Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 01, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | ONE LIBERTY PROPERTIES INC | |
Entity Central Index Key | 712,770 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 18,452,058 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Real estate investments, at cost | ||
Land | $ 211,432,000 | $ 211,432,000 |
Buildings and improvements | 537,045,000 | 536,633,000 |
Total real estate investments, at cost | 748,477,000 | 748,065,000 |
Less accumulated depreciation | 100,700,000 | 96,852,000 |
Real estate investments, net | 647,777,000 | 651,213,000 |
Investment in unconsolidated joint ventures | 10,772,000 | 10,833,000 |
Cash and cash equivalents | 13,241,000 | 17,420,000 |
Restricted cash | 572,000 | 643,000 |
Unbilled rent receivable | 13,737,000 | 13,797,000 |
Unamortized intangible lease assets, net | 30,823,000 | 32,645,000 |
Escrow, deposits and other assets and receivables | 7,012,000 | 6,894,000 |
Total assets | 723,934,000 | 733,445,000 |
Liabilities: | ||
Mortgages payable, net of $3,985 and $4,294 of deferred financing costs, respectively | 392,656,000 | 394,898,000 |
Line of credit, net of $858 and $936 of deferred financing costs, respectively | 4,142,000 | 9,064,000 |
Dividends payable | 7,912,000 | 7,806,000 |
Accrued expenses and other liabilities | 10,561,000 | 10,470,000 |
Unamortized intangible lease liabilities, net | 18,838,000 | 19,280,000 |
Total liabilities | 434,109,000 | 441,518,000 |
Commitments and contingencies | ||
One Liberty Properties, Inc. stockholders' equity: | ||
Preferred stock, $1 par value; 12,500 shares authorized; none issued | ||
Common stock, $1 par value; 25,000 shares authorized; 17,773 and 17,600 shares issued and outstanding | 17,773,000 | 17,600,000 |
Paid-in capital | 264,687,000 | 262,511,000 |
Accumulated other comprehensive loss | (876,000) | (1,479,000) |
Accumulated undistributed net income | 6,454,000 | 11,501,000 |
Total One Liberty Properties, Inc. stockholders' equity | 288,038,000 | 290,133,000 |
Non-controlling interests in consolidated joint ventures | 1,787,000 | 1,794,000 |
Total equity | 289,825,000 | 291,927,000 |
Total liabilities and equity | $ 723,934,000 | $ 733,445,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, shares authorized | 12,500 | 12,500 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized | 25,000 | 25,000 |
Common stock, shares issued | 17,773 | 17,600 |
Common stock, shares outstanding | 17,773 | 17,600 |
Facility | ||
Deferred financing costs | $ 858 | $ 936 |
Mortgages payable | ||
Deferred financing costs | $ 3,985 | $ 4,294 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues: | ||
Rental income, net | $ 16,833,000 | $ 15,056,000 |
Tenant reimbursements | 1,639,000 | 1,288,000 |
Total revenues | 18,472,000 | 16,344,000 |
Operating expenses: | ||
Depreciation and amortization | 5,553,000 | 4,185,000 |
General and administrative (see Note 9 for related party information) | 2,815,000 | 2,609,000 |
Real estate expenses (see Note 9 for related party information) | 2,704,000 | 2,175,000 |
Real estate acquisition costs | 204,000 | |
Federal excise and state taxes | 88,000 | 76,000 |
Leasehold rent | 77,000 | 77,000 |
Total operating expenses | 11,237,000 | 9,326,000 |
Operating income | 7,235,000 | 7,018,000 |
Other income and expenses: | ||
Equity in earnings of unconsolidated joint ventures | 245,000 | 209,000 |
Prepayment costs on debt | (423,000) | |
Other income | 22,000 | 13,000 |
Interest: | ||
Expense | (4,389,000) | (4,075,000) |
Amortization and write-off of deferred financing costs | (227,000) | (244,000) |
Income before gain on sale of real estate, net | 2,886,000 | 2,498,000 |
Gain on sale of real estate, net | 787,000 | |
Net income | 2,886,000 | 3,285,000 |
Net (income) loss attributable to non-controlling interests | (21,000) | 2,000 |
Net income attributable to One Liberty Properties, Inc. | $ 2,865,000 | $ 3,287,000 |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 17,751 | 16,388 |
Diluted (in shares) | 17,865 | 16,495 |
Per common share attributable to common stockholders - basic: | $ 0.15 | $ 0.19 |
Per common share attributable to common stockholders - diluted: | 0.15 | 0.18 |
Cash distributions declared per share of common stock | $ 0.43 | $ 0.41 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net income | $ 2,886 | $ 3,285 |
Other comprehensive gain (loss) | ||
Net unrealized gain on available-for-sale securities | 2 | |
Net unrealized gain (loss) on derivative instruments | 578 | (3,900) |
One Liberty Properties, Inc.'s share of joint venture net unrealized gain (loss) on derivative instruments | 28 | (105) |
Other comprehensive gain (loss) | 606 | (4,003) |
Comprehensive income (loss) | 3,492 | (718) |
Net (income) loss attributable to non-controlling interests | (21) | 2 |
Adjustment for derivative instruments attributable to non-controlling interests | (3) | 15 |
Comprehensive income (loss) attributable to One Liberty Properties, Inc. | $ 3,468 | $ (701) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Common Stock | Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Undistributed Net Income | Non-Controlling Interests in Consolidated Joint Ventures | Total |
Balances at Dec. 31, 2015 | $ 16,292 | $ 232,378 | $ (4,390) | $ 16,215 | $ 1,931 | $ 262,426 |
Distributions - common stock | ||||||
Cash - $.41 per share and $.43 per share for the year ended March 31, 2016 and 2017 respectively | (6,996) | (6,996) | ||||
Shares issued through equity offering program - net | 62 | 1,285 | 1,347 | |||
Restricted stock vesting | 73 | (73) | ||||
Shares issued through dividend reinvestment plan | 31 | 610 | 641 | |||
Distributions to non-controlling interests | (80) | (80) | ||||
Compensation expense - restricted stock | 666 | 666 | ||||
Net income (loss) | 3,287 | (2) | 3,285 | |||
Other comprehensive (loss) income | (3,988) | (15) | (4,003) | |||
Balances at Mar. 31, 2016 | 16,458 | 234,866 | (8,378) | 12,506 | 1,834 | 257,286 |
Balances at Dec. 31, 2016 | 17,600 | 262,511 | (1,479) | 11,501 | 1,794 | 291,927 |
Distributions - common stock | ||||||
Cash - $.41 per share and $.43 per share for the year ended March 31, 2016 and 2017 respectively | (7,912) | (7,912) | ||||
Shares issued through equity offering program - net | 28 | 607 | 635 | |||
Restricted stock vesting | 105 | (105) | ||||
Shares issued through dividend reinvestment plan | 40 | 932 | 972 | |||
Distributions to non-controlling interests | (31) | (31) | ||||
Compensation expense - restricted stock | 742 | 742 | ||||
Net income (loss) | 2,865 | 21 | 2,886 | |||
Other comprehensive (loss) income | 603 | 3 | 606 | |||
Balances at Mar. 31, 2017 | $ 17,773 | $ 264,687 | $ (876) | $ 6,454 | $ 1,787 | $ 289,825 |
CONSOLIDATED STATEMENTS OF CHA7
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | ||
Distributions - common stock, Cash per share (in dollars per share) | $ 0.43 | $ 0.41 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 2,886,000 | $ 3,285,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Gain on sale of real estate, net | (787,000) | |
Prepayment costs on debt | 423,000 | |
Increase in unbilled rent receivable | (203,000) | (601,000) |
Write-off of unbilled rent receivable | 263,000 | |
Bad debt expense | 296,000 | 153,000 |
Amortization of intangibles relating to leases, net | (246,000) | (160,000) |
Amortization of restricted stock expense | 742,000 | 666,000 |
Equity in earnings of unconsolidated joint ventures | (245,000) | (209,000) |
Distributions of earnings from unconsolidated joint ventures | 222,000 | 205,000 |
Depreciation and amortization | 5,553,000 | 4,185,000 |
Amortization and write-off of deferred financing costs | 227,000 | 244,000 |
Payment of leasing commissions | (347,000) | |
Increase in escrow, deposits, other assets and receivables | (323,000) | (444,000) |
Increase (decrease) in accrued expenses and other liabilities | 571,000 | (601,000) |
Net cash provided by operating activities | 9,743,000 | 6,012,000 |
Cash flows from investing activities: | ||
Purchase of real estate | (17,050,000) | |
Improvements to real estate | (412,000) | (1,523,000) |
Net proceeds from sale of real estate | 13,750,000 | |
Distributions of capital from unconsolidated joint ventures | 111,000 | 173,000 |
Net cash used in investing activities | (301,000) | (4,650,000) |
Cash flows from financing activities: | ||
Scheduled amortization payments of mortgages payable | (2,551,000) | (2,077,000) |
Repayment of mortgages payable | (30,515,000) | |
Proceeds from mortgage financings | 23,350,000 | |
Proceeds from sale of common stock, net | 635,000 | 1,347,000 |
Proceeds from bank line of credit | 20,500,000 | |
Repayment on bank line of credit | (5,000,000) | (8,900,000) |
Issuance of shares through dividend reinvestment plan | 972,000 | 641,000 |
Payment of financing costs | 160,000 | (503,000) |
Prepayment costs on debt | (423,000) | |
Distributions to non-controlling interests | (31,000) | (80,000) |
Cash distributions to common stockholders | (7,806,000) | (6,901,000) |
Net cash used in financing activities | (13,621,000) | (3,561,000) |
Net decrease in cash and cash equivalents | (4,179,000) | (2,199,000) |
Cash and cash equivalents at beginning of year | 17,420,000 | 12,736,000 |
Cash and cash equivalents at end of period | 13,241,000 | 10,537,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for interest expense | $ 4,323,000 | 4,129,000 |
Cash paid during the period for Federal excise tax | 190,000 | |
Supplemental schedule of non-cash investing and financing activities: | ||
Purchase accounting allocation - intangible lease assets | 959,000 | |
Purchase accounting allocation - intangible lease liabilities | $ (96,000) |
Organization and Background
Organization and Background | 3 Months Ended |
Mar. 31, 2017 | |
Organization and Background | |
Organization and Background | Note 1 — Organization and Background One Liberty Properties, Inc. (“OLP”) was incorporated in 1982 in Maryland. OLP is a self-administered and self-managed real estate investment trust (“REIT”). OLP acquires, owns and manages a geographically diversified portfolio consisting primarily of retail, industrial, restaurant, flex, health and fitness, and theater properties, many of which are subject to long-term net leases. As of March 31, 2017, OLP owns 119 properties, including six properties owned by consolidated joint ventures and five properties owned by unconsolidated joint ventures. The 119 properties are located in 30 states. |
Summary Accounting Policies
Summary Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Summary Accounting Policies | |
