarbrook Village Apartment, Wheaton, Illinois; and Vue Apartment, Beachwood, Ohio
Variable Interest Entities
Revenue from the ground lease	$ 925,000	$ 954,000	$ 2,872,000	$ 2,758,000

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Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures - Consolidated Joint Ventures (Details) - Consolidated JV	9 Months Ended
	Sep. 30, 2018 item
Variable Interest Entities
Number of joint ventures with controlling interest	5
Minimum
Variable Interest Entities
Ownership interest in consolidated joint venture of the company (as a percent)	90.00%
Maximum
Variable Interest Entities
Ownership interest in consolidated joint venture of the company (as a percent)	95.00%

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Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures - Summary of Consolidated VIE's (Details) - USD ($) $ in Thousands		Sep. 30, 2018	Dec. 31, 2017
Consolidated VIEs Carrying Amount of Assets and Liabilities
Land		$ 2,897
Unbilled rent receivable		13,407	$ 14,125
Unamortized intangible lease assets, net		26,326	30,525
Escrow, deposits and other assets and receivables		11,178	6,630
Mortgages payable, net of unamortized deferred financing costs of $407 and $442, respectively		402,978	393,157
Accrued expenses and other liabilities		7,951	16,107
Unamortized intangible lease liabilities, net		15,308	17,551
Accumulated other comprehensive income (loss)		4,781	155
Non-controlling interests in consolidated joint ventures	[1]	1,439	1,742
Consolidated VIE entities
Consolidated VIEs Carrying Amount of Assets and Liabilities
Land		14,722	17,844
Buildings and improvements, net of accumulated depreciation of $3,867 and $3,811, respectively		27,893	31,789
Cash		902	1,145
Unbilled rent receivable		1,196	1,011
Unamortized intangible lease assets, net		932	1,241
Escrow, deposits and other assets and receivables		878	948
Mortgages payable, net of unamortized deferred financing costs of $407 and $442, respectively		27,143	32,252
Accrued expenses and other liabilities		689	870
Unamortized intangible lease liabilities, net		1,770	2,015
Accumulated other comprehensive income (loss)		117	(1)
Non-controlling interests in consolidated joint ventures		1,439	1,742
Accumulated depreciation		3,867	3,811
Unamortized deferred financing costs		$ 407	$ 442

[1] The Company’s consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”). See Note 6. The consolidated balance sheets include the following amounts related to the Company’s consolidated VIEs: $14,722 and $17,844 of land, $27,893 and $31,789 of building and improvements, net of $3,867 and $3,811 of accumulated depreciation, $3,908 and $4,345 of other assets included in other line items, $27,143 and $32,252 of real estate debt, net, $2,459 and $2,885 of other liabilities included in other line items and $1,439 and $1,742 of non-controlling interests as of September 30, 2018 and December 31, 2017, respectively

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Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures - MCB Real Estate, LLC (Details) - Consolidated JV	9 Months Ended	12 Months Ended
	Sep. 30, 2018 USD ($) item	Dec. 31, 2017 USD ($) item	Jan. 30, 2018
Consolidated VIEs Carrying Amount of Assets and Liabilities
Number of joint ventures with controlling interest	5
Sale of real estate | Retail Property, Fort Bend, Texas | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Consolidated VIEs Carrying Amount of Assets and Liabilities
Ownership interest in consolidated joint venture of the company (as a percent)		85.00%	85.00%
MCB Real Estate LLC And Its Affiliates
Consolidated VIEs Carrying Amount of Assets and Liabilities
Number of joint ventures with controlling interest	4	4
Investment in consolidated joint ventures | $	$ 9,859,000	$ 9,705,000

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Investment in Unconsolidated Joint Ventures (Details)		1 Months Ended	3 Months Ended		9 Months Ended
	Apr. 05, 2018 USD ($) item	Jul. 31, 2018 USD ($)	Sep. 30, 2018 USD ($) property	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) property item	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($) property
Investment in Unconsolidated Joint Ventures
Equity in earnings from sale of unconsolidated joint venture properties			$ 1,986,000		$ 2,057,000
Number of unconsolidated joint ventures | item					4
Number of properties owned and operated by each unconsolidated joint venture | property			1		1		1
Investment in unconsolidated joint ventures			$ 10,283,000		$ 10,283,000		$ 10,723,000
Equity in earnings of unconsolidated joint ventures			173,000	$ 212,000	716,000	$ 663,000
Georgia
Investment in Unconsolidated Joint Ventures
Net Proceeds from the sale of property in unconsolidated joint venture	$ 2,600,000
Share of gain from the sale (as a percent)	50.00%
Equity in earnings from sale of unconsolidated joint venture properties	$ 71,000
Acres of land retained | item	5
Wisconsin
Investment in Unconsolidated Joint Ventures
Net Proceeds from the sale of property in unconsolidated joint venture		$ 12,813,000
Repayment of mortgage		$ 6,970,000
Share of gain from the sale (as a percent)		50.00%
Equity in earnings from sale of unconsolidated joint venture properties		$ 1,986,000
Income related to the discontinuance of hedge accounting on a mortgage swap					110,000
MCB Real Estate LLC And Its Affiliates | Unconsolidated joint ventures
Investment in Unconsolidated Joint Ventures
Investment in unconsolidated joint ventures			$ 8,534,000		$ 8,534,000

