Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 01, 2018 | |
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 | Jun. 30, 2018 | |
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 | 19,288,127 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 | |
Real estate investments, at cost | |||
Land | $ 209,101,000 | $ 209,320,000 | |
Buildings and improvements | 583,991,000 | 566,007,000 | |
Total real estate investments, at cost | 793,092,000 | 775,327,000 | |
Less accumulated depreciation | 116,451,000 | 108,953,000 | |
Real estate investments, net | 676,641,000 | 666,374,000 | |
Investment in unconsolidated joint ventures | 11,214,000 | 10,723,000 | |
Cash and cash equivalents | 12,925,000 | 13,766,000 | |
Restricted cash | 416,000 | 443,000 | |
Unbilled rent receivable | 14,617,000 | 14,125,000 | |
Unamortized intangible lease assets, net | 27,931,000 | 30,525,000 | |
Escrow, deposits and other assets and receivables | 8,158,000 | 6,630,000 | |
Total assets | [1] | 751,902,000 | 742,586,000 |
Liabilities: | |||
Mortgages payable, net of $3,758 and $3,789 of deferred financing costs, respectively | 391,599,000 | 393,157,000 | |
Line of credit, net of $468 and $624 of deferred financing costs, respectively | 19,832,000 | 8,776,000 | |
Dividends payable | 8,652,000 | 8,493,000 | |
Accrued expenses and other liabilities | 13,504,000 | 16,107,000 | |
Unamortized intangible lease liabilities, net | 16,617,000 | 17,551,000 | |
Total liabilities | [1] | 450,204,000 | 444,084,000 |
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; 18,575 and 18,261 shares issued and outstanding | 18,575,000 | 18,261,000 | |
Paid-in capital | 281,396,000 | 275,087,000 | |
Accumulated other comprehensive income | 3,913,000 | 155,000 | |
Accumulated (distributions in excess of net income) undistributed net income | (3,608,000) | 3,257,000 | |
Total One Liberty Properties, Inc. stockholders' equity | 300,276,000 | 296,760,000 | |
Non-controlling interests in consolidated joint ventures | [1] | 1,422,000 | 1,742,000 |
Total equity | 301,698,000 | 298,502,000 | |
Total liabilities and equity | $ 751,902,000 | $ 742,586,000 | |
[1] | The Company’s consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”). See Note 6. The consolidated balance sheets include the following amounts related to the Company’s consolidated VIEs: $14,722 and $17,844 of land, $28,145 and $31,789 of building and improvements, net of $3,615 and $3,811 of accumulated depreciation, $3,667 and $4,345 of other assets included in other line items, $27,411 and $32,252 of real estate debt, net, $2,386 and $2,885 of other liabilities included in other line items and $1,422 and $1,742 of non-controlling interests as of June 30, 2018 and December 31, 2017, respectively |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
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 | 18,575 | 18,261 | |
Common stock, shares outstanding | 18,575 | 18,261 | |
Land | $ 209,101 | $ 209,320 | |
Buildings and improvements | 583,991 | 566,007 | |
Accumulated depreciation | 116,451 | 108,953 | |
Non-controlling interests in consolidated joint ventures | [1] | 1,422 | 1,742 |
Consolidated VIE entities | |||
Deferred financing costs | 423 | 442 | |
Land | 14,722 | 17,844 | |
Buildings and improvements | 28,145 | 31,789 | |
Accumulated depreciation | 3,615 | 3,811 | |
Other assets | 3,667 | 4,345 | |
Real estate debt, net | 27,411 | 32,252 | |
Other liabilities | 2,386 | 2,885 | |
Non-controlling interests in consolidated joint ventures | 1,422 | 1,742 | |
Facility | |||
Deferred financing costs | 468 | 624 | |
Mortgages payable | |||
Deferred financing costs | $ 3,758 | $ 3,789 | |
[1] | The Company’s consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”). See Note 6. The consolidated balance sheets include the following amounts related to the Company’s consolidated VIEs: $14,722 and $17,844 of land, $28,145 and $31,789 of building and improvements, net of $3,615 and $3,811 of accumulated depreciation, $3,667 and $4,345 of other assets included in other line items, $27,411 and $32,252 of real estate debt, net, $2,386 and $2,885 of other liabilities included in other line items and $1,422 and $1,742 of non-controlling interests as of June 30, 2018 and December 31, 2017, respectively |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Total revenues | $ 19,752,000 | $ 18,413,000 | $ 39,286,000 | $ 36,885,000 |