Summary Accounting Policies | Note 2 — Summary Accounting Policies Principles of Consolidation/Basis of Preparation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by U.S. Generally Accepted Accounting Principles (“GAAP”) for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statement disclosures. In the opinion of management, all adjustments of a normal recurring nature necessary for fair presentation have been included. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results for the full year. These statements should be read in conjunction with the consolidated financial statements and related notes included in OLP’s Annual Report on Form 10-K for the year ended December 31, 2016. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The consolidated financial statements include the accounts and operations of OLP, its wholly-owned subsidiaries, its joint ventures in which the Company, as defined, has a controlling interest, and variable interest entities (“VIEs”) of which the Company is the primary beneficiary. OLP and its consolidated subsidiaries are referred to herein as the “Company”. Material intercompany items and transactions have been eliminated in consolidation. Investment in Joint Ventures and Variable Interest Entities The Financial Accounting Standards Board, or FASB, provides guidance for determining whether an entity is a VIE. VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A VIE is required to be consolidated by its primary beneficiary, which is the party that (i) has the power to control the activities that most significantly impact the VIE’s economic performance and (ii) has the obligation to absorb losses, or the right to receive benefits, of the VIE that could potentially be significant to the VIE. The Company assesses the accounting treatment for each of its investments, including a review of each venture or limited liability company or partnership agreement, to determine the rights of each party and whether those rights are protective or participating. Additionally, the Company assesses the accounting treatment for any interests pursuant to which the Company may have a variable interest as a lessor. The agreements typically contain certain protective rights, such as the requirement of partner approval to sell, finance or refinance the property and to pay capital expenditures and operating expenditures outside of the approved budget or operating plan. Leases may contain certain protective rights, such as the right of sale and the receipt of certain escrow deposits. In situations where, among other things, the Company and its partners jointly (i) approve the annual budget, (ii) approve certain expenditures, (iii) prepare or review and approve the joint venture’s tax return before filing, and (iv) approve each lease at a property, the Company does not consolidate as the Company considers these to be substantive participation rights that result in shared, joint power over the activities that most significantly impact the performance of the joint venture or property. The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting. All investments in unconsolidated joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result, none of these joint ventures are VIEs. In addition, the Company shares power with its co-managing members over these entities, and therefore the entities are not consolidated. These investments are recorded initially at cost, as investments in unconsolidated joint ventures, and subsequently adjusted for their share of equity in earnings, cash contributions and distributions. None of the joint venture debt is recourse to the Company, subject to standard carve-outs. The Company periodically reviews its investments in unconsolidated joint ventures for other-than-temporary losses in investment value. Any decline that is not expected to be recovered based on the underlying assets of the investment is considered other than temporary and an impairment charge is recorded as a reduction in the carrying value of the investment. During the three months ended March 31, 2017, there was no impairment charge related to the Company’s investments in unconsolidated joint ventures. The Company has elected to follow the cumulative earnings approach when assessing, for the consolidated statement of cash flows, whether the distribution from the investee is a return of the investor’s investment as compared to a return on its investment. The source of the cash generated by the investee to fund the distribution is not a factor in the analysis (that is, it does not matter whether the cash was generated through investee refinancing, sale of assets or operating results). Consequently, the investor only considers the relationship between the cash received from the investee to its equity in the undistributed earnings of the investee, on a cumulative basis, in assessing whether the distribution from the investee is a return on or return of its investment. Cash received from the unconsolidated entity is presumed to be a return on the investment to the extent that, on a cumulative basis, distributions received by the investor are less than its share of the equity in the undistributed earnings of the entity. Tenant Reimbursements Tenant reimbursements represent tenants’ contractual obligations for recoverable real estate taxes and operating expenses and are recognized when earned. Reclassifications Certain amounts previously reported in the consolidated financial statements have been reclassified in the accompanying consolidated financial statements to conform to the current period’s presentation, primarily to change the presentation of Gain on sale of real estate, net on the consolidated statement of operations for the three months ended March 31, 2016. The Company has included a caption for Income before gain on sale of real estate, net, to present gain and losses on sales of properties in accordance with the Securities and Exchange Commission Rule 3-15(a) of Regulation S-X. The change was made for the three months ended March 31, 2016 because as prescribed by ASC 360-10-45-5, the previously reported gains from sale of real estate were not included as a component of Operating income. Such change was determined to be immaterial to the consolidated financial statements. |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Common Share | |
Earnings Per Common Share | Note 3 — Earnings Per Common Share Basic earnings per share was determined by dividing net income allocable to common stockholders for each period by the weighted average number of shares of common stock outstanding during the applicable period. Net income is also allocated to the unvested restricted stock outstanding during each period, as the restricted stock is entitled to receive dividends and is therefore considered a participating security. Unvested restricted stock is not allocated net losses and/or any excess of dividends declared over net income; such amounts are allocated entirely to the common stockholders, other than the holders of unvested restricted stock. The restricted stock units awarded under the Pay-for-Performance program are excluded from the basic earnings per share calculation, as these units are not participating securities (see Note 12). Diluted earnings per share reflects the potential dilution that could occur if securities or other rights exercisable for, or convertible into, common stock were exercised or converted or otherwise resulted in the issuance of common stock that shared in the earnings of the Company. For the three months ended March 31, 2017 and 2016, the diluted weighted average number of shares of common stock includes 114,000 and 107,000 shares, respectively (of an aggregate of 200,000 shares) of common stock underlying the restricted stock units awarded pursuant to the Pay-For-Performance program. For the three months ended March 31, 2017 and 2016, these amounts include (i) 100,000 and 100,000 shares, respectively, that would be issued upon satisfaction of a total stockholder return metric and (ii) 14,000 and 7,000 shares, respectively, that would be issued upon satisfaction of a return on capital metric. The following table provides a reconciliation of the numerator and denominator of earnings per share calculations (amounts in thousands, except per share amounts): Three Months Ended 2017 2016 Numerator for basic and diluted earnings per share: Net income $ $ Less net (income) loss attributable to non-controlling interests ) Less earnings allocated to unvested restricted stock (a) ) ) Net income available for common stockholders, basic and diluted $ $ Denominator for basic earnings per share: Weighted average common shares Effect of diluted securities: Restricted stock units awarded under Pay-for-Performance program Denominator for diluted earnings per share: Weighted average shares Earnings per common share, basic $ .15 $ .19 Earnings per common share, diluted $ .15 $ .18 Net income attributable to One Liberty Properties, Inc. common stockholders, net of non-controlling interests $ $ (a) Represents an allocation of distributed earnings to unvested restricted stock which, as participating securities, are entitled to receive dividends. |
Sale of Properties
Sale of Properties | 3 Months Ended |
Mar. 31, 2017 | |
Sale of Properties | |
Sale of Properties | Note 4 — Sale of Properties In February 2016, the Company sold a portfolio of eight retail properties located in Louisiana and Mississippi for a total sales price of $13,750,000. The sale resulted in a gain of $787,000, recorded as Gain on sale of real estate, net, for the three months ending March 31, 2016. In connection with the sale, the Company paid off the $7,801,000 mortgage balance on these properties and incurred a $380,000 expense for the early termination of the mortgage (included in Prepayment costs on debt) and a $26,000 write-off of deferred financing costs (included in Amortization and write-off of deferred financing costs). As a result of the sale, the Company also wrote-off, as a reduction to Gain on sale of real estate, net, $706,000 of unbilled straight-line rent receivable and $133,000 of unamortized intangible lease assets, net. |
Variable Interest Entities, Con
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures | 3 Months Ended |
Mar. 31, 2017 | |
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures | |
