
Part I — Financial Information Item 1. Unaudited Consolidated Financial Statements This section presents the unaudited consolidated financial statements and detailed notes for One Liberty Properties, Inc. and its subsidiaries - Financial statements are unaudited and prepared in accordance with Form 10-Q and GAAP for interim reporting21 - The company is a self-administered and self-managed REIT, owning 105 properties (industrial and retail) across 32 states as of March 31, 202520 Consolidated Balance Sheets Consolidated Balance Sheet Highlights (Amounts in Thousands) | Metric | March 31, 2025 | December 31, 2024 | Change | % Change | | :--------------------------------- | :------------- | :---------------- | :----- | :------- | | Total assets | $811,688 | $766,954 | $44,734 | 5.83% | | Total liabilities | $507,356 | $458,379 | $48,977 | 10.68% | | Total equity | $304,332 | $308,575 | $(4,243) | -1.37% | | Real estate investments, net | $747,316 | $672,305 | $75,011 | 11.16% | | Cash and cash equivalents | $8,162 | $42,315 | $(34,153) | -80.71% | | Mortgages payable, net | $465,971 | $420,555 | $45,416 | 10.80% | Consolidated Statements of Income Consolidated Statements of Income Highlights (Amounts in Thousands, Except Per Share Data) | Metric | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Change | % Change | | :--------------------------------- | :---------------------------- | :---------------------------- | :----- | :------- | | Total revenues | $24,170 | $22,696 | $1,474 | 6.49% | | Operating income | $9,621 | $10,003 | $(382) | -3.82% | | Net income attributable to OLP | $4,155 | $5,155 | $(1,000) | -19.40% | | Basic EPS | $0.18 | $0.24 | $(0.06) | -25.00% | | Diluted EPS | $0.18 | $0.23 | $(0.05) | -21.74% | | Cash distributions per share | $0.45 | $0.45 | $0.00 | 0.00% | Consolidated Statements of Comprehensive Income Consolidated Statements of Comprehensive Income Highlights (Amounts in Thousands) | Metric | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Change | % Change | | :--------------------------------- | :---------------------------- | :---------------------------- | :----- | :------- | | Net income | $4,169 | $5,380 | $(1,211) | -22.51% | | Other comprehensive income (Net unrealized loss on derivative instruments) | $(78) | $(89) | $11 | -12.36% | | Comprehensive income | $4,091 | $5,291 | $(1,200) | -22.68% | | Comprehensive income attributable to OLP | $4,077 | $5,066 | $(989) | -19.52% | Consolidated Statements of Changes in Equity Consolidated Statements of Changes in Equity Highlights (Amounts in Thousands) | Metric | March 31, 2025 | December 31, 2024 | Change | | :--------------------------------- | :------------- | :---------------- | :----- | | Total Equity (end of period) | $304,332 | $308,575 | $(4,243) | | Common Stock (end of period) | $20,844 | $20,698 | $146 | | Paid-in Capital (end of period) | $336,926 | $335,539 | $1,387 | | Distributions in Excess of Net Income (end of period) | $(54,669) | $(49,020) | $(5,649) | | Cash Distributions – common stock (3 months) | $(9,804) | $(9,642) (for 3 months ended March 31, 2024) | $(162) | | Net income (3 months) | $4,155 | $5,155 (for 3 months ended March 31, 2024) | $(1,000) | Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows Highlights (Amounts in Thousands) | Metric | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Change | % Change | | :--------------------------------- | :---------------------------- | :---------------------------- | :----- | :------- | | Net cash provided by operating activities | $10,996 | $8,907 | $2,089 | 23.45% | | Net cash (used in) provided by investing activities | $(86,338) | $1,826 | $(88,164) | -4828.26% | | Net cash provided by (used in) financing activities | $40,677 | $(10,104) | $50,781 | 502.58% | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(34,665) | $629 | $(35,294) | -5611.13% | | Cash, cash equivalents and restricted cash at end of period | $10,816 | $30,221 | $(19,405) | -64.21% | Notes to Consolidated Financial Statements This section provides detailed explanations and disclosures for the consolidated financial statements, covering key accounting policies and transactions - The company is a self-administered and self-managed REIT, owning 105 properties (industrial and