Operating expenses: | ||||
Depreciation and amortization | 5,250,000 | 5,190,000 | 10,432,000 | 10,743,000 |
General and administrative (see Note 10 for related party information) | 2,969,000 | 2,893,000 | 5,928,000 | 5,708,000 |
Real estate expenses (see Note 10 for related party information) | 2,515,000 | 2,371,000 | 5,182,000 | 5,075,000 |
Federal excise and state taxes | 154,000 | 224,000 | 227,000 | 312,000 |
Leasehold rent | 77,000 | 77,000 | 154,000 | 154,000 |
Total operating expenses | 10,965,000 | 10,755,000 | 21,923,000 | 21,992,000 |
Operating income | 8,787,000 | 7,658,000 | 17,363,000 | 14,893,000 |
Other income and expenses: | ||||
Equity in earnings of unconsolidated joint ventures | 348,000 | 206,000 | 543,000 | 451,000 |
Equity in earnings from sale of unconsolidated joint venture property | 71,000 | 71,000 | ||
Other income | 6,000 | 320,000 | 10,000 | 342,000 |
Interest: | ||||
Expense | (4,445,000) | (4,532,000) | (8,747,000) | (8,921,000) |
Amortization and write-off of deferred financing costs | (221,000) | (227,000) | (449,000) | (454,000) |
Income before gain on sale of real estate, net | 4,546,000 | 3,425,000 | 8,791,000 | 6,311,000 |
Gain on sale of real estate, net | 6,568,000 | 2,408,000 | 6,568,000 | |
Net income | 4,546,000 | 9,993,000 | 11,199,000 | 12,879,000 |
Net income attributable to non-controlling interests | (29,000) | (21,000) | (831,000) | (42,000) |
Net income attributable to One Liberty Properties, Inc. | $ 4,517,000 | $ 9,972,000 | $ 10,368,000 | $ 12,837,000 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 18,519 | 17,824 | 18,458 | 17,788 |
Diluted (in shares) | 18,593 | 17,938 | 18,532 | 17,902 |
Basic (in dollars per share) | $ 0.23 | $ 0.54 | $ 0.53 | $ 0.69 |
Diluted (in dollars per share) | 0.23 | 0.54 | 0.53 | 0.69 |
Cash distributions declared per share of common stock | $ 0.45 | $ 0.43 | $ 0.90 | $ 0.86 |
Rental income, net | ||||
Revenues: | ||||
Revenue | $ 17,718,000 | $ 16,720,000 | $ 35,308,000 | $ 33,553,000 |
Tenant reimbursement | ||||
Revenues: | ||||
Revenue | $ 2,034,000 | $ 1,693,000 | $ 3,978,000 | $ 3,332,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 4,546 | $ 9,993 | $ 11,199 | $ 12,879 |
Other comprehensive gain (loss) | ||||
Net unrealized gain (loss) on derivative instruments | 1,104 | (510) | 3,800 | 68 |
Reclassification of One Liberty Properties Inc.'s share of joint venture net realized gain on derivative instrument | (110) | (110) | ||
One Liberty Properties Inc.'s share of joint venture net unrealized gain (loss) on derivative instruments | 22 | (5) | 76 | 23 |
Other comprehensive gain (loss) | 1,016 | (515) | 3,766 | 91 |
Comprehensive income | 5,562 | 9,478 | 14,965 | 12,970 |
Net income attributable to non-controlling interests | (29) | (21) | (831) | (42) |
Adjustment for derivative instruments attributable to non-controlling interests | (2) | 2 | (8) | (1) |
Comprehensive income attributable to One Liberty Properties, Inc. | $ 5,531 | $ 9,459 | $ 14,126 | $ 12,927 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Common Stock | Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Undistributed Net Income (Loss) | Accumulated distributions in excess of net income | Non-Controlling Interests in Consolidated Joint Ventures | Total |
Balances at Dec. 31, 2016 | $ 17,600 | $ 262,511 | $ (1,479) | $ 11,501 | $ 1,794 | $ 291,927 | |
Distributions - common stock | |||||||
Cash - $ 0.86 per share,$0.90 per share for the year ended June 30, 2017, 2018 respectively | $ (15,846) | (15,846) | |||||
Shares issued through equity offering program - net | 32 | 617 | 649 | ||||
Restricted stock vesting | 118 | (118) | |||||
Shares issued through dividend reinvestment plan | 93 | 2,052 | 2,145 | ||||
Distributions to non-controlling interests | (127) | (127) | |||||
Compensation expense - restricted stock | 1,657 | 1,657 | |||||
Net income | 12,837 | 42 | 12,879 | ||||
Other comprehensive income | 90 | 1 | 91 | ||||
Balances at Jun. 30, 2017 | 17,843 | 266,719 | (1,389) | 8,492 | 1,710 | 293,375 | |
Balances at Dec. 31, 2017 | 18,261 | 275,087 | 155 | 3,257 | 1,742 | 298,502 | |
Distributions - common stock | |||||||
Cash - $ 0.86 per share,$0.90 per share for the year ended June 30, 2017, 2018 respectively | (17,233) | (17,233) | |||||
Shares issued through equity offering program - net | 93 | 2,165 | 2,258 | ||||
Restricted stock vesting | 106 | (106) | |||||
