Business Overview and Historical Developments
One Liberty Properties, Inc. (OLP) is a self-administered and self-managed real estate investment trust (REIT) that has undergone a significant transformation over the past decade, evolving its portfolio to focus primarily on industrial properties. Incorporated in 1982 and headquartered in Great Neck, New York, the company has steadily positioned itself as a leading player in the industrial real estate sector, leveraging its expertise to drive sustainable growth and deliver value to its shareholders.
One Liberty Properties was incorporated in Maryland in 1982 as a diversified REIT, acquiring and managing a range of commercial properties, including retail, office, and industrial assets. The company's primary focus has been on acquiring, owning, and managing a geographically diversified portfolio consisting primarily of industrial and retail properties, many of which are subject to long-term net leases.
In its early days, One Liberty Properties faced challenges navigating the competitive U.S. commercial real estate investment market, particularly in the industrial property sector. As a relatively new REIT, the company competed with many larger and more established entities engaged in the acquisition, leasing, and operation of commercial properties.
Over the years, One Liberty has demonstrated its ability to adapt to changing market conditions and overcome various challenges. The company has successfully implemented a comprehensive monitoring and assessment process to proactively manage the credit risk of its tenants, helping to mitigate the adverse effects of tenant defaults or bankruptcies. Additionally, One Liberty has navigated changes in the regulatory landscape, such as compliance with environmental regulations and the Americans with Disabilities Act, ensuring that its properties meet the necessary standards.
A key milestone in the company's history was its successful transformation into a primarily industrial property owner. In recent years, One Liberty Properties has made a concerted effort to shift its portfolio towards industrial assets, which now account for approximately 72% of its 2025 contractual rental income. This strategic shift has provided the company with greater stability and predictability of cash flows.
As of December 31, 2024, One Liberty owned 102 properties, including 100 wholly owned and two owned through consolidated joint ventures, located across 31 states. The portfolio is primarily composed of industrial properties, which account for approximately 72.4% of the company's 2025 contractual rental income. The remaining portfolio includes retail, theater, health and fitness, and restaurant properties, demonstrating One Liberty's ability to diversify its holdings while maintaining a clear focus on industrial assets.
Financials
Financial Performance and Ratios
One Liberty's financial performance has been solid, with the company reporting positive net income and funds from operations (FFO) in each of the past three fiscal years. In the most recent fiscal year, the company reported total revenues of $90.56 million, with rental income, net, accounting for $90.31 million of this figure. Net income attributable to One Liberty Properties, Inc. shareholders was $30.42 million, and FFO was $41.16 million, or $1.91 per diluted share. The company's 2025 contractual rental income is estimated to be $72.03 million, with a weighted average remaining lease term of 5 years.
In the most recent quarter, One Liberty reported revenue of $23.86 million and net income of $10.55 million. Year-over-year, revenue increased by 4.9%, while net income saw a significant increase of 95.5%. This substantial growth in net income was primarily due to an $18.01 million gain on sale of real estate, partially offset by a $1.09 million impairment loss.
The company's financial ratios paint a picture of a well-capitalized and efficiently managed REIT. As of December 31, 2024, One Liberty had a debt-to-equity ratio of 1.37, a debt-to-total-capitalization ratio of 0.58, and an interest coverage ratio of 4.18, all of which are within industry-standard ranges and indicate a healthy balance sheet. The company also reported a current ratio and quick ratio of 2.27, further demonstrating its strong liquidity position.
Geographic Performance
One Liberty's portfolio is geographically diversified, with properties spread across 31 states. Approximately 46.9% of the company's 2025 contractual rental income is derived from properties located in six states: South Carolina (11.7%), New York (9.5%), Texas (7.9%), Pennsylvania (7.9%), Maryland (5.2%), and Iowa (4.7%). This geographic diversification helps mitigate regional economic risks and provides exposure to various market dynamics.
Liquidity
One Liberty's liquidity position is strong, with $42.31 million in cash and cash equivalents as of December 31, 2024. The company also has an undrawn $100 million credit facility, which matures in December 2026 and bears interest at 30-day SOFR plus an applicable margin ranging from 175 to 275 basis points. This combination of cash on hand and available credit provides ample resources to fund future acquisitions and capital expenditures.