retail) across 32 states as of March 31, 202520 - Financial statements are unaudited and prepared in accordance with Form 10-Q and GAAP for interim reporting, with management estimates and assumptions2122 NOTE 1 – ORGANIZATION AND BACKGROUND - One Liberty Properties, Inc. (OLP) is a Maryland-incorporated REIT, established in 198220 - OLP acquires, owns, and manages a diversified portfolio primarily of industrial and retail properties, many under long-term net leases20 - As of March 31, 2025, OLP owns 105 properties across 32 states, including those held through consolidated and unconsolidated joint ventures20 NOTE 2 – SUMMARY ACCOUNTING POLICIES - Unaudited consolidated financial statements are prepared in accordance with Form 10-Q and U.S. GAAP for interim reporting, including management estimates and assumptions2122 - The Company consolidates wholly-owned subsidiaries, joint ventures with controlling interests, and VIEs where it is the primary beneficiary23 - Purchase price for real estate acquisitions is allocated among land, building, improvements, and intangibles based on fair values, using Level 3 inputs like cash flow projections, market capitalization, and discount rates2526 - Investments in unconsolidated joint ventures are accounted for using the equity method, as these ventures have sufficient equity at risk and shared power29 NOTE 3 – LEASES Lease Revenues (Amounts in Thousands) | Metric | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | | :------------------- | :---------------------------- | :---------------------------- | | Fixed lease revenues | $19,536 | $18,272 | | Variable lease revenues | $4,382 | $3,796 | | Total Lease revenues | $23,918 | $22,068 | Minimum Future Contractual Rents (Amounts in Thousands) | Period | Amount | | :--------------------------------- | :------- | | From April 1 – December 31, 2025 | $58,463 | | For the year ending December 31, 2026 | $75,487 | | For the year ending December 31, 2027 | $67,117 | | For the year ending December 31, 2028 | $55,090 | | For the year ending December 31, 2029 | $43,689 | | For the year ending December 31, 2030 | $33,438 | | Thereafter | $74,822 | | Total | $408,106 | - The Company is a lessee under a ground lease (Greensboro, NC) and an office lease (Great Neck, NY), both classified as operating leases3940 NOTE 4 – REAL ESTATE ACQUISITIONS Real Estate Acquisitions (Three Months Ended March 31, 2025) (Amounts in Thousands) | Property Description | Date Acquired | Contract Purchase Price | Capitalized Transaction Costs | Mortgage Amount | Interest Rate | Maturity | | :--------------------------------- | :------------ | :---------------------- | :---------------------------- | :-------------- | :------------ | :------- | | Multi-tenant (2 properties), Theodore, Alabama | Jan 16, 2025 | $49,000 | $197 | $29,000 | 6.12% | 2035 | | Amazon.com Services, LLC, Wichita, Kansas | Feb 6, 2025 | $13,300 | $230 | $7,500 | 6.09% | 2030 | | Multi-tenant, Council Bluffs, Iowa | Mar 14, 2025 | $26,000 | $111 | $15,600 | 6.42% | 2035 | | Totals | | $88,300 | $538 | $52,100 | | | - The total purchase price allocated for these acquisitions was $88,838,000, including land, building & improvements, and intangible lease assets/liabilities43 NOTE 5 – SALES OF PROPERTIES Real Estate Sales (Three Months Ended March 31, 2025 and 2024) (Amounts in Thousands) | Property Description | City, State | Date Sold | Gross Sales Price | (Loss) Gain on Sale of Real Estate, Net | | :--------------------------------- | :-------------------- | :---------- | :---------------- | :-------------------------------------- | | Land and improvements | Lakewood, Colorado | Jan 16, 2025 | $400 | $(44) | | Hooters restaurant property | Concord, North Carolina | Jan 21, 2025 | $3,253 | $1,154 | | Totals (3 months ended March 31, 2025) | | | $3,653 | $1,110 | | Hacienda Colorado restaurant parcel | Lakewood, Colorado | Mar 6, 2024 | $2,900 | $1,784 | | Totals (3 months ended March 31, 2024) | | | $2,900 | $1,784 | NOTE 6 – INVESTMENT IN UNCONSOLIDATED JOINT VENTURES - As of March 31, 2025, the Company participated in two unconsolidated joint ventures, with an equity investment of $1,506,000, down from $2,101,000 at December 31, 202446 - Equity in earnings from these ventures was $25,000 for