UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2020

OR

☐ Transition 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)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	OLP	New York Stock Exchange

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 ⌧ No ◻

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 ⌧ No ◻

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 ◻	Accelerated filer ⌧
Non-accelerated filer ◻	Smaller reporting company ☒
Emerging growth company ☐

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 ◻ No ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

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 2, 2020, the registrant had 20,580,853 shares of common stock outstanding.

One Liberty Properties, Inc. and Subsidiaries

Table of Contents

Part I — Financial Information		Page No.
Item 1.	Unaudited Consolidated Financial Statements
	Consolidated Balance Sheets —September 30, 2020 and December 31, 2019	1
	Consolidated Statements of Income — Three and nine months ended September 30, 2020 and 2019	2
	Consolidated Statements of Comprehensive Income — Three and nine months ended September 30, 2020 and 2019	3
	Consolidated Statements of Changes in Equity — Three and nine months ended September 30, 2020 and 2019	4
	Consolidated Statements of Cash Flows — Nine months ended September 30, 2020 and 2019	6
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39
Part II — Other Information
Item 1A.	Risk Factors	40
Item 6.	Exhibits	41

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,		December 31,
	2020		2019
ASSETS	(Unaudited)
Real estate investments, at cost
Land	$	194,356	$	195,320
Buildings and improvements		651,501		640,517
Total real estate investments, at cost		845,857		835,837
Less accumulated depreciation		143,656		135,302
Real estate investments, net		702,201		700,535
Investment in unconsolidated joint ventures		10,982		11,061
Cash and cash equivalents		14,193		11,034
Unbilled rent receivable		16,518		15,037
Unamortized intangible lease assets, net		26,082		26,068
Escrow, deposits and other assets and receivables		16,754		10,894
Total assets(1)	$	786,730	$	774,629
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net of $4,007 and $4,438 of deferred financing costs, respectively	$	433,088	$	435,840
Line of credit, net of $478 and $619 of deferred financing costs, respectively		16,672		10,831
Dividends payable		9,198		8,966
Accrued expenses and other liabilities		22,311		14,587
Unamortized intangible lease liabilities, net		11,943		12,421
Total liabilities(1)		493,212		482,645
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; 50,000 and 25,000 shares authorized; 19,737 and 19,251 shares issued and outstanding		19,737		19,251
Paid-in capital		310,029		301,517
Accumulated other comprehensive loss		(5,612)		(1,623)
Distributions in excess of net income		(31,850)		(28,382)
Total One Liberty Properties, Inc. stockholders’ equity		292,304		290,763
Non-controlling interests in consolidated joint ventures(1)		1,214		1,221
Total equity		293,518		291,984
Total liabilities and equity	$	786,730	$	774,629

(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: $12,158 and $12,158 of land, $23,574 and $24,223 of building and improvements, net of $5,008 and $4,334 of accumulated depreciation, $3,735 and $3,696 of other assets included in other line items, $23,687 and $24,199 of real estate debt, net, $1,149 and $1,153 of other liabilities included in other line items and $1,214 and $1,221 of non-controlling interests as of September 30, 2020 and December 31, 2019, 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				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Revenues:
Rental income, net	$	21,071	$	20,414	$	63,171	$	62,288
Operating expenses:
Depreciation and amortization		5,723		5,566		17,201		16,353
General and administrative (see Note 9 for related party information)		3,456		3,143		10,244		9,319
Real estate expenses (see Note 9 for related party information)		3,451		3,692		10,098		10,544
State taxes		75		68		227		255
Impairment due to casualty loss		430		—		430		—
Total operating expenses		13,135		12,469		38,200		36,471
Other operating income
Gain on sale of real estate, net		10,316		2,544		14,568		3,643
Operating income		18,252		10,489		39,539		29,460
Other income and expenses:
Equity in earnings (loss) of unconsolidated joint ventures		132		50		186		(32)
Equity in earnings from sale of unconsolidated joint venture property		—		—		121		—
Prepayment costs on debt		(58)		(161)		(1,123)		(201)
Other income (including $430 of insurance recoveries in 2020, see Note 4)		453		8		462		18
Interest:
Expense		(4,752)		(5,037)		(14,583)		(14,840)
Amortization and write-off of deferred financing costs		(301)		(252)		(760)		(739)
Net income		13,726		5,097		23,842		13,666
Net (income) loss attributable to non-controlling interests		(1)		21		(7)		(465)
Net income attributable to One Liberty Properties, Inc.	$	13,725	$	5,118	$	23,835	$	13,201
Weighted average number of common shares outstanding:
Basic		19,640		19,191		19,483		19,037
Diluted		19,686		19,239		19,511		19,076
Per common share attributable to common stockholders:
Basic and Diluted	$	.67	$	.25	$	1.17	$	.64
Cash distributions per share of common stock	$	.338	$	.45	$	1.013	$	1.35
Stock distributions per share of common stock	$	.112		—	$	.337		—