Acquisition and Disposition Activity
One Liberty's growth strategy has been largely driven by strategic acquisitions of industrial properties. In 2024, the company acquired three industrial properties for a total of $44.7 million, adding approximately $3 million in contractual rental income to its portfolio. These acquisitions further solidified the company's position in the industrial real estate sector.
Complementing its acquisition activity, One Liberty has also been disciplined in its approach to asset dispositions. In 2024, the company sold 11 properties, including six retail, two industrial, two health and fitness, and one restaurant asset, for net proceeds of $38.2 million and a total net gain on sale of $18 million. These dispositions allowed One Liberty to recycle capital and reinvest in higher-quality industrial properties that align with its strategic vision.
Subsequent to the end of 2024, One Liberty announced the acquisition of three additional industrial properties for a total of $62.3 million, which are expected to generate approximately $5.3 million in contractual rental income in 2025. These acquisitions further expand the company's presence in key markets and enhance its overall portfolio quality.
Portfolio Composition and Tenant Mix
One Liberty's portfolio is primarily composed of industrial properties, accounting for 72.4% of the company's 2025 contractual rental income. The remaining 21.1% is derived from retail properties, including general retail, furniture, office supply, and other retail assets.
The company's industrial properties are leased to a diverse set of tenants across various industries, including logistics, manufacturing, and distribution. Some of One Liberty's largest industrial tenants include FedEx, Northern Tool, NARDA Holdings, Inc., Havertys, and Ferguson, which collectively account for approximately 21.1% of the company's 2025 contractual rental income. The weighted average remaining lease term for these major industrial tenants ranges from 2.6 to 8.7 years.
On the retail side, One Liberty's portfolio includes properties leased to tenants in the general retail, furniture, office supply, theater, health and fitness, and restaurant sectors. The company's retail properties are primarily subject to long-term net leases, with 71.9% of the 2025 contractual rental income derived from leases that provide for either periodic contractual rent increases or rent increases based on the consumer price index.
As of December 31, 2024, the occupancy rate of One Liberty's properties was 99.2% based on square footage, demonstrating the company's ability to maintain high occupancy levels across its portfolio.
Dividend History and Shareholder Returns
One Liberty has maintained a strong track record of returning capital to shareholders through its quarterly dividend payments. The company has increased or maintained its dividend for over 31 consecutive years, underscoring its financial discipline and commitment to delivering consistent returns to its investors.
As of March 5, 2025, One Liberty's Board of Directors declared a quarterly dividend of $0.45 per share, payable on April 4, 2025, to stockholders of record as of March 27, 2025. This marks the company's 129th consecutive quarterly dividend payment.
Over the past three years, One Liberty has delivered a total shareholder return of 24.6%, outperforming the broader REIT market, as represented by the FTSE Nareit All Equity REITs Index, which returned 18.3% during the same period.
Risks and Challenges
While One Liberty's performance has been commendable, the company is not without its risks and challenges. As with any REIT, One Liberty is exposed to the cyclical nature of the real estate market, interest rate fluctuations, and the potential for tenant defaults or bankruptcies.
The company's focus on industrial properties, while a strategic strength, also exposes it to the risks and challenges inherent in that sector, such as the potential impact of e-commerce disruption, changes in supply chain dynamics, and increased competition for high-quality industrial assets.
Furthermore, One Liberty's geographic diversification, while mitigating some regional risks, also introduces challenges related to managing a portfolio spread across 31 states. The company must maintain a robust operational infrastructure and effectively monitor local market conditions to ensure the continued performance of its assets.
Conclusion
One Liberty Properties has evolved into a well-positioned and diversified industrial REIT, leveraging its expertise and strategic vision to drive sustainable growth. The company's focus on high-quality industrial properties, coupled with its disciplined approach to acquisitions and dispositions, has positioned it as a leader in the sector.
With a strong financial profile, a history of consistent dividend payments, and a commitment to shareholder value creation, One Liberty Properties presents a compelling investment opportunity for investors seeking exposure to the resilient industrial real estate market. As the company continues to execute on its strategic initiatives, investors can look forward to the potential for further growth and value appreciation in the coming years.