the three months ended March 31, 2025, a decrease from $53,000 in the prior year period46 NOTE 7 – VARIABLE INTEREST ENTITIES, CONSOLIDATED JOINT VENTURES AND CONTINGENT LIABILITY - The Company consolidates two joint ventures (90% and 95% interest) as VIEs because it is the primary beneficiary, directing activities and absorbing losses/receiving benefits48 - The Company has a variable interest in a ground lease at its Beachwood, Ohio property (The Vue Apartments), but is not the primary beneficiary and thus does not consolidate it50 - The maximum exposure to loss for the Beachwood VIE was $17,386,000 (carrying amount of land) as of March 31, 2025, with the Company providing land as collateral for a $61,935,000 mortgage50 NOTE 8 – DEBT OBLIGATIONS Mortgages Payable, Net (Amounts in Thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :------------- | :---------------- | | Mortgages payable, gross | $470,763 | $424,978 | | Unamortized deferred financing costs | $(4,159) | $(3,756) | | Unamortized mortgage intangible assets | $(633) | $(667) | | Mortgages payable, net | $465,971 | $420,555 | Scheduled Principal Repayments of Mortgage Debt (Amounts in Thousands) | Year | Amortization Payments | Principal Due at Maturity | Total | | :------------------- | :-------------------- | :------------------------ | :-------- | | 2025 (remaining 9 months) | $8,291 | $13,129 | $21,420 | | 2026 | $11,038 | $18,461 | $29,499 | | 2027 | $9,999 | $44,332 | $54,331 | | 2028 | $9,356 | $30,155 | $39,511 | | 2029 | $7,284 | $79,386 | $86,670 | | Thereafter | $30,987 | $208,345 | $239,332 | | Total | $76,955 | $393,808 | $470,763 | - The Company has a $100 million credit facility maturing December 31, 2026, with $5,000,000 outstanding at March 31, 2025, and $95,000,000 available525354 NOTE 9 – RELATED PARTY TRANSACTIONS - The Company paid Majestic Property Management Corp. (wholly-owned by OLP's vice-chairman) $888,000 for services in Q1 2025, including $390,000 for property management5657 - Compensation expense for restricted stock and RSUs for executive officers and others was $648,000 in Q1 202558 - Quarterly fees of $84,633 to the chairman and $33,853 to the vice-chairman were paid in Q1 202561 NOTE 10 – STOCKHOLDERS' EQUITY - A quarterly cash dividend of $0.45 per share ($9,714,000 total) was declared on March 5, 2025, paid April 4, 202563 - The Dividend Reinvestment Plan (DRP) allows reinvestment at a 3% discount; 7,000 shares were issued in Q1 2025 (compared to 66,000 in Q1 2024)64 - No shares were repurchased under the stock repurchase program in Q1 2025 or Q1 2024; $8,082,000 remains authorized for repurchase65 Stock-Based Compensation Activity (Three Months Ended March 31) (Amounts in Thousands) | Metric | 2025 | 2024 | | :--------------------------------- | :----- | :----- | | Restricted stock grants (shares) | 154,390 | 151,180 | | Deferred compensation (restricted stock) | $3,940 | $3,265 | | Non-vested restricted shares (end of period) | 742,170 | 727,140 | | Non-vested RSUs (end of period) | 256,740 | 248,112 | | Total charge to operations | $1,346 | $1,272 | NOTE 11 – EARNINGS PER COMMON SHARE Earnings Per Share Reconciliation (Amounts in Thousands, Except Per Share) | Metric | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | | :--------------------------------- | :---------------------------- | :---------------------------- | | Net income available for common stockholders: basic and diluted | $3,821 | $4,828 | | Weighted average number of common shares outstanding (basic) | 20,820 | 20,509 | | Weighted average number of shares (diluted) | 20,951 | 20,579 | | Basic EPS | $0.18 | $0.24 | | Diluted EPS | $0.18 | $0.23 | - Basic EPS calculation excludes shares underlying RSUs until they vest, as they are not participating securities76 NOTE 12 – FAIR VALUE MEASUREMENTS Fair Value and Carrying Amounts of Mortgages Payable (Amounts in Thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--------------------------------- | :------------- | :---------------- | | Fair value of mortgages payable | $456,783 | $398,934 | | Carrying value of mortgages payable, gross | $470,763 | $424,978 | | Fair value less than carrying value | $(13,980) | $(26,044) | | Blended market interest rate | 5.77% | 6.28% | | Weighted average interest