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures | Note 5 — Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures Variable Interest Entities — Ground Leases The Company determined that with respect to the properties identified in the table below, it has a variable interest through its ground leases and the three owner/operators (which are affiliated with one another) are VIEs because their equity investment at risk is insufficient to finance its activities without additional subordinated financial support. The Company further determined that it is not the primary beneficiary of any of these VIEs because the Company has shared power over certain activities that most significantly impact the owner/operator’s economic performance (i.e., shared rights on the sale of the property) and therefore, does not consolidate these VIEs for financial statement purposes. Accordingly, the Company accounts for these investments as land and the revenues from the ground leases as Rental income, net. Such rental income amounted to $888,000 and $428,000 for the three months ended March 31, 2017 and 2016, respectively. Included in these amounts, for the three months ended March 31, 2016, is rental income for a similarly structured transaction in Sandy Springs, Georgia, amounting to $151,000, which the Company sold in June 2016. The following chart details the Company’s VIEs through its ground leases and the aggregate carrying amount and maximum exposure to loss as of March 31, 2017 (dollars in thousands): Description of Property(a) Date Acquired Land # Units in Owner/ Type of Carrying The Meadows Apartments, Lakemoor, Illinois March 24, 2015 $ $ Land $ The Briarbrook Village Apartments, Wheaton, Illinois August 2, 2016 Land The Vue Apartments, Beachwood, Ohio August 16, 2016 Land Totals $ $ $ (a) Simultaneously with each purchase, the Company entered into a triple net ground lease with affiliates of Strategic Properties of North America, the owner/operators of these properties. (b) Simultaneously with the closing of each acquisition, the owner/operator obtained a mortgage from a third party which, together with the Company’s purchase of the land, provided substantially all of the aggregate funds to acquire the complex. The Company provided its land as collateral for the respective owner/operator’s mortgage loans; accordingly, each land position is subordinated to the applicable mortgage. Other than as described above, no other financial support has been provided by the Company to the owner/operator. Pursuant to the terms of the ground lease for the Wheaton, Illinois property, the owner/operator is obligated to make certain unit renovations as and when units become vacant. Cash reserves to cover such renovation work, received by the Company in conjunction with the purchase of the property, are disbursed when the unit renovations are completed. The related cash reserve balance for this property was $572,000 and $643,000 at March 31, 2017 and December 31, 2016, respectively, and is classified as Restricted cash on the consolidated balance sheets. Variable Interest Entity — Consolidated Joint Ventures With respect to the six consolidated joint ventures in which the Company holds between an 85% to 95% interest, the Company has determined such ventures are VIEs because the non-controlling interests do not hold substantive kick-out or participating rights. In each of these six joint ventures, the Company has determined it is the primary beneficiary of the VIE as it has the power to direct the activities that most significantly impact each joint venture’s performance including management, approval of expenditures, and the obligation to absorb the losses or rights to receive benefits. Accordingly, the Company consolidates the operations of these joint ventures for financial statement purposes. The joint ventures’ creditors do not have recourse to the assets of the Company other than those held by these joint ventures. The following is a summary of the consolidated VIEs’ carrying amounts and classification in the Company’s consolidated balance sheets, none of which are restricted (amounts in thousands): March 31, December 31, Land $ $ Buildings and improvements, net of depreciation of $2,989 and $2,732, respectively Cash Unbilled rent receivable Unamortized intangible lease assets, net Escrow, deposits and other assets and receivables Mortgages payable, net of deferred financing costs of $513 and $539, respectively Accrued expenses and other liabilities Unamortized intangible lease liabilities, net Accumulated other comprehensive loss ) ) Non-controlling interests in consolidated joint ventures At March 31, 2017, MCB Real Estate, LLC and its affiliates (‘‘MCB’’) are the Company’s joint venture partner in four consolidated joint ventures in which the Company has aggregate equity investments of approximately $10,483,000. The Company’s equity investment in its two other consolidated joint ventures is approximately $7,434,000. A joint venture with MCB, in which the Company has a net equity investment of $2,937,000, owns a vacant property formerly operated as a Pathmark supermarket in Philadelphia, Pennsylvania. At March 31, 2017, the mortgage debt on, and the net book value of, such property is $4,367,000 and $7,124,000, respectively. In 2015, this tenant filed for Chapter 11 bankruptcy protection, rejected the lease and vacated the property. Real estate expenses and mortgage interest for this property were $70,000 and $43,000 for the three months ended March 31, 2017 and $114,000 and $43,000 for the three months ended March 31, 2016, respectively. The Company has determined that no impairment charge is required currently with respect to this property. Distributions to each joint venture partner are determined pursuant to the applicable operating agreement and may not be pro rata to the equity interest each partner has in the applicable venture. |
Investment in Unconsolidated Jo
Investment in Unconsolidated Joint Ventures | 3 Months Ended |
Mar. 31, 2017 | |
Investment in Unconsolidated Joint Ventures | |
Investment in Unconsolidated Joint Ventures | Note 6 — Investment in Unconsolidated Joint Ventures At March 31, 2017 and December 31, 2016, the Company’s five unconsolidated joint ventures each owned and operated one property. The Company’s equity investment in such unconsolidated joint ventures at such dates totaled $10,772,000 and $10,833,000, respectively. The Company recorded equity in earnings of $245,000 and $209,000 for the three months ended March 31, 2017 and 2016, respectively. At March 31, 2017, MCB is the Company’s joint venture partner in one of these unconsolidated joint ventures in which the Company has an equity investment of approximately $8,307,000. |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 3 Months Ended |
Mar. 31, 2017 | |
Allowance for Doubtful Accounts | |
Allowance for Doubtful Accounts | Note 7 — Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of a tenant to make required rent payments. If the financial condition of a specific tenant were to deteriorate, adversely impacting its ability to make payments, allowances may be required. At March 31, 2017 and December 31, 2016, there was no balance in allowance for doubtful accounts. The Company records bad debt expense as a reduction of rental income and/or tenant reimbursements. In March 2017, hhgregg, Inc., the tenant at two of the Company’s properties in Illinois, filed for Chapter 11 bankruptcy protection. This tenant accounted for less than 1.5% of rental income for each of the three months ended March 31, 2017 and 2016. During the three months ended March 31, 2017, the Company recorded bad debt expense of $296,000 relating to tenant reimbursements due from this tenant and wrote-off (i) $263,000 of unbilled straight-line rent receivable as a reduction to rental income and (ii) $646,000 of tenant origination costs as an increase to depreciation expense. The Company has determined that no impairment charge is required with respect to these two properties, which at March 31, 2017, had an aggregate net book value of $5,934,000. In March 2016, Sports Authority Inc., the tenant at the Company’s Greenwood Village, Colorado property, filed for Chapter 11 bankruptcy protection and in June 2016, such tenant vacated the property. This tenant accounted for less than 1% of the Company’s rental income for the three months ended March 31, 2016. The Company recorded bad debt expense of $153,000 for the three months ended March 31, 2016, relating to rental income and tenant reimbursements due from this tenant. The Company has determined that no impairment charge is required with respect to this property, which at March 31, 2017, had a net book value of $2,605,000. |
Debt Obligations
Debt Obligations | 3 Months Ended |
Mar. 31, 2017 | |
Debt Obligations | |
Debt Obligations | Note 8 — Debt Obligations Mortgages Payable The following table details the Mortgages payable, net, balances per the consolidated balance sheets at March 31, 2017 and December 31, 2016 (amounts in thousands): March 31, December 31, Mortgages payable, gross $ $ Unamortized deferred financing costs ) ) Mortgages payable, net $ $ Line of Credit The Company has a credit facility with Manufacturers & Traders Trust Company, People’s United Bank, VNB New York, LLC, and Bank Leumi USA, pursuant to which the Company may borrow up to $100,000,000, subject to borrowing base requirements. The facility, which matures December 31, 2019, provides that the Company pay an interest rate equal to the one month LIBOR rate plus an applicable margin ranging from 175 basis points to 300 basis points depending on the ratio of the Company’s total debt to total value, as determined pursuant to the facility. At March 31, 2017 and 2016, the applicable margin was 175 basis points. An unused facility fee of .25% per annum applies to the facility. The average interest rate on the facility was approximately 2.52% and 2.18% for the three months ended March 31, 2017 and 2016, respectively. The Company was in compliance with all covenants at March 31, 2017. The following table details the Line of credit, net, balances per the consolidated balance sheets at March 31, 2017 and December 31, 2016 (amounts in thousands): March 31, December 31, Line of credit, gross $ $ Unamortized deferred financing costs ) ) Line of credit, net $ $ At May 1, 2017, there was an outstanding balance of $5,000,000 (before unamortized deferred financing costs) under the facility. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions | |
Related Party Transactions | Note 9 — Related Party Transactions Compensation and Services Agreement Pursuant to the compensation and services agreement with Majestic Property Management Corp. (‘‘Majestic’’), the Company pays fees to Majestic and Majestic provides the Company with the services of all affiliated executive, administrative, legal, accounting, clerical and property management personnel, as well as property acquisition, sale and lease consulting and brokerage services, consulting services in respect to mortgage financings and construction supervisory services. Majestic is wholly-owned by the Company’s vice-chairman and certain of the Company’s executive officers are officers of, and are compensated by, Majestic. The fee the Company pays Majestic is negotiated each year by the Company and Majestic in consultation with the Compensation and Audit Committees, and is approved by such committees and the independent directors. In consideration for the services described above, the Company paid Majestic $665,000 and $603,000 for the three months ended March 31, 2017 and 2016, respectively. Included in these fees are $285,000 and $241,000 of property management costs for the three months ended March 31, 2017 and 2016, respectively. The property management fee portion of the compensation and services agreement is paid based on 1.5% and 2.0% of the rental payments (including tenant reimbursements) actually received by the Company from net lease tenants and operating lease tenants, respectively. The Company does not pay Majestic property management fees with respect to properties managed by third parties. Majestic credits against the fees due to it under the Compensation and Services Agreement any management or other fees received by it from any joint venture