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Lease Termination Fee (Details) - USD ($)	1 Months Ended	9 Months Ended
	Jul. 31, 2018	Sep. 30, 2017
Lease Termination Fee
Lease termination fee	$ 372,000
Additional Rental Income From Write-Off of Unamortized Intangible Lease Liability And Unbilled Rent Receivable	804,000
Write-off of the unamortized intangible lease liability	878,000
Write-off of unbilled rent receivable	$ 74,000	$ 362,000

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Allowance for Doubtful Accounts (Details) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Jul. 31, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Allowance for Doubtful Accounts
Provision for unbilled rent receivable				$ 1,440,000
Balance in allowance for doubtful accounts						$ 0
Bad debt expense		$ 0		$ 0	$ 310,000
Write-off of unbilled rent receivable	$ 74,000				362,000
Write-off of unamortized intangible lease assets					67,000
Write off of tenant origination costs					884,000
Impairment loss			$ 153,000		153,000
Real Estate Property In Ann Arbor Michigan
Allowance for Doubtful Accounts
Impairment loss			$ 153,000		$ 153,000

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Debt Obligations- Mortgage Payable current (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Mortgages Payable
Mortgages payable, net	$ 402,978,000	$ 393,157,000
Mortgages payable
Mortgages Payable
Mortgages payable, gross	407,007,000	396,946,000
Unamortized deferred financing costs	(4,029,000)	(3,789,000)
Mortgages payable, net	$ 402,978,000	$ 393,157,000

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Debt Obligations - Line of Credit (Details) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Nov. 02, 2018	Dec. 31, 2017
Line of Credit
Line of credit, net				$ 8,776,000
Facility
Line of Credit
Unused facility fee (as a percent)	0.25%
Interest rate during the period (as a percent)	3.62%	2.83%
Line of credit, gross	$ 0			9,400,000
Unamortized deferred financing costs	0			(624,000)
Facility | Credit Facility
Line of Credit
Line of credit, gross			$ 4,000,000	9,400,000
Unamortized deferred financing costs				(624,000)
Line of credit, net				$ 8,776,000
Facility | Credit Facility | ASU 2015-15
Line of Credit
Line of credit, net	0
Amount reclassified unamortized deferred financing costs to escrow, deposits, and other assets and receivables	390,000
Facility | Credit Facility | Maximum
Line of Credit
Borrowing capacity	$ 100,000,000
Facility | LIBOR | Credit Facility
Line of Credit
Spread on variable interest rate (as a percent)	1.75%
Facility | LIBOR | Credit Facility | Maximum
Line of Credit
Spread on variable interest rate (as a percent)	3.00%
Facility | LIBOR | Credit Facility | Minimum
Line of Credit
Spread on variable interest rate (as a percent)	1.75%

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Related Party Transactions (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Related Party Transaction
Share based compensation charged to operations	$ 971,000	$ 684,000	$ 2,653,000	$ 2,341,000
Majestic
Related Party Transaction
Fees under compensation and services agreement	687,000	667,000	2,054,000	1,996,000
Property management costs allocated to real estate expenses	307,000	287,000	915,000	857,000
Additional payment for the entity's share of all direct office expenses	54,000	54,000	162,000	162,000
Executive officers and others
Related Party Transaction
Share based compensation charged to operations	483,000	361,000	1,332,000	1,128,000
Joint venture partners
Related Party Transaction
Real estate property management costs	21,000	30,000	86,000	112,000
Corporate joint venture
Related Party Transaction
Aggregate fees paid to other partners	39,000	45,000	135,000	132,000
Decrease in equity earnings, joint venture transaction	19,000	22,000	67,000	66,000
Chairman | General and administrative expense
Related Party Transaction
Quarterly fees under compensation and services agreement	69,000	69,000
Vice Chairman | General and administrative expense
Related Party Transaction
Quarterly fees under compensation and services agreement	27,500	27,500
Gould Investors L.P.
Related Party Transaction
Amount of insurance reimbursed	912,000	782,000	912,000	782,000
Insurance expense recognized of amounts reimbursed to related party	$ 241,000	$ 204,000	$ 646,000	$ 551,000
Net lease tenants | Majestic
Related Party Transaction
Property management fee (as a percent)			1.50%
Operating lease tenants | Majestic
Related Party Transaction
Property management fee (as a percent)			2.00%