rate | 4.78% | 4.56% | | Weighted average remaining term to maturity (years) | 6.3 | 6.1 | - The Company uses eight interest rate swaps (notional amount $13,767,000) to convert SOFR-based variable rate mortgages to fixed rates, designated as cash flow hedges86 - The fair value of derivatives is classified as Level 2 in the fair value hierarchy, with credit valuation adjustments using Level 3 inputs deemed not significant87 NOTE 13 – SEGMENT REPORTING - The Company operates in one reportable segment, aggregating real estate assets, as substantially all assets are leased to tenants on a long-term basis92 - Chief Operating Decision Makers (CEO and COO) assess performance and allocate resources based on consolidated financial reports93 NOTE 14 – NEW ACCOUNTING PRONOUNCEMENT - FASB issued ASU No. 2024–03, requiring disaggregated disclosure of income statement expenses in footnotes, applicable for fiscal years beginning after December 15, 202694 - The Company is evaluating the impact of ASU No. 2024–03 on its consolidated financial statements94 NOTE 15 – SUBSEQUENT EVENTS - No other subsequent events requiring additional disclosure were identified beyond those already disclosed in the financial statements95 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition, operations, property transactions, liquidity, and non-GAAP measures like FFO and AFFO - The company is a self-administered and self-managed REIT, owning 105 properties (industrial and retail) across 32 states with an occupancy rate of approximately 98.5% as of March 31, 2025102103 - The company faces challenges from a volatile economic environment and issues with its Beachwood, Ohio property (The Vue), which could impact cash flow and profitability101 Cautionary Note Regarding Forward-Looking Statements - The report contains forward-looking statements covered by the Private Securities Litigation Reform Act of 1995, identifiable by words like 'may,' 'will,' 'expect,' etc96 - Forward-looking statements involve known and unknown risks, uncertainties, and other factors that could materially affect actual results, performance, or achievements9697 - Key risks include tenant financial failure, adverse changes in tenant sectors, interest rate volatility, and general economic conditions97 Challenges and Uncertainties Facing Certain Tenants and Properties - The Company faces challenges from the volatile economic environment, including tariffs and trade wars, particularly impacting seaport-based industrial/warehouse properties101 - The Vue, the Beachwood, Ohio property, presents specific challenges, and unresolved issues could adversely impact cash flow and profitability101 Overview - The Company is a self-administered and self-managed REIT, committed to maintaining REIT status by distributing at least 90% of ordinary taxable income to stockholders102 - As of March 31, 2025, the Company owns 105 properties (primarily industrial, some retail) across 32 states, with an occupancy rate of approximately 98.5%103 - The Company manages risk by diversifying among locations, tenants, lease expirations, mortgage maturities, and lenders, and by minimizing interest rate fluctuation exposure through fixed-rate debt or interest rate swaps105 Scheduled Lease Expirations and 2025 Base Rent Contribution | Year of Lease Expiration | Number of Expiring Leases | Square Footage Subject to Expiring Leases | 2025 Base Rent Under Expiring Leases | Percentage of 2025 Base Rent | | :----------------------- | :------------------------ | :---------------------------------------- | :----------------------------------- | :--------------------------- | | 2025 | 7 | 318,319 | $1,797,000 | 2.3% | | 2026 | 14 | 902,154 | $5,164,000 | 6.7% | | 2027 | 33 | 2,127,122 | $14,253,000 | 18.4% | | 2028 | 24 | 1,817,934 | $12,435,000 | 16.1% | | 2029 | 19 | 1,703,799 | $9,864,000 | 12.7% | | 2030 | 19 | 900,904 | $8,844,000 | 11.4% | | 2031 | 13 | 1,276,232 | $7,260,000 | 9.4% | | 2032 | 11 | 677,222 | $5,587,000 | 7.2% | | 2033 | 9 | 853,179 | $7,644,000 | 9.9% | | 2034 | 9 | 225,884 | $2,395,000 | 3.1% | | 2035 and thereafter | 4 | 629,880 | $2,155,000 | 2.8% | | Total | 162 | 11,432,629 | $77,398,000 | 100.0% | Property Transactions This section details the Company's real estate acquisition and disposition