Shares issued through dividend reinvestment plan | 115 | 2,568 | 2,683 | ||||
Distributions to non-controlling interests | (1,159) | (1,159) | |||||
Compensation expense - restricted stock | 1,682 | 1,682 | |||||
Net income | $ 10,368 | 831 | 11,199 | ||||
Other comprehensive income | 3,758 | 8 | 3,766 | ||||
Balances at Jun. 30, 2018 | $ 18,575 | $ 281,396 | $ 3,913 | $ (3,608) | $ 1,422 | $ 301,698 |
CONSOLIDATED STATEMENTS OF CHA7
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY | ||||
Distributions - common stock, Cash per share (in dollars per share) | $ 0.45 | $ 0.43 | $ 0.90 | $ 0.86 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 11,199,000 | $ 12,879,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Gain on sale of real estate, net | (2,408,000) | (6,568,000) |
Loss on derivative instrument reclassified into interest expense | 118,000 | |
Increase in unbilled rent receivable | (537,000) | (344,000) |
Write-off of unbilled rent receivable | 362,000 | |
Bad debt expense | 0 | 310,000 |
Amortization and write-off of intangibles relating to leases, net | (488,000) | (422,000) |
Amortization of restricted stock expense | 1,682,000 | 1,657,000 |
Equity in earnings of unconsolidated joint ventures | (543,000) | (451,000) |
Equity in earnings from sale of unconsolidated joint venture property | (71,000) | |
Distributions of earnings from unconsolidated joint ventures | 88,000 | 396,000 |
Depreciation and amortization | 10,432,000 | 10,743,000 |
Amortization and write-off of deferred financing costs | 449,000 | 454,000 |
Payment of leasing commissions | (95,000) | (36,000) |
Decrease in escrow, deposits, other assets and receivables | 718,000 | 607,000 |
(Decrease) increase in accrued expenses and other liabilities | (1,627,000) | 554,000 |
Net cash provided by operating activities | 18,799,000 | 20,259,000 |
Cash flows from investing activities: | ||
Purchase of real estate | (18,452,000) | (35,432,000) |
Improvements to real estate | (5,991,000) | (643,000) |
Net proceeds from sale of real estate | 8,958,000 | 9,173,000 |
Distributions of capital from unconsolidated joint ventures | 141,000 | |
Net cash used in investing activities | (15,485,000) | (26,761,000) |
Cash flows from financing activities: | ||
Scheduled amortization payments of mortgages payable | (5,313,000) | (5,162,000) |
Repayment of mortgages payable | (9,827,000) | |
Proceeds from mortgage financings | 13,550,000 | 5,190,000 |
Proceeds from sale of common stock, net | 2,258,000 | 649,000 |
Proceeds from bank line of credit | 25,000,000 | 26,500,000 |
Repayment on bank line of credit | (14,100,000) | (10,000,000) |
Issuance of shares through dividend reinvestment plan | 2,683,000 | 2,145,000 |
(Payment) refund of financing costs | (262,000) | 27,000 |
Distributions to non-controlling interests | (1,159,000) | (127,000) |
Cash distributions to common stockholders | (17,074,000) | (15,718,000) |
Net cash (used in) provided by financing activities | (4,244,000) | 3,504,000 |
Net decrease in cash, cash equivalents and restricted cash | (930,000) | (2,998,000) |
Cash, cash equivalents and restricted cash at beginning of year | 14,668,000 | 18,450,000 |
Cash, cash equivalents and restricted cash at end of period | 13,738,000 | 15,452,000 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for interest expense | $ 8,721,000 | 8,719,000 |
Supplemental schedule of non-cash investing and financing activities: | ||
Purchase accounting allocation - intangible lease assets | 4,008,000 | |
Purchase accounting allocation - intangible lease liabilities | $ (158,000) |
Organization and Background
Organization and Background | 6 Months Ended |
Jun. 30, 2018 | |
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 industrial, retail (including furniture stores and supermarkets), restaurant, health and fitness, and theater properties, many of which are subject to long-term net leases. As of June 30, 2018, OLP owns 120 properties, including five properties owned by consolidated joint ventures and five properties owned by unconsolidated joint ventures. The 120 properties are located in 30 states. |
Summary Accounting Policies
Summary Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