in which the Company is a joint venture partner. The compensation and services agreement also provides for an additional payment to Majestic of $54,000 and $49,000 for the three months ended March 31, 2017 and 2016, respectively, for the Company’s share of all direct office expenses, including rent, telephone, postage, computer services, internet usage and supplies. The Company does not pay any fees or expenses to Majestic for such services except for the fees described in this paragraph. Executive officers and others providing services under the compensation and services agreement were awarded shares of restricted stock and restricted stock units under the Company’s stock incentive plans (described in Note 12). The costs of the plans charged to the Company’s operations applicable to the executive officers and others providing services under the compensation and services agreement amounted to $381,000 and $344,000 for the three months ended March 31, 2017 and 2016, respectively. The fees paid under the compensation and services agreement (except for the property management fees which are included in Real estate expenses) and the costs of the stock incentive plans are included in General and administrative expense on the consolidated statements of income for the three months ended March 31, 2017 and 2016. Joint Venture Partners and Affiliates The Company paid an aggregate of $49,000 and $51,000 for the three months ended March 31, 2017 and 2016, respectively, to the partners or their affiliates (none of whom are officers, directors or employees of the Company) of its consolidated joint ventures for property management fees, which are included in Real estate expenses on the consolidated statements of income. Additionally, unconsolidated joint ventures of the Company paid management fees of $46,000 and $35,000 for the three months ended March 31, 2017 and 2016, respectively, to the other partner of the venture, which reduced Equity in earnings of unconsolidated joint ventures on the consolidated statements of income by $23,000 and $17,500 for the three months ended March 31, 2017 and 2016, respectively. Other The Company paid quarterly fees of $69,000 and $65,625 to the Company’s chairman for the three months ended March 31, 2017 and 2016, respectively. The Company paid quarterly fees of $27,500 and $26,250 to the Company’s vice-chairman for the three months ended March 31, 2017 and 2016, respectively. These fees are included in General and administrative expenses on the consolidated statements of income. The Company obtains its property insurance in conjunction with Gould Investors L.P. (“Gould Investors”), a related party and reimburses Gould Investors annually for the Company’s insurance cost relating to its properties. Included in Real estate expenses on the consolidated statements of income is insurance expense of $173,000 and $101,000 for the three months ended March 31, 2017 and 2016, respectively, of amounts reimbursed to Gould Investors in prior periods. |
Common Stock Cash Dividend
Common Stock Cash Dividend | 3 Months Ended |
Mar. 31, 2017 | |
Common Stock Cash Dividend | |
Common Stock Cash Dividend | Note 10 — Common Stock Cash Dividend On March 10, 2017, the Board of Directors declared a quarterly cash dividend of $.43 per share on the Company’s common stock, totaling $7,912,000. The quarterly dividend was paid on April 7, 2017 to stockholders of record on March 24, 2017. |
Shares Issued through Equity Of
Shares Issued through Equity Offering Program | 3 Months Ended |
Mar. 31, 2017 | |
Shares Issued through Equity Offering Program | |
Shares Issued Through Equity Offering Program | Note 11 — Shares Issued through Equity Offering Program On March 20, 2014, the Company entered into an amended and restated equity offering sales agreement to sell shares of the Company’s common stock from time to time with an aggregate sales price of up to approximately $38,360,000, through an “at the market” equity offering program. During the three months ended March 31, 2017, the Company sold 27,800 shares for proceeds of $692,000, net of commissions of $7,000, and incurred offering costs of $57,000 for professional fees. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Stock Based Compensation | |
Stock Based Compensation | Note 12 — Stock Based Compensation The Company’s 2016 Incentive Plan (‘‘Plan’’), approved by the Company’s stockholders in June 2016, permits the Company to grant, among other things, stock options, restricted stock units, performance share awards and dividend equivalent rights and any one or more of the foregoing to its employees, officers, directors and consultants. A maximum of 750,000 shares of the Company’s common stock is authorized for issuance pursuant to this Plan, of which 140,000 shares were outstanding as of March 31, 2017, none of which have yet vested. Under the Company’s 2012 and 2009 equity incentive plans, an aggregate of 686,400 shares of restricted stock and restricted stock units are outstanding as of March 31, 2017, none of which have yet vested. No additional awards may be granted under these plans. For accounting purposes, the restricted stock is not included in the shares shown as outstanding on the balance sheet until they vest; however, dividends are paid on the unvested shares. The restricted stock grants are charged to General and administrative expense over the respective vesting periods based on the market value of the common stock on the grant date. All unvested restricted stock awards provide for vesting upon the fifth anniversary of the date of grant, and under certain circumstances may vest earlier. Pursuant to the Pay-for-Performance program, there are 200,000 performance share awards in the form of restricted stock units (the “Units”) outstanding under the Company’s 2009 Incentive Plan. The holders of Units are not entitled to dividends or to vote the underlying shares until the Units vest and shares are issued. Accordingly, for financial statement purposes, the shares underlying the Units are not included in the shares shown as outstanding on the balance sheet. No Units were forfeited or vested during the three months ended March 31, 2017. The following is a summary of the activity of the equity incentive plans excluding, except as otherwise noted, the 200,000 Units: Three Months Ended 2017 2016 Restricted stock grants Per share grant price $ $ Deferred compensation to be recognized over vesting period $ $ Number of non-vested shares: Non-vested beginning of period Grants Vested during period ) ) Forfeitures ) ) Non-vested end of period The following information includes the 200,000 Units: Average per share value of non-vested shares (based on grant price) $ $ Value of stock vested during the period (based on grant price) $ $ Average per share value of shares forfeited during the period (based on grant price) $ $ The total charge to operations for all incentive plans is as follows: Outstanding restricted stock grants $ $ Outstanding restricted stock units Total charge to operations $ $ As of March 31, 2017, there were approximately $8,499,000 of total compensation costs related to non-vested awards that have not yet been recognized, including $37,000 related to the Units. Assumptions relating to the performance metrics relating to the Units (see Note 3) are re-evaluated quarterly. These compensation costs will be charged to General and administrative expense over the remaining respective vesting periods. The weighted average vesting period is approximately 2.9 years for the restricted stock and three months for the Units - the seven year performance cycle for the Units will be completed on June 30, 2017. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | Note 13 — Fair Value Measurements The Company measures the fair value of financial instruments based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. In accordance with the fair value hierarchy, Level 1 assets/liabilities are valued based on quoted prices for identical instruments in active markets, Level 2 assets/liabilities are valued based on quoted prices in active markets for similar instruments, on quoted prices in less active or inactive markets, or on other “observable” market inputs and Level 3 assets/liabilities are valued based significantly on “unobservable” market inputs. The carrying amounts of cash and cash equivalents, restricted cash, escrow, deposits and other assets and receivables (excluding interest rate swaps), dividends payable, and accrued expenses and other liabilities (excluding interest rate swaps), are not measured at fair value on a recurring basis, but are considered to be recorded at amounts that approximate fair value. At March 31, 2017, the $410,910,000 estimated fair value of the Company’s mortgages payable is greater than their $396,641,000 carrying value (before unamortized deferred financing costs) by approximately $14,269,000 assuming a blended market interest rate of 3.74% based on the 9.0 year weighted average remaining term to maturity of the mortgages. At December 31, 2016, the $413,916,000 estimated fair value of the Company’s mortgages payable is greater than their $399,192,000 carrying value (before unamortized deferred financing costs) by approximately $14,724,000 assuming a blended market interest rate of 3.74% based on the 9.3 year weighted average remaining term to maturity of the mortgages. At March 31, 2017 and December 31, 2016, the carrying amount of the Company’s line of credit (before unamortized deferred financing costs) of $5,000,000 and $10,000,000, respectively, approximates its fair value. The fair value of the Company’s mortgages payable and line of credit are estimated using unobservable inputs such as available market information and discounted cash flow analysis based on borrowing rates the Company believes it could obtain with similar terms and maturities. These fair value measurements fall within Level 3 of the fair value hierarchy. