One Liberty Properties(OLP) - 2025 Q2 - Quarterly Report

Property Portfolio and Acquisitions - As of June 30, 2025, the company owns 103 properties across 32 states, with an occupancy rate of approximately 98.8%[114] - On June 24, 2025, the company entered into a contract to acquire a 210,600 square foot industrial property for $24.0 million, anticipating annual base rent of approximately $1.5 million[129] - The estimated base rent for 2026 is approximately $75.4 million, with scheduled lease expirations indicating a total of 142 leases expiring[121][122] - The company sold properties for a total gross sales price of $26.977 million during the three months ended June 30, 2025, resulting in net proceeds of $18.328 million[125] - Subsequent to June 30, 2025, the company sold additional properties for a total gross sales price of $9.457 million, with estimated net proceeds of $8.500 million[127] Financial Performance - Total revenues for the three months ended June 30, 2025, increased by 12.6% to $24,545,000 compared to $21,800,000 in 2024[130] - Net rental income for the three months ended June 30, 2025, rose by 12.3% to $24,479,000, driven by acquisitions and same-store performance[131] - Rental income from acquisitions increased significantly by 1,772.5% to $2,996,000 for the three months ended June 30, 2025, compared to $160,000 in 2024[131] - Total revenues for the six months ended June 30, 2025, increased by 9.5% to $48,715,000 compared to $44,496,000 in 2024[130] - FFO for the three months ended June 30, 2025 increased by $449,000, or 4.9%, primarily due to a $2.7 million increase in rental income, net[172] - AFFO for the three months ended June 30, 2025 increased by $392,000, or 3.8%, reflecting the same factors impacting FFO[172] - FFO for the six months ended June 30, 2025 increased by $463,000, or 2.5%[174] - AFFO for the six months ended June 30, 2025 increased by $692,000, or 3.4%[174] Operating Expenses and Income - Operating expenses for the three months ended June 30, 2025, increased by 5.9% to $15,723,000, with depreciation and amortization rising by 14.5% to $6,827,000[135] - Interest expense increased by 23.1% to $5,847,000 for the three months ended June 30, 2025, compared to $4,750,000 in 2024[143] - Other income decreased by 50.0% to $138,000 for the three months ended June 30, 2025, compared to $276,000 in 2024[143] - The company recognized a lease termination fee of $66,000 in June 2025, compared to $250,000 in March 2024[134] - Gain on sale of real estate, net, decreased by 12.3% to $6,531,000 for the three months ended June 30, 2025, compared to $7,448,000 in 2024[142] Debt and Liquidity - The company anticipates obtaining new mortgage debt of approximately $14.0 million for the acquisition, with an interest rate of 5.77%[129] - As of August 1, 2025, the company had available liquidity of $115.5 million, including $15.5 million in cash and cash equivalents and up to $100 million under its credit facility[152] - The company expects to make total debt payments of $126.779 million from 2025 to 2028, with amortization payments of $35.917 million and principal due at maturity of $90.862 million[155] - At June 30, 2025, the company had 59 outstanding mortgages totaling $452.8 million, with a weighted average interest rate of 4.76%[154] - The credit facility allows borrowing up to $100 million for various purposes, with an interest rate of 6.07% as of June 30, 2025[160] - The company is in compliance with the covenants of its credit facility as of June 30, 2025[161] Risk Management - The company faces challenges due to a volatile economic environment, which may impact cash flow and profitability[112] - The company monitors tenant credit risk through various assessments, including financial statement reviews and payment pattern analysis[117] - The company has a strategy to manage risks by diversifying its property portfolio and minimizing exposure to interest rate fluctuations[116] - The company uses interest rate swaps to hedge against interest rate risk on variable rate mortgages[179] - A 100 basis point increase in interest rates would increase interest costs by approximately $68,000 over the next twelve months based on the $6.8 million outstanding balance under the variable rate credit facility[182] - The fair market value of interest rate swaps would increase or decrease by $28,000 with a 100 basis point change in forward interest rates[180] Tax and Compliance - The company intends to maintain its REIT status by distributing at least 90% of ordinary taxable income to stockholders[113] - The company reported a state tax benefit of $135,000 during the six months ended June 30, 2025, due to a refund related to franchise taxes[141]