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 and six months ended June 30, 2018 and 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, 2017. 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. 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. 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. Additionally, the Company assesses the accounting treatment for any interests pursuant to which the Company may have a variable interest as a lessor. Leases may contain certain protective rights, such as the right of sale and the receipt of certain escrow deposits. 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 and six months ended June 30, 2018 and 2017, there were no impairment charges 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. 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 restricted cash on the consolidated statement of cash flows for the six months ended June 30, 2017. The change was made because, as of January 1, 2018, the Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires amounts generally described as restricted cash to 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 adoption of this ASU has no impact on the Company’s previously reported consolidated balance sheets, consolidated statements of income, net income or accumulated undistributed net income for the periods presented. As a result of the adoption of this guidance, the following table depicts the adjustments to the Company’s previously reported consolidated statement of cash flows (amounts in thousands): Six Months Ended As Reported As Adjusted Decrease in escrow, deposits, and other assets and receivables $ $ Increase in accrued expenses and other liabilities Net decrease in cash, cash equivalents and restricted cash ) ) Cash, cash equivalents and restricted cash at beginning of year Cash, cash equivalents and restricted cash at end of period The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (amounts in thousands): June 30, 2018 2017 Cash and cash equivalents $ $ Restricted cash Restricted cash included in escrow, deposits and other assets and receivables Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows $ $ Amounts included in restricted cash represent the cash reserve balance received from an owner/operator at one of the Company’s ground leases to cover certain unit renovation work (see Note 6). Restricted cash included in escrow, deposits and other assets and receivables represent amounts related to real estate tax and other reserve escrows required to be held by lenders in accordance with the Company’s mortgage agreements. The restriction on these escrow reserves will lapse when the related mortgage is repaid. |
Earnings Per Common Share
Earnings Per Common Share | 6 Months Ended |
Jun. 30, 2018 | |
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 unvested restricted stock is entitled to receive dividends and is therefore considered a participating security. As of June 30, 2018, the shares of common stock underlying the restricted stock units awarded under the 2016 Incentive Plan are excluded from the basic earnings per share calculation, as these units are not participating securities. The restricted stock units issued pursuant to the 2009 and 2016 Incentive Plans are referred to as “RSUs”. 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. The following table identifies the impact to the diluted weighted average number of shares of common stock related to the RSUs under the plans identified in the table below: Number of Three Months Ended Six Months Ended shares 2018 2017 2018 2017 2009 Incentive Plan — (a) — (a) 2016 Incentive Plan (b) (c) — (c) — (a) RSUs with respect to 113,584 shares vested in June 2017 and such shares were issued in August 2017. (b) Awarded on September 26, 2017. (c) Includes 36,120 shares that would be issued pursuant to a return on capital performance metric and 38,125 shares that would be issued pursuant to a stockholder return metric, assuming the end of the quarterly period was the June 30, 2020 vesting date. Excludes 2,005 shares subject to the capital performance metric as such metric was not met. See Note 13 for information regarding the Company’s equity incentive plans. 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 Six Months Ended 2018 2017 2018 2017 Numerator for basic and diluted earnings per share: Net income $ $ $ $ Less net income 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 number of common shares Effect of dilutive securities: RSUs Denominator for diluted earnings per share: Weighted average number of shares Earnings per common share, basic $ .23 $ .54 $ .53 $ .69 Earnings per common share, diluted $ .23 $ .54 $ .53 $ .69 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. |