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Common Stock Cash Dividend (Details) - USD ($)		9 Months Ended
	Sep. 13, 2018	Sep. 30, 2018	Sep. 30, 2017
Common Stock Cash Dividend
Quarterly cash dividend declared (in dollars per share)	$ 0.45
Cash dividend declared	$ 8,694,000	$ 25,927,000	$ 23,899,000

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Shares Issued through Equity Offering Program (Details)	9 Months Ended
	Sep. 30, 2018 USD ($) shares
Shares Issued through Equity Offering Program
Number of shares sold (in shares) | shares	126,300
Proceeds from sale of shares, net of commission and before offering costs	$ 3,245,000
Payment of commissions on sale of shares	33,000
Payment of offering costs on sale of shares	$ 75,000

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Stock Based Compensation (Details) - USD ($)	1 Months Ended			3 Months Ended		9 Months Ended		12 Months Ended
	Jul. 31, 2018	Aug. 31, 2017	Jun. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2010
Stock Based Compensation
Expected life	3 years
Total charge to operations:
Share based compensation charged to operations				$ 971,000	$ 684,000	$ 2,653,000	$ 2,341,000
Restricted stock
Stock Based Compensation
Vesting period						5 years
Summary of the activity of the incentive plans
Average per share grant price (in dollars per share)						$ 25.31	$ 24.75
Deferred compensation to be recognized over vesting period						$ 3,664,000	$ 3,467,000
Non-vested beginning of year (in shares)	651,500			651,500	612,900	612,900	591,750
Number of non-vested shares:
Non-vested beginning of year (in shares)	651,500			651,500	612,900	612,900	591,750
Number of shares granted						144,750	140,100
Vested during year (in shares)						(106,000)	(118,450)
Forfeitures (in shares)				(250)		(400)	(500)
Non-vested end of year (in shares)			612,900	651,250	612,900	651,250	612,900
Restricted stock and RSU grants:
Weighted average per share value of non-vested shares (based on grant price) (in dollars per share)				$ 23.83	$ 22.89	$ 23.83	$ 22.89
Value of stock vested during the year (based on grant price)						$ 2,289,000	$ 3,008,000
Weighted average per share value of shares forfeited during the year (based on grant price) (in dollars per share)				$ 23.39		$ 23.59	$ 8.37
Total charge to operations:
Share based compensation charged to operations				$ 763,000	$ 684,000	$ 2,263,000	$ 2,255,000
Compensation costs related to non-vested awards that have not yet been recognized				$ 7,581,000		$ 7,581,000
Approximate weighted average vesting period						2 years 4 months 24 days
RSUs
Stock Based Compensation
Percentage of units to be vested on satisfaction of performance criteria of average total stockholder return						50.00%
Percent of number of units to be vested on satisfaction of performance criteria related to average annual return on capital						50.00%
Summary of the activity of the incentive plans
Average per share grant price (in dollars per share)				$ 26.41	$ 24.03	$ 26.41	$ 24.03
Deferred compensation to be recognized over vesting period				$ 1,136,000	$ 919,000	$ 1,136,000	$ 919,000
Non-vested beginning of year (in shares)	76,250			76,250		76,250	200,000
Number of non-vested shares:
Non-vested beginning of year (in shares)	76,250			76,250		76,250	200,000
Number of shares granted				76,250	76,250	76,250	76,250
Vested during year (in shares)							(113,584)
Forfeitures (in shares)						0	(86,416)
Non-vested end of year (in shares)				152,500	76,250	152,500	76,250
Total charge to operations:
Share based compensation charged to operations				$ 208,000		$ 390,000	$ 86,000
Compensation costs related to non-vested awards that have not yet been recognized				$ 1,717,000		$ 1,717,000
Approximate weighted average vesting period						2 years 3 months 18 days
TSR awards
Stock Based Compensation
Dividend rate	6.82%
Risk-free interest rate minimum	2.18%
Risk-free interest rate maximum	2.70%
Expected price volatility minimum	22.29%
Expected price volatility maximum	25.99%
2016 Incentive Plan
Stock Based Compensation
Maximum number of shares authorized for issuance				750,000		750,000
Shares vested pursuant to Plan						3,000
2016 Incentive Plan | Restricted stock
Stock Based Compensation
Number of shares issued						284,850
Number of non-vested shares:
Forfeitures (in shares)						(300)
2016 Incentive Plan | RSUs
Number of non-vested shares:
Non-vested end of year (in shares)				152,500		152,500
2012 Incentive Plan
Stock Based Compensation
Number of shares issued						500,700
Shares forfeited pursuant to Plan						3,550
Shares vested pursuant to Plan						127,450
Additional awards authorized						0
2009 Incentive Plan | RSUs
Stock Based Compensation
Number of shares issued		113,584
Number of non-vested shares:
Number of shares granted								200,000
Vested during year (in shares)			(113,584)
Pay-for-performance program | 2017 RSU grants | General and administrative expense
Summary of the activity of the incentive plans
Deferred compensation to be recognized over vesting period						$ 1,066,000
Pay-for-performance program | 2018 RSU grants | General and administrative expense
Summary of the activity of the incentive plans
Deferred compensation to be recognized over vesting period						$ 1,136,000