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Fair Value on a Recurring Basis The fair value of the Company’s derivative financial instruments, using Level 2 inputs, was determined to be the following (amounts in thousands) : As of Carrying and Financial assets: Interest rate swaps March 31, 2017 $ December 31, 2016 Financial liabilities: Interest rate swaps March 31, 2017 $ December 31, 2016 The Company does not own any financial instruments that are classified as Level 1 or 3. The Company’s objective in using interest rate swaps is to add stability to interest expense. The Company does not use derivatives for trading or speculative purposes. Fair values are approximated using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. Although the Company has determined the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with it use Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparty. As of March 31, 2017, the Company has assessed and determined the impact of the credit valuation adjustments on the overall valuation of its derivative positions is not significant. As a result, the Company determined its derivative valuation is classified in Level 2 of the fair value hierarchy. As of March 31, 2017, the Company had entered into 30 interest rate derivatives, all of which were interest rate swaps, related to 30 outstanding mortgage loans with an aggregate $140,939,000 notional amount and mature between 2018 and 2028 (weighted average remaining term to maturity of 7.6 years). Such interest rate swaps, all of which were designated as cash flow hedges, converted LIBOR based variable rate mortgages to fixed annual rate mortgages (with interest rates ranging from 3.02% to 5.75% and a weighted average interest rate of 4.16% at March 31, 2017). The fair value of the Company’s derivatives designated as hedging instruments in asset and liability positions are reflected as other assets or other liabilities on the consolidated balance sheets. Three of the Company’s unconsolidated joint ventures, in which wholly-owned subsidiaries of the Company are 50% partners, had two interest rate derivatives outstanding at March 31, 2017 with an aggregate $10,683,000 notional amount. These interest rate swaps, which were designated as cash flow hedges, have interest rates of 3.49% and 5.81% and mature in 2022 and 2018, respectively. The following table presents the effect of the Company’s derivative financial instruments on the consolidated statements of income for the periods presented (amounts in thousands): Three Months Ended 2017 2016 One Liberty Properties, Inc. and Consolidated Subsidiaries Amount of gain (loss) recognized on derivatives in Other comprehensive loss $ $ ) Amount of loss reclassification from Accumulated other comprehensive loss into Interest expense ) ) Unconsolidated Joint Ventures (Company’s share) Amount of gain (loss) recognized on derivatives in Other comprehensive loss $ $ ) Amount of loss reclassification from Accumulated other comprehensive loss into Equity in earnings of unconsolidated joint ventures ) ) No gain or loss was recognized with respect to hedge ineffectiveness or to amounts excluded from effectiveness testing on the Company’s cash flow hedges for the three months ended March 31, 2017 and 2016. During the twelve months ending March 31, 2018, the Company estimates an additional $1,357,000 will be reclassified from other Accumulated other comprehensive loss as an increase to Interest expense and $51,000 will be reclassified from Accumulated other comprehensive loss as a decrease to Equity in earnings of unconsolidated joint ventures. The derivative agreements in effect at March 31, 2017 provide that if the wholly-owned subsidiary of the Company which is a party to the agreement defaults or is capable of being declared in default on any of its indebtedness, then a default can be declared on such subsidiary’s derivative obligation. In addition, the Company is a party to the derivative agreements and if there is a default by the subsidiary on the loan subject to the derivative agreement to which the Company is a party and if there are swap breakage losses on account of the derivative being terminated early, then the Company could be held liable for such swap breakage losses, if any. During the three months ended March 31, 2016, the Company terminated two interest rate swaps in connection with the early payoff of the related mortgages. The Company accelerated the reclassification of $24,000 in other comprehensive loss to earnings as a result of these hedged forecasted transactions being terminated which are included in Prepayment costs on debt on the consolidated statement of income. There were no such accelerated amounts in the three months ended March 31, 2017. As of March 31, 2017, the fair value of the derivatives in a liability position, including accrued interest of $94,000, but excluding any adjustments for nonperformance risk, was approximately $2,494,000. In the event the Company breaches any of the contractual provisions of the derivative contracts, it would be required to settle its obligations thereunder at their termination liability value of $2,494,000. This termination liability value, net of $110,000 adjustments for nonperformance risk, or $2,384,000, is included in Accrued expenses and other liabilities on the consolidated balance sheet at March 31, 2017. |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2017 | |
Commitments | |
Commitments | Note 14 — Commitments The Company is contractually required (i) from 2017 through 2018, to spend approximately $7,800,000 for building expansion and improvements at its property tenanted by L-3 Communications, located in Hauppauge, New York and (ii) to reimburse Regal Cinemas, a tenant in Greensboro, North Carolina, $3,000,000 if and when the tenant completes specified improvements to the property. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | Note 15 — New Accounting Pronouncements In February 2017, the FASB issued ASU No. 2017-05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets, which clarifies the scope and application on the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales. The effective date of the standard will be fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact, if any, it may have on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , which requires an entity to evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, and if that threshold is met, the asset group is not a business. It also requires a business to include at least one substantive process and narrows the definition of outputs. The effective date of the standard will be fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and early adoption is permitted. The Company has elected early adoption as of January 1, 2017, and its adoption did not have any impact on its consolidated financial statements for the three months ended March 31, 2017. In future periods, real estate acquisitions will generally be considered asset acquisitions and, as such, acquisition related costs will be capitalized to real estate assets and depreciated over the life of the building. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the Emerging Issues Task Force) , which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amount generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The effective date of the standard will be fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, and early adoption is permitted. The Company does not expect that the adoption of this guidance will have any significant effect on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which changes how entities will measure credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. The guidance replaces the current ‘incurred loss’ model with an ‘expected loss’ approach. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted after December 2018. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases , which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The effective date of the standard will be fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, and early adoption is permitted. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating this new standard but it is not expected to have a significant impact on its consolidated financial statements. The Company anticipates adopting this guidance January 1, 2019 and will apply the modified retrospective approach. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09), which outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. The standard can be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which delays the effective date of ASU 2014-09 by one year. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. ASU 2014-09, ASU 2015-14 and ASU 2016-08 are herein collectively referred to as the “New Revenue Recognition Standards”. The New Revenue Recognition Standards are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted but not before annual periods beginning after December 15, 2016. The Company anticipates adopting the New Revenue Recognition Standards on January 1, 2018, and applying the cumulative-effect adoption method. Since the Company’s revenue is primarily related to leasing activities, management does not anticipate that the adoption of the New Revenue Recognition Standards will have a material impact on the consolidated financial statements. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events | |
Subsequent Events | Note 16 — Subsequent Events Subsequent events have been evaluated and except as disclosed below, in Note 8 (Debt Obligations) and Note 10 (Common Stock Cash Dividend), there were no other events relative to the Company’s consolidated financial statements that require additional disclosure. On May 8, 2017, the Company sold a property in Greenwood Village, Colorado for approximately $9,100,000, net of closing costs. At March 31, 2017, the net book value of the property’s land, building and improvements was $2,600,000, which is included in Real estate investments, net, on the consolidated balance sheet. The Company anticipates recognizing a gain of approximately $6,500,000 during the three months ended June 30, 2017. |
Summary Accounting Policies (Po
Summary Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Summary Accounting Policies | |
Principles of Consolidation/Basis of Preparation | Principles of Consolidation/Basis of Preparation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by U.S. Generally Accepted Accounting Principles (“GAAP”) for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statement disclosures. In the opinion of management, all adjustments of a normal recurring nature necessary for fair presentation have been included. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results for the full year. These statements should be read in conjunction with the consolidated financial statements and related notes included in OLP’s Annual Report on Form 10-K for the year ended December 31, 2016. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The consolidated financial statements include the accounts and operations of OLP, its wholly-owned subsidiaries, its joint ventures in which the Company, as defined, has a controlling interest, and variable interest entities (“VIEs”) of which the Company is the primary beneficiary. OLP and its consolidated subsidiaries are referred to herein as the “Company”. Material intercompany items and transactions have been eliminated in consolidation. |
