One Liberty Properties Inc . (NYSE:OLP), a real estate investment trust, has disclosed several transactions involving industrial and retail properties, according to a recent 8-K filing with the U.S. Securities and Exchange Commission.
The company entered into a contract on June 13, 2024, to acquire a newly constructed 302,000-square-foot industrial building near Omaha, Nebraska for $33 million. The property, which sits on approximately 16 acres, houses several tenants with a combined base rent of about $2.2 million and lease agreements extending an average of 4.7 years.
One notable tenant, occupying 54% of the building, is an NYSE-listed company with an investment-grade BBB rating from S&P. One Liberty expects to close the deal by September 30, 2024, pending due diligence outcomes, and plans to fund the purchase with cash on hand and a projected $18.4 million mortgage.
Additionally, on May 23, 2024, One Liberty completed the acquisition of a 35,249-square-foot industrial facility in Savannah, Georgia for $5.2 million. The property is fully leased to Russell Equipment, Inc. through 2034, providing an annual base rent of $364,000 with a 3% yearly increase. Financing for this purchase includes $2.8 million in mortgage debt.
The company also reported sales of various properties after May 1, 2024, totaling $16.32 million in gross sales price and $5.38 million in net gains. Notable sales include properties leased to Applebee’s, FedEx (NYSE:FDX), Havertys, Urban Outfitters (NASDAQ:URBN), and Walgreens across multiple states.
Significant leasing activities were also highlighted in the report. One Liberty renegotiated a lease with Fitness International, LLC for a property in Secaucus, New Jersey, extending it through 2040 and increasing annual rent from $1.4 million to $1.6 million. In Brooklyn, New York, a lease amendment became effective on May 7, 2024, extending the lease to 2028 and upping annual rent by approximately $80,000.
The company is encountering challenges with an LA Fitness facility in Hamilton, Ohio, with the lease ending on May 1, 2024. After generating limited rental income and incurring various expenses in 2024, One Liberty has entered into a non-binding letter of intent to sell the property for $4.4 million, expecting to incur an impairment charge of about $1.1 million for the second quarter of 2024.
The anticipated sale is subject to several conditions, and there is no certainty it will be completed.
This report is based on statements from a press release.
InvestingPro Insights
One Liberty Properties Inc. (NYSE:OLP), in its recent strategic moves, has shown a consistent focus on expanding its portfolio with high-quality industrial and retail spaces. As investors digest the company's latest transactions, insights from InvestingPro offer a deeper understanding of OLP's financial health and potential.
An essential InvestingPro Tip for OLP is its commendable track record of maintaining dividend payments for 34 consecutive years, which is particularly appealing to income-focused investors. This consistent performance is underscored by a notable dividend yield of 7.56%, as of the last twelve months up to Q1 2024. Moreover, the company's stock is trading near its 52-week high, with the price at 98.64% of this peak, reflecting investor confidence in its stability and growth prospects.
Looking at the real-time data from InvestingPro, OLP's market capitalization stands at $511.05 million, indicating a modest size within the REIT sector. The company's price-to-earnings (P/E) ratio is at 17.52, suggesting that its shares are being traded at a price relatively commensurate with its earnings. However, when adjusted for the last twelve months as of Q1 2024, the P/E ratio climbs to 42.38, which may warrant a closer look by investors to understand the underlying reasons for this increase.
Despite some challenges, such as short-term obligations exceeding liquid assets, analysts predict that the company will remain profitable this year. This is supported by a solid gross profit margin of 80.87% over the last twelve months up to Q1 2024, demonstrating OLP's ability to manage costs effectively relative to its revenue.
For investors seeking additional insights, there are more InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/OLP. To enrich your investment analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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