activities for the three months ended March 31, 2025 - The Company focuses on acquiring industrial properties and evaluates transactions based on lease terms, tenant credit, financing, and fundamental real estate analysis108 Acquisitions during the three months ended March 31, 2025 Property Acquisitions (Three Months Ended March 31, 2025) (Amounts in Thousands) | Property Description | Date Acquired | Contract Purchase Price | Capitalized Transaction Costs | Mortgage Amount | Interest Rate | Maturity | | :--------------------------------- | :------------ | :---------------------- | :---------------------------- | :-------------- | :------------ | :------- | | Multi-tenant (2 Properties), Theodore, Alabama | Jan 16, 2025 | $49,000 | $197 | $29,000 | 6.12% | 2035 | | Amazon.com Services, LLC, Wichita, Kansas | Feb 6, 2025 | $13,300 | $230 | $7,500 | 6.09% | 2030 | | Multi-tenant, Council Bluffs, Iowa | Mar 14, 2025 | $26,000 | $111 | $15,600 | 6.42% | 2035 | | Totals | | $88,300 | $538 | $52,100 | | | - These acquired properties contributed $1.1 million in rental income, $670,000 in operating expenses, and $492,000 in mortgage interest expense for the period ended March 31, 2025114 Sales during the three months ended March 31, 2025 Property Sales (Three Months Ended March 31, 2025) (Amounts in Thousands) | Property Description | City, State | Date Sold | Gross Sales Price | (Loss)/Gain on Sale of Real Estate, net | | :--------------------------------- | :-------------------- | :---------- | :---------------- | :-------------------------------------- | | Land and improvements | Lakewood, Colorado | Jan 16, 2025 | $400 | $(44) | | Hooters restaurant property | Concord, North Carolina | Jan 21, 2025 | $3,253 | $1,154 | | Total | | | $3,653 | $1,110 | - The Hooters restaurant property sale contributed $1,154,000 in gain on sale of real estate, net115 Results of Operations This section analyzes the Company's financial performance for Q1 2025, detailing changes in revenues, expenses, and gains - Total revenues increased by $1.474 million (6.5%) to $24.170 million, primarily driven by higher rental income116 - Net income attributable to One Liberty Properties, Inc. decreased by $1.000 million (19.4%) to $4.155 million11 Total revenues Total Revenues (Amounts in Thousands) | Metric | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Increase (Decrease) | % Change | | :------------------- | :---------------------------- | :---------------------------- | :------------------ | :------- | | Rental income, net | $24,170 | $22,446 | $1,724 | 7.7% | | Lease termination fee | $0 | $250 | $(250) | -100.0% | | Total revenues | $24,170 | $22,696 | $1,474 | 6.5% | Rental income, net Components of Rental Income, Net (Amounts in Thousands) | Component | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Increase (Decrease) | % Change | | :------------------- | :---------------------------- | :---------------------------- | :------------------ | :------- | | Acquisitions | $2,227 | $0 | $2,227 | n/a | | Dispositions | $11 | $1,069 | $(1,058) | -99.0% | | Same store | $21,932 | $21,377 | $555 | 2.6% | | Rental income, net | $24,170 | $22,446 | $1,724 | 7.7% | - Same store rental income increased by $555,000 (2.6%), primarily due to lease amendments/extensions ($362,000), tenant reimbursements ($316,000), and new tenants ($265,000)119120 Lease Termination Fee - No lease termination fee was recognized in Q1 2025, compared to $250,000 received in Q1 2024 from a consolidated joint venture due to early lease termination116119 Operating Expenses Operating Expenses (Amounts in Thousands) | Expense Category | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Increase (Decrease) | % Change | | :--------------------------------- | :---------------------------- | :---------------------------- | :------------------ | :------- | | Depreciation and amortization | $6,545 | $6,021 | $524 | 8.7% | | Real estate expenses | $5,038 | $4,470 | $568 | 12.7% | | General and administrative | $4,170 | $3,923 | $247 | 6.3% | | State tax (benefit) expense | $(94) | $63 | $(157) | -249.2% | | Total operating expenses | $15,659 | $14,477 | $1,182 | 8.2% | - Depreciation and amortization increased by $524,000 (8.7%), mainly due to new acquisitions ($947,000) and