Investment in Joint Ventures and Variable Interest Entities | Investment in Joint Ventures and Variable Interest Entities The Financial Accounting Standards Board, or FASB, provides guidance for determining whether an entity is a VIE. VIEs are defined as entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support. A VIE is required to be consolidated by its primary beneficiary, which is the party that (i) has the power to control the activities that most significantly impact the VIE’s economic performance and (ii) has the obligation to absorb losses, or the right to receive benefits, of the VIE that could potentially be significant to the VIE. The Company assesses the accounting treatment for each of its investments, including a review of each venture or limited liability company or partnership agreement, to determine the rights of each party and whether those rights are protective or participating. Additionally, the Company assesses the accounting treatment for any interests pursuant to which the Company may have a variable interest as a lessor. The agreements typically contain certain protective rights, such as the requirement of partner approval to sell, finance or refinance the property and to pay capital expenditures and operating expenditures outside of the approved budget or operating plan. Leases may contain certain protective rights, such as the right of sale and the receipt of certain escrow deposits. In situations where, among other things, the Company and its partners jointly (i) approve the annual budget, (ii) approve certain expenditures, (iii) prepare or review and approve the joint venture’s tax return before filing, and (iv) approve each lease at a property, the Company does not consolidate as the Company considers these to be substantive participation rights that result in shared, joint power over the activities that most significantly impact the performance of the joint venture or property. The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting. All investments in unconsolidated joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result, none of these joint ventures are VIEs. In addition, the Company shares power with its co-managing members over these entities, and therefore the entities are not consolidated. These investments are recorded initially at cost, as investments in unconsolidated joint ventures, and subsequently adjusted for their share of equity in earnings, cash contributions and distributions. None of the joint venture debt is recourse to the Company, subject to standard carve-outs. The Company periodically reviews its investments in unconsolidated joint ventures for other-than-temporary losses in investment value. Any decline that is not expected to be recovered based on the underlying assets of the investment is considered other than temporary and an impairment charge is recorded as a reduction in the carrying value of the investment. During the three months ended March 31, 2017, there was no impairment charge related to the Company’s investments in unconsolidated joint ventures. The Company has elected to follow the cumulative earnings approach when assessing, for the consolidated statement of cash flows, whether the distribution from the investee is a return of the investor’s investment as compared to a return on its investment. The source of the cash generated by the investee to fund the distribution is not a factor in the analysis (that is, it does not matter whether the cash was generated through investee refinancing, sale of assets or operating results). Consequently, the investor only considers the relationship between the cash received from the investee to its equity in the undistributed earnings of the investee, on a cumulative basis, in assessing whether the distribution from the investee is a return on or return of its investment. Cash received from the unconsolidated entity is presumed to be a return on the investment to the extent that, on a cumulative basis, distributions received by the investor are less than its share of the equity in the undistributed earnings of the entity. |
Tenant Reimbursements | Tenant Reimbursements Tenant reimbursements represent tenants’ contractual obligations for recoverable real estate taxes and operating expenses and are recognized when earned. |
Reclassifications | Reclassifications Certain amounts previously reported in the consolidated financial statements have been reclassified in the accompanying consolidated financial statements to conform to the current period’s presentation, primarily to change the presentation of Gain on sale of real estate, net on the consolidated statement of operations for the three months ended March 31, 2016. The Company has included a caption for Income before gain on sale of real estate, net, to present gain and losses on sales of properties in accordance with the Securities and Exchange Commission Rule 3-15(a) of Regulation S-X. The change was made for the three months ended March 31, 2016 because as prescribed by ASC 360-10-45-5, the previously reported gains from sale of real estate were not included as a component of Operating income. Such change was determined to be immaterial to the consolidated financial statements. |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Common Share | |
Schedule of reconciliation of numerator and denominator of earnings per share calculations | The following table provides a reconciliation of the numerator and denominator of earnings per share calculations (amounts in thousands, except per share amounts): Three Months Ended 2017 2016 Numerator for basic and diluted earnings per share: Net income $ $ Less net (income) loss attributable to non-controlling interests ) Less earnings allocated to unvested restricted stock (a) ) ) Net income available for common stockholders, basic and diluted $ $ Denominator for basic earnings per share: Weighted average common shares Effect of diluted securities: Restricted stock units awarded under Pay-for-Performance program Denominator for diluted earnings per share: Weighted average shares Earnings per common share, basic $ .15 $ .19 Earnings per common share, diluted $ .15 $ .18 Net income attributable to One Liberty Properties, Inc. common stockholders, net of non-controlling interests $ $ (a) Represents an allocation of distributed earnings to unvested restricted stock which, as participating securities, are entitled to receive dividends. |
Variable Interest Entities, C27
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Unconsolidated JV | |
Schedule of Variable Interest Entities through Ground Leases and Carrying Amount and Maximum Exposure to Loss | The following chart details the Company’s VIEs through its ground leases and the aggregate carrying amount and maximum exposure to loss as of March 31, 2017 (dollars in thousands): Description of Property(a) Date Acquired Land # Units in Owner/ Type of Carrying The Meadows Apartments, Lakemoor, Illinois March 24, 2015 $ $ Land $ The Briarbrook Village Apartments, Wheaton, Illinois August 2, 2016 Land The Vue Apartments, Beachwood, Ohio August 16, 2016 Land Totals $ $ $ (a) Simultaneously with each purchase, the Company entered into a triple net ground lease with affiliates of Strategic Properties of North America, the owner/operators of these properties. (b) Simultaneously with the closing of each acquisition, the owner/operator obtained a mortgage from a third party which, together with the Company’s purchase of the land, provided substantially all of the aggregate funds to acquire the complex. The Company provided its land as collateral for the respective owner/operator’s mortgage loans; accordingly, each land position is subordinated to the applicable mortgage. Other than as described above, no other financial support has been provided by the Company to the owner/operator. |
Consolidated JV | |
Summary of our variable interests in identified VIEs | The following is a summary of the consolidated VIEs’ carrying amounts and classification in the Company’s consolidated balance sheets, none of which are restricted (amounts in thousands): March 31, December 31, Land $ $ Buildings and improvements, net of depreciation of $2,989 and $2,732, respectively Cash Unbilled rent receivable Unamortized intangible lease assets, net Escrow, deposits and other assets and receivables Mortgages payable, net of deferred financing costs of $513 and $539, respectively Accrued expenses and other liabilities Unamortized intangible lease liabilities, net Accumulated other comprehensive loss ) ) Non-controlling interests in consolidated joint ventures |
Debt Obligations (Tables)
Debt Obligations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Obligations | |
Schedule of Mortgages payable, net | The following table details the Mortgages payable, net, balances per the consolidated balance sheets at March 31, 2017 and December 31, 2016 (amounts in thousands): March 31, December 31, Mortgages payable, gross $ $ Unamortized deferred financing costs ) ) Mortgages payable, net $ $ |
Schedule of Line of credit, net | The following table details the Line of credit, net, balances per the consolidated balance sheets at March 31, 2017 and December 31, 2016 (amounts in thousands): March 31, December 31, Line of credit, gross $ $ Unamortized deferred financing costs ) ) Line of credit, net $ $ |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stock Based Compensation | |
Summary of the activity of the equity incentive plans | Three Months Ended 2017 2016 Restricted stock grants Per share grant price $ $ Deferred compensation to be recognized over vesting period $ $ Number of non-vested shares: Non-vested beginning of period Grants Vested during period ) ) Forfeitures ) ) Non-vested end of period The following information includes the 200,000 Units: Average per share value of non-vested shares (based on grant price) $ $ Value of stock vested during the period (based on grant price) $ $ Average per share value of shares forfeited during the period (based on grant price) $ $ The total charge to operations for all incentive plans is as follows: Outstanding restricted stock grants $ $ Outstanding restricted stock units Total charge to operations $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements | |
Schedule of derivative financial instruments measured at fair value, using Level 2 inputs | The fair value of the Company’s derivative financial instruments, using Level 2 inputs, was determined to be the following (amounts in thousands) : As of Carrying and Financial assets: Interest rate swaps March 31, 2017 $ December 31, 2016 Financial liabilities: Interest rate swaps March 31, 2017 $ December 31, 2016 |
Schedule of effect of derivative financial instruments on statements of income | The following table presents the effect of the Company’s derivative financial instruments on the consolidated statements of income for the periods presented (amounts in thousands): Three Months Ended 2017 2016 One Liberty Properties, Inc. and Consolidated Subsidiaries Amount of gain (loss) recognized on derivatives in Other comprehensive loss $ $ ) Amount of loss reclassification from Accumulated other comprehensive loss into Interest expense ) ) Unconsolidated Joint Ventures (Company’s share) Amount of gain (loss) recognized on derivatives in Other comprehensive loss $ $ ) Amount of loss reclassification from Accumulated other comprehensive loss into Equity in earnings of unconsolidated joint ventures ) ) |
Organization and Background (De
Organization and Background (Details) | Mar. 31, 2017stateproperty |
Organization and Background | |
Number of real estate properties | 119 |
Number of states in which properties are located | state | 30 |
Properties owned by consolidated joint ventures | |
Organization and Background | |
Number of real estate properties | 6 |
Properties owned by unconsolidated joint ventures | |