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				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Net income	$	13,726	$	5,097	$	23,842	$	13,666
Other comprehensive income
Net unrealized gain (loss) on derivative instruments		394		(1,180)		(3,995)		(5,275)
Comprehensive income		14,120		3,917		19,847		8,391
Net (income) loss attributable to non-controlling interests		(1)		21		(7)		(465)
Adjustment for derivative instruments attributable to non-controlling interests		(2)		2		6		11
Comprehensive income attributable to One Liberty Properties, Inc.	$	14,117	$	3,940	$	19,846	$	7,937

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)

					Accumulated		Accumulated		Non-Controlling
					Other		Distributions		Interests in
	Common		Paid-in		Comprehensive		in Excess of		Consolidated
	Stock		Capital		(Loss)		Net Income		Joint Ventures		Total
Balances, December 31, 2019	$	19,251	$	301,517	$	(1,623)	$	(28,382)	$	1,221	$	291,984
Distributions – common stock
Cash – $.45 per share		—		—		—		(9,036)		—		(9,036)
Restricted stock vesting		122		(122)		—		—		—		—
Shares issued through dividend reinvestment plan		7		159		—		—		—		166
Distributions to non-controlling interests		—		—		—		—		(8)		(8)
Compensation expense – restricted stock		—		976		—		—		—		976
Net income		—		—		—		7,826		5		7,831
Other comprehensive loss		—		—		(4,809)		—		(9)		(4,818)
Balances, March 31, 2020		19,380		302,530		(6,432)		(29,592)		1,209		287,095
Distributions – common stock
Cash – $.225 per share		—		—		—		(4,535)		—		(4,535)
Stock – $.225 per share		—		—		—		(4,534)		—		(4,534)
Shares issued through dividend reinvestment plan		70		790		—		—		—		860
Distributions to non-controlling interests		—		—		—		—		(5)		(5)
Compensation expense – restricted stock		—		1,329		—		—		—		1,329
Net income		—		—		—		2,284		1		2,285
Other comprehensive income		—		—		428		—		1		429
Balances, June 30, 2020		19,450		304,649		(6,004)		(36,377)		1,206		282,924
Distributions – common stock
Cash – $.338 per share		—		—		—		(6,898)		—		(6,898)
Stock – $.112 per share		—		—		—		(2,300)		—		(2,300)
Shares issued through stock dividend		263		4,268		—		—		—		4,531
Restricted stock vesting		24		(24)		—		—		—		—
Contribution from non-controlling interest		—		—		—		—		10		10
Distributions to non-controlling interests		—		—		—		—		(5)		(5)
Compensation expense – restricted stock		—		1,136		—		—		—		1,136
Net income		—		—		—		13,725		1		13,726
Other comprehensive income		—		—		392		—		2		394
Balances, September 30, 2020	$	19,737	$	310,029	$	(5,612)	$	(31,850)	$	1,214	$	293,518

See accompanying notes to consolidated financial statements.

4

ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in Thousands, Except Per Share Data)

(Unaudited) (Continued)

									Non-Controlling
					Accumulated		Accumulated		Interests in
					Other		Distributions		Consolidated
	Common		Paid-in		Comprehensive		in Excess of		Joint
	Stock		Capital		Income (Loss)		Net Income		Ventures		Total
Balances, December 31, 2018	$	18,736	$	287,250	$	1,890	$	(10,730)	$	1,449	$	298,595
Distributions – common stock
Cash – $.45 per share		—		—		—		(8,832)		—		(8,832)
Restricted stock vesting		112		(112)		—		—		—		—
Shares issued through equity offering program - net		37		1,002		—		—		—		1,039
Shares issued through dividend reinvestment plan		52		1,147		—		—		—		1,199
Distributions to non-controlling interests		—		—		—		—		(5)		(5)
Compensation expense – restricted stock		—		954		—		—		—		954
Net income		—		—		—		3,971		40		4,011
Other comprehensive loss		—		—		(1,572)		—		(5)		(1,577)
Balances, March 31, 2019		18,937		290,241		318		(15,591)		1,479		295,384
Distributions – common stock
Cash – $.45 per share		—		—		—		(8,922)		—		(8,922)
Shares issued through equity offering program - net		143		4,132		—		—		—		4,275
Shares issued through dividend reinvestment plan		59		1,529		—		—		—		1,588
Distributions to non-controlling interests		—		—		—		—		(692)		(692)
Compensation expense – restricted stock		—		938		—		—		—		938
Net income		—		—		—		4,112		446		4,558
Other comprehensive loss		—		—		(2,514)		—		(4)		(2,518)
Balances, June 30, 2019		19,139		296,840		(2,196)		(20,401)		1,229		294,611
Distributions – common stock
Cash – $.45 per share		—		—		—		(8,942)		—		(8,942)
Restricted stock vesting		3		(3)		—		—		—		—
Shares issued through equity offering program - net		—		(58)		—		—		—		(58)
Shares issued through dividend reinvestment plan		55		1,477		—		—		—		1,532
Distributions to non-controlling interests		—		—		—		—		(34)		(34)
Compensation expense – restricted stock		—		942		—		—		—		942
Net income (loss)		—		—		—		5,118		(21)		5,097
Other comprehensive loss		—		—		(1,178)		—		(2)		(1,180)
Balances, September 30, 2019	$	19,197