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ONE LIBERTY PROPERTIES INC. is a real estate investment trust which invests primarily in improved commercial real estate under long-term net lease. One Liberty Properties Inc. has a market cap of $69.8 million; its shares were traded at around $6.55 with a P/E ratio of 3.5 and P/S ratio of 1.7. The dividend yield of One Liberty Properties Inc. stocks is 8.9%. One Liberty Properties Inc. had an annual average earning growth of 1.5% over the past 5 years. Highlight of Business Operations:Rental income increased by $2.4 million, or 12.5%, to $21.2 million for the six months ended June 30, 2009 from $18.8 million for the six months ended June 30, 2008. For the three months ended June 30, 2009, rental income increased by $1.1 million, or 11.4%, to $10.5 million from $9.5 million for the three months ended June 30, 2008. The increase in rental income is primarily due to rental revenues during the six and three months ended June 30, 2009 of $2.3 million and $1.1 million, respectively, earned on twelve properties acquired by us during 2008.
Depreciation and amortization expense increased by $408,000, or 9.9%, and $110,000, or 5.1%, to $4.5 million and $2.3 million for the six and three months ended June 30, 2009. The increase was primarily due to depreciation and amortization of $463,000 and $228,000 for the six and three months ended June 30, 2009, respectively, taken on twelve properties acquired during 2008. The increase was offset by “catch-up” depreciation of $98,000 and $157,000 recorded in the six and three months ended June 30, 2008, respectively, on a property which had been classified as “held for sale” with no depreciation recorded from August 2007 through March 31, 2008.
Interest and other income decreased by $124,000, or 37.5%, to $207,000 and increased by $57,000, or 47.1%, to $178,000 for the six and three months ended June 30, 2009, respectively. We had less cash available for investment in short-term cash equivalents in both periods, as we applied available cash to the purchase of nine properties in September 2008. In addition, the three months ended June 30, 2008 reflects a decline in interest rates earned on short term cash equivalents. Offsetting the decrease in interest income was $110,000 of consulting fee income and $37,000 received for an easement at one of our properties, both recorded in the three months ended June 30, 2009.
Interest expense increased by $276,000, or 3.9%, and $96,000, or 2.7%, to $7.3 million and $3.6 million for the six and three months ended June 30, 2009, respectively. The increase results primarily from increases of $349,000 and $170,000 for the six and three months ended June 30, 2009, respectively, of interest expense related to our line of credit as we drew down funds for the purchase of eight properties in September 2008. Additionally, the increase was due to interest expense on fixed rate mortgages placed on four properties between September 2008 and March 2009, offset in part by a $111,000 gain on hedge ineffectiveness related to an interest rate swap on one of the four new mortgages. These increases were offset in part from the payoff in full of a loan payable, as well as from the monthly principal amortization of mortgages.
Loss from discontinued operations decreased by $268,000, or 42.1%, and $450,000, or 58.8%, to losses of $369,000 and $315,000 for the six and three months ended June 30, 2009, respectively. Included in discontinued operations are the operations of five properties that were formerly leased to Circuit City, which filed for protection under the federal bankruptcy laws in November 2008. These five properties had net income in the six and three months ended June 30, 2008, but produced losses in the current six and three month periods due to the rejection by Circuit City of its leases with us in the last quarter of 2008 and the first quarter of 2009 and the recording of real estate tax expense. Offsetting these losses are the discontinued operations of a property for which we received a $400,000 lease termination payment in March 2009 from its retail tenant that had been paying its rent on a current basis, but had vacated the property in 2006. In March 2009, we sold this property to an unrelated party and recorded an impairment charge of $229,000 to recognize the loss. This is in addition to an impairment charge of $752,000 taken against this property during the three months ended June 30, 2008.
With respect to the quarterly dividends paid in April and July 2009, we took advantage of a recently adopted IRS revenue ruling which allows us to satisfy our REIT distribution requirement relating to taxable income earned in 2009, by paying the dividend in cash and our common stock, provided the cash component represents at least 10% of the aggregate distribution. Accordingly, the dividend paid on July 21, 2009, aggregating $2,333,000, consisted of $234,000 in cash and 376,000 shares of our common stock valued at approximately $5.58. The dividend paid on April 27, 2009, aggregating $2,229,000, consisted of $223,000 in cash and 529,000 shares of our common stock valued at approximately $3.79.
Read the The complete ReportOLP is in the portfolios of Michael Price of MFP Investors LLC.
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