Organization and Background | |
Number of real estate properties | 5 |
Summary Accounting Policies (De
Summary Accounting Policies (Details) | 3 Months Ended |
Mar. 31, 2017USD ($)item | |
Investment in Joint Ventures and Variable Interest Entities | |
Number of Unconsolidated Joint Venture VIEs | item | 0 |
Recourse debt of joint venture | $ | $ 0 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Earnings Per Common Share | |||
Number of shares awarded under Pay-for-Performance program included in diluted weighted average number of shares | 114,000 | 107,000 | |
Underlying number of shares awarded under Pay-for-Performance program included in calculation of diluted weighted average number of shares | 200,000 | 200,000 | |
Number of shares awarded under Pay-for-Performance program included in diluted weighted average number of shares pursuant to return metric | 100,000 | 100,000 | |
Number of shares awarded under Pay-for-Performance program included in diluted weighted average number of shares pursuant to return on capital metric | 14,000 | 7,000 | |
Numerator for basic and diluted earnings per share: | |||
Net income | $ 2,886 | $ 3,285 | |
Net (income) loss attributable to non-controlling interests | (21) | 2 | |
Less earnings allocated to unvested restricted stock | [1] | (269) | (248) |
Net income available for common stockholders, basic | 2,596 | 3,039 | |
Net income available for common stockholders, diluted | $ 2,596 | $ 3,039 | |
Denominator for basic earnings per share: | |||
Weighted average common shares | 17,751,000 | 16,388,000 | |
Effect of diluted securities: | |||
Restricted stock units awarded under Pay-for-Performance program (in shares) | 114,000 | 107,000 | |
Denominator for diluted earnings per share: weighted average shares | 17,865,000 | 16,495,000 | |
Earnings per common share, basic | $ 0.15 | $ 0.19 | |
Earnings per common share, diluted | $ 0.15 | $ 0.18 | |
Net income attributable to One Liberty Properties, Inc. | $ 2,865 | $ 3,287 | |
[1] | Represents an allocation of distributed earnings to unvested restricted stock which, as participating securities, are entitled to receive dividends |
Sale of Properties (Details)
Sale of Properties (Details) - Portfolio of eight retail properties, Louisiana and Mississippi | 1 Months Ended | 3 Months Ended |
Feb. 29, 2016USD ($)property | Mar. 31, 2016USD ($) | |
Sale of Properties | ||
Number of real estate properties sold | property | 8 | |
Gross Sales Price | $ 13,750,000 | |
Gain on Sales of Real Estate, Net | $ 787,000 | |
Mortgage balance paid off | 7,801,000 | |
Early termination of the mortgage | 380,000 | |
Write-off of deferred financing costs | 26,000 | |
Write-off of unbilled straight-line rent receivable | 706,000 | |
Write-off of intangible lease assets | $ 133,000 |
Variable Interest Entities, C35
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures - Ground Leases (Details) | 3 Months Ended | ||
Mar. 31, 2017USD ($)item | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Variable Interest Entities | |||
Number of VIEs | item | 3 | ||
Restricted cash | $ 572,000 | $ 643,000 | |
The Meadows Apartments, Lakemoor, Illinois; Briarbrook Village Apartments, Wheaton, Illinois and Vue Apartments, Beachwood, Ohio | |||
Variable Interest Entities | |||
Land Contract Purchase Price | $ 33,726,000 | ||
Units in Apartment Complex | item | 1,186 | ||
Owner/ Operator Mortgage from Third Party | $ 150,679,000 | ||
Carrying Amount and Maximum Exposure to Loss | 34,029,000 | ||
The Meadows Apartments, Lakemoor, Illinois | |||
Variable Interest Entities | |||
Land Contract Purchase Price | $ 9,300,000 | ||
Units in Apartment Complex | item | 496 | ||
Owner/ Operator Mortgage from Third Party | $ 43,824,000 | ||
The Meadows Apartments, Lakemoor, Illinois | Land | |||
Variable Interest Entities | |||
Carrying Amount and Maximum Exposure to Loss | 9,592,000 | ||
The Briarbrook Village Apartments Wheaton, Illinois | |||
Variable Interest Entities | |||
Land Contract Purchase Price | $ 10,530,000 | ||
Units in Apartment Complex | item | 342 | ||
Owner/ Operator Mortgage from Third Party | $ 39,411,000 | ||
The Briarbrook Village Apartments Wheaton, Illinois | Land | |||
Variable Interest Entities | |||
Carrying Amount and Maximum Exposure to Loss | 10,536,000 | ||
The Vue Apartments, Beachwood, Ohio | |||
Variable Interest Entities | |||
Land Contract Purchase Price | $ 13,896,000 | ||
Units in Apartment Complex | item | 348 | ||
Owner/ Operator Mortgage from Third Party | $ 67,444,000 | ||
The Vue Apartments, Beachwood, Ohio | Land | |||
Variable Interest Entities | |||
Carrying Amount and Maximum Exposure to Loss | 13,901,000 | ||
The Meadows Apartments, Lakemoor, Illinois; Briarbrook Village Apartments, Wheaton, Illinois; Vue Apartments, Beachwood, Ohio and River Crossing Apartments, Sandy Springs, Georgia | |||
Variable Interest Entities | |||
Revenue from the ground lease | $ 888,000 | $ 428,000 | |
River Crossing Apartments, Sandy Springs, Georgia | |||
Variable Interest Entities | |||
Revenue from the ground lease | $ 151,000 |
Variable Interest Entities, C36
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures - Consolidated Joint Ventures (Details) - Consolidated JV | 3 Months Ended |
Mar. 31, 2017item | |
Variable Interest Entities | |
Number of joint ventures with controlling interest | 6 |
Consolidated VIE entities | |
Variable Interest Entities | |
Number of joint ventures with controlling interest | 6 |
Minimum | |
Variable Interest Entities | |
Ownership interest in consolidated joint venture of the company (as a percent) | 85.00% |
Maximum | |
Variable Interest Entities | |
Ownership interest in consolidated joint venture of the company (as a percent) | 95.00% |
Variable Interest Entities, C37
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures - Summary of Consolidated VIE's (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Consolidated VIEs Carrying Amount of Assets and Liabilities | ||
Unbilled rent receivable | $ 13,737 | $ 13,797 |
Unamortized intangible lease assets, net | 30,823 | 32,645 |
Escrow, deposits and other assets and receivables | 7,012 | 6,894 |
Mortgages payable, net of deferred financing costs of $513 and $539, respectively | 392,656 | 394,898 |
Accrued expenses and other liabilities | 10,561 | 10,470 |
Unamortized intangible lease liabilities, net | 18,838 | 19,280 |
Accumulated other comprehensive loss | (876) | (1,479) |
Non-controlling interests in consolidated joint ventures | 1,787 | 1,794 |
Consolidated VIE entities | ||
Consolidated VIEs Carrying Amount of Assets and Liabilities | ||
Land | 17,844 | 17,844 |
Buildings and improvements, net of depreciation of $2,989 and $2,732, respectively | 32,597 | 32,535 |
Cash | 1,451 | 1,796 |
Unbilled rent receivable | 815 | 775 |
Unamortized intangible lease assets, net | 1,497 | 1,595 |
Escrow, deposits and other assets and receivables | 1,509 | 1,355 |
Mortgages payable, net of deferred financing costs of $513 and $539, respectively | 32,908 | 33,121 |
Accrued expenses and other liabilities | 990 | 893 |
Unamortized intangible lease liabilities, net | 2,153 | 2,200 |
Accumulated other comprehensive loss | (42) | (70) |
Non-controlling interests in consolidated joint ventures | 1,787 | 1,794 |
Depreciation | 2,989 | 2,732 |
Deferred financing costs | $ 513 | $ 539 |
Variable Interest Entities, C38
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures - MCB Real Estate, LLC (Details) | 3 Months Ended | ||
Mar. 31, 2017USD ($)item | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Consolidated VIEs Carrying Amount of Assets and Liabilities | |||
Mortgages payable | $ 392,656,000 | $ 394,898,000 | |
Real estate expenses | $ 2,704,000 | $ 2,175,000 | |
Consolidated JV | |||
Consolidated VIEs Carrying Amount of Assets and Liabilities | |||
Number of joint ventures with controlling interest | item | 6 | ||
Other Consolidated JV | |||
Consolidated VIEs Carrying Amount of Assets and Liabilities | |||
Number of joint ventures with controlling interest | item | 2 | ||
Investment in consolidated joint ventures | $ 7,434,000 | ||
MCB Real Estate LLC And Its Affiliates | Consolidated JV | |||
Consolidated VIEs Carrying Amount of Assets and Liabilities | |||
Number of joint ventures with controlling interest | item | 4 | ||
Investment in consolidated joint ventures | $ 10,483,000 | ||
MCB Real Estate LLC And Its Affiliates | Consolidated JV | Pathmark supermarket in Philadelphia, Pennsylvania | |||
Consolidated VIEs Carrying Amount of Assets and Liabilities | |||
Investment in consolidated joint ventures | 2,937,000 | ||
Mortgages payable | 4,367,000 | ||
Net book value of property | 7,124,000 | ||
Real estate expenses | 70,000 | 114,000 | |
Mortgage interest | 43,000 | $ 43,000 | |
Impairment charge | $ 0 |
Investment in Unconsolidated 39
Investment in Unconsolidated Joint Ventures (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017USD ($)propertyitem | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)propertyitem | |
Investment in Unconsolidated Joint Ventures. | |||
Number of unconsolidated joint ventures | item | 5 | 5 | |
Number of properties owned and operated by each unconsolidated joint venture | property | 1 | 1 | |
Investment in unconsolidated joint ventures | $ 10,772,000 | $ 10,833,000 | |
Equity in earnings of unconsolidated joint ventures | 245,000 | $ 209,000 | |
MCB Real Estate LLC And Its Affiliates | |||
Investment in Unconsolidated Joint Ventures. | |||
Investment in unconsolidated joint ventures | $ 8,307,000 |
Allowance for Doubtful Accoun40
Allowance for Doubtful Accounts (Details) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2017USD ($)property | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Allowance for Doubtful Accounts | ||||
Balance in allowance for doubtful accounts | $ 0 | $ 0 | $ 0 | |
Bad debt expense | 296,000 | $ 153,000 | ||
Hhgregg, Inc. | ||||
Allowance for Doubtful Accounts | ||||
Number of properties by tenant | property | 2 | |||
Bad debt expense | 296,000 | |||
Write off of Unbilled Rent Receivable | 263,000 | |||
Write off of tenant origination costs | 646,000 | |||
Impairment charge | 0 | |||
Net book value of property | $ 5,934,000 | 5,934,000 | ||
Sports Authority Inc. | ||||
Allowance for Doubtful Accounts | ||||
Bad debt expense | $ 153,000 | |||
Impairment charge | 0 | |||
Net book value of property | $ 2,605,000 | $ 2,605,000 | ||
Maximum | Hhgregg, Inc. | ||||
Allowance for Doubtful Accounts | ||||
Percentage of rental income | 1.50% | 1.50% | ||
Maximum | Sports Authority Inc. | ||||
Allowance for Doubtful Accounts | ||||
Percentage of rental income | 1.00% |
Debt Obligations - Mortgage Pay
Debt Obligations - Mortgage Payable current (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Mortgages Payable | ||
Mortgages payable, net | $ 392,656 | $ 394,898 |
Mortgages payable | ||
Mortgages Payable | ||
Mortgages payable, gross | 396,641 | 399,192 |
Unamortized deferred financing costs | (3,985) | (4,294) |
Mortgages payable, net | $ 392,656 | $ 394,898 |
Debt Obligations - Line of Cred