property improvements ($150,000)121 - Real estate expenses rose by $568,000 (12.7%), primarily from common area maintenance and utilities ($394,000) and acquired properties ($357,000)123 - State tax expense became a benefit of $(94,000) in Q1 2025, due to a $135,000 refund from Tennessee related to 2023 franchise taxes125 Gain on sale of real estate, net Gain on Sale of Real Estate, Net (Amounts in Thousands) | Metric | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Increase (Decrease) | % Change | | :--------------------------------- | :---------------------------- | :---------------------------- | :------------------ | :------- | | Gain on sale of real estate, net | $1,110 | $1,784 | $(674) | -37.8% | - The gain on sale decreased by $674,000 (37.8%) in Q1 2025, with the current period's gain primarily from the sale of a restaurant property in Concord, NC126 Other Income and Expenses Other Income and Expenses (Amounts in Thousands) | Metric | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Increase (Decrease) | % Change | | :--------------------------------- | :---------------------------- | :---------------------------- | :------------------ | :------- | | Equity in earnings of unconsolidated joint ventures | $25 | $53 | $(28) | -52.8% | | Other income | $188 | $267 | $(79) | -29.6% | | Interest expense | $(5,432) | $(4,717) | $715 | 15.2% | | Amortization and write-off of deferred financing costs | $(233) | $(226) | $7 | 3.1% | Interest expense Interest Expense (Amounts in Thousands) | Metric | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Increase (Decrease) | % Change | | :------------------- | :---------------------------- | :---------------------------- | :------------------ | :------- | | Mortgage interest | $5,355 | $4,654 | $701 | 15.1% | | Credit line interest | $77 | $63 | $14 | 22.2% | | Total | $5,432 | $4,717 | $715 | 15.2% | - The increase in mortgage interest is due to an 8.2% increase in the weighted average principal amount of mortgage debt outstanding ($458.1 million vs. $423.4 million) and a 6.5% increase in the weighted average interest rate (4.65% vs. 4.36%)128 Liquidity and Capital Resources This section outlines the Company's liquidity sources, capital strategy, debt obligations, and off-balance sheet arrangements - Available liquidity at May 1, 2025, was $96.4 million, comprising $8.9 million in cash and cash equivalents and $87.5 million available under the credit facility130 - The Company expects to meet operating, investing, and financing cash requirements primarily from cash flow from operations, available cash, and the credit facility, supplemented by property financings, sales, and common stock sales131 Liquidity and Financing - As of March 31, 2025, the Company had 64 outstanding mortgages payable totaling $470.8 million, secured by 66 properties with an aggregate carrying value of $741.4 million132 - Mortgage payments bear fixed interest rates ranging from 3.05% to 6.78% (4.78% weighted average) and mature between 2025 and 2047 (6.3-year weighted average remaining term)132 - The Company intends to refinance, extend, or pay off maturing mortgage loans from 2025 through 2028, using existing funds, common stock sales, and the credit facility134 Mortgage Debt Payable (Amounts in Thousands) | Period | Amortization payments | Principal due at maturity | Total | Weighted average interest rate on principal due at maturity | | :------------------- | :-------------------- | :------------------------ | :-------- | :-------------------------------------------------------- | | 2025 (remaining 9 months) | $8,291 | $13,129 | $21,420 | 4.18% | | 2026 | $11,038 | $18,461 | $29,499 | 3.91% | | 2027 | $9,999 | $44,332 | $54,331 | 4.05% | | 2028 | $9,356 | $30,155 | $39,511 | 4.64% | | Total | $38,684 | $106,077 | $144,761 | 4.21% | Credit Facility - The $100 million credit facility matures December 31, 2026, and is available for real estate acquisitions, mortgage debt repayment, and up to $40 million for renovation and operating expenses138 - The interest rate is 30-day SOFR plus an applicable margin (175 basis points at March 31, 2025), with an unused facility fee of 0.25% per annum138 - The Company was in compliance with all credit facility covenants at March 31, 2025, which include