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Fair Value Measurements - Available for Sale (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Recurring | Level 2 | Interest rate swap
Financial assets:
Derivative financial instruments	$ 4,793,000	$ 1,615,000
Financial liabilities:
Derivative financial instruments		1,492,000
Facility
Fair Value of Financial Instruments
Line of credit, gross	0	9,400,000
Mortgages payable
Fair Value of Financial Instruments
Estimated fair value of mortgages payable	392,836,000	397,103,000
Carrying value of mortgage loans	407,007,000	396,946,000
Excess of carrying value over fair value	$ 14,171,000
Excess of fair value over carrying value		$ 157,000
Weighted average remaining term of the mortgages	8 years 6 months	8 years 8 months 12 days
Blended market interest rate | Mortgages payable
Fair Value of Financial Instruments
Mortgages payable	4.90%	4.25%

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Fair Value Measurements - Interest Rate Derivatives (Details) - Interest rate derivatives - Cash flow hedges	9 Months Ended
	Sep. 30, 2018 USD ($) item
Fair Value Measurements
Number of interest rate derivatives held	28
Number of mortgage loans outstanding	28
Number of mortgage loans designated as cash flow hedges	28
Notional Amount | $	$ 130,100,000
Weighted average maturity	6 years 4 months 24 days
Weighted average annual interest rate (as a percent)	4.13%
Minimum
Fair Value Measurements
Fixed Interest Rate (as a percent)	3.02%
Maximum
Fair Value Measurements
Fixed Interest Rate (as a percent)	5.38%

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Fair Value Measurements - Derivative Instruments, Gain (Loss) (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) item	Sep. 30, 2017 USD ($) item	Dec. 31, 2017 USD ($)
Reclassification of gain (loss)
Amount of reclassification from Accumulated other comprehensive income to earnings			$ 110,000
Interest rate swap | Cash flow hedges
Fair Value Measurements
Amount of gain (loss) recognized on derivatives in Other comprehensive income	$ 827,000	$ (248,000)	4,336,000	$ (1,234,000)
Amount of reclassification from Accumulated other comprehensive income into Interest expense	(44,000)	(352,000)	(335,000)	(1,406,000)
Reclassification of gain (loss)
Amount of reclassification from Accumulated other comprehensive income to earnings			110,000	118,000
Amount of effectiveness testing on cash flow hedges	0	0	0	$ 0
Additional amount to be reclassified during the next twelve months			$ 503,000
Number of interest rate swaps | item			2	2
Credit risk related contingent feature
Accrued interest on derivative in a liability position					$ 53,000
Fair value of derivative in a liability position, including accrued interest but excluding adjustments for nonperformance risk					1,638,000
Termination value of derivative agreement					1,638,000
Derivatives in liability position	$ 0		$ 0
Interest rate swap | Cash flow hedges | Accrued expenses and other liabilities
Credit risk related contingent feature
Adjustments for nonperformance risk					$ 93,000
Unconsolidated joint ventures | Interest rate swap | Cash flow hedges
Fair Value Measurements
Amount of gain (loss) recognized on derivatives in Other comprehensive income		(2,000)	69,000	$ (14,000)
Amount of reclassification from Accumulated other comprehensive income into Equity in earnings of unconsolidated joint ventures		$ (13,000)	$ 103,000	$ (48,000)

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Commitments (Details)	Sep. 30, 2018 USD ($)
Building Located In Hauppauge New York
Commitments
Contractual obligation	$ 960,000