Debt Obligations - Line of Credit (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | May 01, 2017 | Dec. 31, 2016 | |
Line of Credit | ||||
Line of credit, net | $ 4,142,000 | $ 9,064,000 | ||
Facility | ||||
Line of Credit | ||||
Unused facility fee (as a percent) | 0.25% | |||
Interest rate during the period (as a percent) | 2.52% | 2.18% | ||
Line of credit, gross | $ 5,000,000 | 10,000,000 | ||
Unamortized deferred financing costs | (858,000) | (936,000) | ||
Facility | Credit Facility | ||||
Line of Credit | ||||
Line of credit, gross | 5,000,000 | $ 5,000,000 | 10,000,000 | |
Unamortized deferred financing costs | (858,000) | (936,000) | ||
Line of credit, net | 4,142,000 | $ 9,064,000 | ||
Facility | Credit Facility | Maximum | ||||
Line of Credit | ||||
Borrowing capacity | $ 100,000,000 | |||
Facility | LIBOR | Credit Facility | ||||
Line of Credit | ||||
Spread on variable interest rate (as a percent) | 1.75% | 1.75% | ||
Facility | LIBOR | Credit Facility | Maximum | ||||
Line of Credit | ||||
Spread on variable interest rate (as a percent) | 3.00% | |||
Facility | LIBOR | Credit Facility | Minimum | ||||
Line of Credit | ||||
Spread on variable interest rate (as a percent) | 1.75% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Related Party Transaction | ||
Share based compensation charged to operations | $ 742,200 | $ 665,700 |
Majestic | ||
Related Party Transaction | ||
Quarterly fees under compensation and services agreement | 665,000 | 603,000 |
Property management costs allocated to real estate expenses annually | 285,000 | 241,000 |
Additional payment for the entity's share of all direct office expenses | 54,000 | 49,000 |
Executive officers and others | ||
Related Party Transaction | ||
Share based compensation charged to operations | 381,000 | 344,000 |
Joint venture partners | ||
Related Party Transaction | ||
Real estate property management costs | 49,000 | 51,000 |
Corporate joint venture | ||
Related Party Transaction | ||
Aggregate fees paid to other partners | 46,000 | 35,000 |
Decrease in equity earnings, joint venture transaction | 23,000 | 17,500 |
Chairman | ||
Related Party Transaction | ||
Fee paid | 69,000 | 65,625 |
Vice Chairman | ||
Related Party Transaction | ||
Fee paid | 27,500 | 26,250 |
Gould Investors L.P. | ||
Related Party Transaction | ||
Real estate insurance expense | $ 173,000 | $ 101,000 |
Net lease tenants | Majestic | ||
Related Party Transaction | ||
Property management fee (as a percent) | 1.50% | |
Operating lease tenants | Majestic | ||
Related Party Transaction | ||
Property management fee (as a percent) | 2.00% |
Common Stock Cash Dividend (Det
Common Stock Cash Dividend (Details) - USD ($) | Mar. 10, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Common Stock Cash Dividend | |||
Quarterly cash dividend declared (in dollars per share) | $ 0.43 | ||
Quarterly cash dividend declared | $ 7,912,000 | $ 7,912,000 | $ 6,996,000 |
Shares Issued through Equity 45
Shares Issued through Equity Offering Program (Details) - USD ($) | Mar. 20, 2014 | Mar. 31, 2017 |
Shares Issued through Equity Offering Program | ||
Maximum aggregate sales price of shares to be sold under an Equity Offering Sales Agreement | $ 38,360,000 | |
Number of shares sold (in shares) | 27,800 | |
Proceeds from sale of shares, net of commission and before offering costs | $ 692,000 | |
Payment of commissions on sale of shares | 7,000 | |
Payment of offering costs on sale of shares. | $ 57,000 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
The total charge to operations for all incentive plans is as follows: | ||
Share based compensation charged to operations | $ 742,200 | $ 665,700 |
Compensation costs related to non-vested awards that have not yet been recognized | $ 8,499,000 | |
Restricted stock grants | ||
Summary of the activity of the incentive plans | ||
Restricted stock grants | 140,100 | 139,225 |
Per share grant price (in dollars per share) | $ 24.75 | $ 21.74 |
Deferred compensation to be recognized over vesting period | $ 3,467,000 | $ 3,027,000 |
Number of non-vested shares: | ||
Non-vested beginning of period (in shares) | 591,750 | 538,755 |
Grants (in shares) | 140,100 | 139,225 |
Vested during period (in shares) | (104,950) | (72,730) |
Forfeitures (in shares) | (500) | (250) |
Non-vested end of period (in shares) | 626,400 | 605,000 |
The following information includes the 200,000 Units: | ||
Average per share value of non-vested shares (based on grant price) (in dollars per share) | $ 19.25 | $ 18 |
Value of stock vested during the period (based on grant price) | $ 1,760,000 | $ 1,177,000 |
Average per share value of shares forfeited during the period (based on grant price) (in dollars per share) | $ 22.64 | $ 21.05 |
The total charge to operations for all incentive plans is as follows: | ||
Share based compensation charged to operations | $ 693,900 | $ 649,500 |
Approximate weighted average vesting period | 2 years 10 months 24 days | |
Restricted stock units | ||
The total charge to operations for all incentive plans is as follows: | ||
Share based compensation charged to operations | $ 48,300 | $ 16,200 |
Approximate weighted average vesting period | 3 months | |
Performance stock | ||
The total charge to operations for all incentive plans is as follows: | ||
Performance Cycle for the units | 7 years | |
2012 and 2009 Incentive Plan | ||
Summary of the activity of the incentive plans | ||
Restricted stock grants | 0 | |
Number of non-vested shares: | ||
Grants (in shares) | 0 | |
Vested during period (in shares) | 0 | |
Non-vested end of period (in shares) | 686,400 | |
Pay-for-performance program | ||
The total charge to operations for all incentive plans is as follows: | ||
Compensation costs related to non-vested awards that have not yet been recognized | $ 37,000 | |
Pay-for-performance program | Restricted stock units | ||
Number of non-vested shares: | ||
Vested during period (in shares) | 0 | |
Forfeitures (in shares) | 0 | |
Non-vested end of period (in shares) | 200,000 | |
2016 Incentive Plan | ||
Stock Based Compensation | ||
Number of shares authorized for issuance | 750,000 | |
Shares vested pursuant to plan | 0 | |
Number of non-vested shares: | ||
Non-vested end of period (in shares) | 140,000 |
Fair Value Measurements - Avail
Fair Value Measurements - Available for Sale (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Facility | ||
Fair Value of Financial Instruments | ||
Line of credit, gross | $ 5,000,000 | $ 10,000,000 |
Recurring | Level 2 | Interest rate swap | ||
Financial assets: | ||
Derivative financial instruments | 1,427,000 | 1,257,000 |
Financial liabilities: | ||
Derivative financial instruments | 2,290,000 | 2,695,000 |
Mortgages payable | ||
Fair Value of Financial Instruments | ||
Estimated fair value of mortgages payable | 410,910,000 | 413,916,000 |
Carrying value of mortgage loans | 396,641,000 | 399,192,000 |
Excess of fair value over carrying value | $ 14,269,000 | $ 14,724,000 |
Blended or estimated market interest rate (as a percent) | 3.74% | 3.74% |
Weighted average remaining term of the mortgages | 9 years | 9 years 3 months 18 days |
Fair Value Measurements - Inter
Fair Value Measurements - Interest Rate Derivatives (Details) - Interest rate derivatives - Cash flow hedges | 3 Months Ended |
Mar. 31, 2017USD ($)item | |
Fair Value Measurements | |
Number of interest rate derivatives held | 30 |
Number of mortgage loans outstanding | 30 |
Notional Amount | $ | $ 140,939,000 |
Weighted average maturity | 7 years 7 months 6 days |
Weighted average annual interest rate (as a percent) | 4.16% |
Minimum | |
Fair Value Measurements | |
Fixed Interest Rate (as a percent) | 3.02% |
Maximum | |
Fair Value Measurements | |
Fixed Interest Rate (as a percent) | 5.75% |
Fair Value Measurements - Deriv
Fair Value Measurements - Derivative Instruments, Gain (Loss) (Details) - Cash flow hedges | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017USD ($)item | Mar. 31, 2016USD ($)item | Mar. 31, 2018USD ($) | |
Reclassification of gain (loss) | |||
Gain or loss recognized with respect to cash flow hedges' ineffectiveness | $ 0 | $ 0 | |
Interest rate swap | |||
Fair Value Measurements | |||
Amount of gain (loss) recognized on derivatives in Other comprehensive loss | 69,000 | (4,502,000) | |
Amount of loss reclassification from Accumulated other comprehensive loss into Interest expense | (509,000) | $ (602,000) | |
Reclassification of gain (loss) | |||
Additional amount to be reclassified during the next twelve months | $ 1,357,000 | ||
Number of interest rate derivative instruments terminated | item | 2 | ||
Credit risk related contingent feature | |||
Fair value of derivative in a liability position, including accrued interest but excluding adjustments for nonperformance risk | 2,494,000 | ||
Accrued interest on derivative in a liability position | 94,000 | ||
Termination value of derivative agreement | 2,494,000 | ||
Adjustments for nonperformance risk | $ 110,000 | ||
Interest rate swap | Unconsolidated joint ventures | |||
Fair Value Measurements | |||
Number of unconsolidated joint ventures of the entity with interest rate derivatives outstanding | item | 3 | ||
Percentage of ownership in unconsolidated joint venture | 50.00% | ||
Number interest rate derivatives outstanding | item | 2 | ||
Notional Amount | $ 10,683,000 | ||
Amount of gain (loss) recognized on derivatives in Other comprehensive loss | 9,000 | $ (130,000) | |
Amount of loss reclassification from Accumulated other comprehensive loss into Equity in earnings of unconsolidated joint ventures | $ (19,000) | (25,000) | |
Reclassification of gain (loss) | |||
Additional amount to be reclassified during the next twelve months | $ 51,000 | ||
Interest rate swap | Unconsolidated joint ventures | Minimum | |||
Fair Value Measurements | |||
Fixed Interest Rate (as a percent) | 3.49% | ||
Interest rate swap | Unconsolidated joint ventures | Maximum | |||
Fair Value Measurements | |||
Fixed Interest Rate (as a percent) | 5.81% | ||
Interest rate swap | Prepayment costs on debt | |||
Reclassification of gain (loss) | |||
Loss on termination of interest rate swap | $ 0 | $ 24,000 | |
Interest rate swap | Accrued Expenses And Other Liabilities [Member] | |||
Credit risk related contingent feature | |||
Termination value of derivative agreement | $ 2,384,000 |
Commitments (Details)
Commitments (Details) | Mar. 31, 2017USD ($) |
Building located In Hauppauge, New York | |
Contractual obligation | $ 7,800,000 |
Regal Cinemas In Greensboro, North Carolina | |
Contractual obligation | $ 3,000,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Property located in Greenwood, Colorado - USD ($) | 3 Months Ended | ||
Jun. 30, 2017 | May 08, 2017 | Mar. 31, 2017 | |
Real estate investments, net | |||
Subsequent Events | |||
Net book value of property held for sale after balance sheet date | $ 2,600,000 | ||
Subsequent event | |||
Subsequent Events | |||
Consideration for sale of property, net of closing costs | $ 9,100,000 | ||
Subsequent event | Forecast | |||
Subsequent Events | |||
Gain on sale of property | $ 6,500,000 |