restrictions on liens and requirements for financial ratios139 Off-Balance Sheet Financing Arrangement - The Company has an off-balance sheet arrangement related to a ground lease at its Beachwood, Ohio property (The Vue Apartments), where its land position ($17.4 million carrying value) is subordinate to $61.9 million of tenant mortgage debt140 - The Company may, at its discretion, fund 78% of operating expense shortfalls and capital expenditures at this property, but does not believe this arrangement is not material to its liquidity or capital resources140 Application of Critical Accounting Estimates - A complete discussion of critical accounting estimates is available in the Company's Annual Report, and there have been no changes to these estimates141 Funds from Operations and Adjusted Funds from Operations This section defines and reconciles FFO and AFFO to GAAP net income, explaining their utility for REIT performance evaluation - FFO is computed according to NAREIT guidance, excluding real estate depreciation/amortization and gains/losses from property sales143 - AFFO adjusts FFO for items like straight-line rent accruals, amortization of lease intangibles, and stock compensation expense, providing a more refined view of operating performance144 - FFO and AFFO are useful supplemental measures for evaluating equity REITs, reflecting operational trends without GAAP depreciation, but are not substitutes for GAAP net income or cash flows145146 Reconciliation of Net Income to FFO and AFFO (Amounts in Thousands, Except Per Share) | Metric | 3 Months Ended March 31, 2025 | 3 Months Ended March 31, 2024 | Change | % Change | | :--------------------------------- | :---------------------------- | :---------------------------- | :----- | :------- | | GAAP net income attributable to OLP | $4,155 | $5,155 | $(1,000) | -19.40% | | NAREIT funds from operations applicable to common stock | $9,573 | $9,559 | $14 | 0.15% | | Adjusted funds from operations applicable to common stock | $10,510 | $10,210 | $300 | 2.94% | | NAREIT funds from operations per share of common stock | $0.44 | $0.45 | $(0.01) | -2.22% | | Adjusted funds from operations per share of common stock | $0.48 | $0.48 | $0.00 | 0.00% | - AFFO increased by $300,000 (2.9%) in Q1 2025, primarily due to a $1.7 million increase in rental income and a $157,000 decrease in state tax expense, partially offset by increased interest and operating expenses150159 Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discusses the Company's market risk exposure, focusing on interest rate fluctuations and their impact on debt - The primary market risk exposure is the effect of changes in interest rates on the variable rate credit facility and the fair value of interest rate swap agreements153 - The Company uses interest rate swaps to hedge substantially all variable rate mortgages, converting them to fixed rates, and does not use derivatives for trading or speculation154156 - A 100 basis point increase in forward interest rates would increase the fair market value of interest rate swaps and net unrealized gain by $53,000, while a decrease would reduce them by $54,000, with no impact on net income or cash155 - A 100 basis point change in the interest rate on the $5.0 million outstanding credit facility balance would impact related interest costs by approximately $50,000 over the next twelve months157 Item 4. Controls and Procedures This section confirms effective disclosure controls and no material changes in internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025160 - No material changes in internal control over financial reporting occurred during the three months ended March 31, 2025161 Part II — Other Information Item 5. Other Information No officers or directors had Rule 10b5-1 trading arrangements in effect during Q1 2025 - No officers or directors had Rule 10b5-1 trading arrangements for the purchase or sale of securities in effect during Q1 2025162 Item 6. Exhibits This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and Inline XBRL financial statements - Exhibits include certifications from the CEO and CFO under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002163 - The financial statements and notes are filed in Inline XBRL format as Exhibit 101163