Real Estate Acquisitions
Real Estate Acquisitions | 6 Months Ended |
Jun. 30, 2018 | |
Real Estate Acquisitions | |
Real Estate Acquisitions | Note 4 — Real Estate Acquisitions The following chart details the Company’s acquisitions of real estate during the six months ended June 30, 2018 (amounts in thousands): Description of Property Date Acquired Contract Terms of Capitalized Campania International/U.S. Tape industrial facility, Pennsburg, PA March 28, 2018 $ All cash $ Plymouth Industries, industrial facility, Plymouth, MN June 7, 2018 All cash Totals $ $ The Company determined that with respect to each of these acquisitions, the gross assets acquired are concentrated in a single identifiable asset. Therefore, these transactions do not meet the definition of a business and are accounted for as asset acquisitions. As such, direct transaction costs associated with these asset acquisitions have been capitalized to real estate assets and depreciated over their respective useful lives. The following chart details the allocation of the purchase price for the Company’s acquisitions of real estate during the six months ended June 30, 2018 (amounts in thousands): Building Description of Property Land Building Improvements Total Campania International/U.S. Tape industrial facility, Pennsburg, PA $ $ $ $ Plymouth Industries, industrial facility, Plymouth, MN Totals $ $ $ $ |
Sale of Property
Sale of Property | 6 Months Ended |
Jun. 30, 2018 | |
Sale of Property | |
Sale of Property | Note 5 — Sale of Property On January 1, 2018, the Company adopted 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 , using the modified retrospective transition method . As leasing is the Company’s primary activity, the Company determined that its sales of real estate, which are nonfinancial assets, are sold to noncustomers and fall within the scope of ASC 610-20. The Company re-assessed and determined there were no open contracts or partial sales and as such, the adoption of this ASU did not (i) result in a cumulative adjustment as of January 1, 2018, and (ii) have any impact on the Company’s consolidated financial statements. On January 30, 2018, the Company sold a property located in Fort Bend, Texas, owned by a consolidated joint venture in which the Company held an 85% interest, for $8,958,000, net of closing costs, and paid off the $4,410,000 mortgage. This property accounted for 1.1% of the Company’s rental income, net, during each of the three and six months ended June 30, 2017. The sale resulted in a gain of $2,408,000 which was recorded as Gain on sale of real estate, net, in the consolidated statement of income for the six months ended June 30, 2018. The non-controlling interest’s share of the gain was $776,000. The Company determined it would recognize the full gain on the sale of the Fort Bend, Texas property in accordance with ASC 610-20 as the Company has no (i) controlling financial interest in the property and (ii) continuing interest or obligation with respect to the property sold. |
Variable Interest Entities, Con
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures | 6 Months Ended |
Jun. 30, 2018 | |
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures | |
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures | Note 6 — 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 $941,000 and $1,947,000 for the three and six months ended June 30, 2018, respectively, and $917,000 and $1,804,000 for the three and six months ended June 30, 2017, respectively. The following chart details the VIEs through the Company’s ground leases and the aggregate carrying amount and maximum exposure to loss as of June 30, 2018 (dollars in thousands): Description of Property(a) Date Acquired Land # Units in Owner/ Type of Carrying The Meadows Apartments, March 24, 2015 $ $ (c) Land $ The Briarbrook Village Apartments, August 2, 2016 Land The Vue Apartments, 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 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. No other financial support has been provided by the Company to the owner/operator. (c) In November 2017, the owner/operator closed on a $7,556 supplemental mortgage (the original mortgage was for $43,824). In connection therewith, the Company agreed to subordinate its fee interest to this second mortgage in exchange for a payment by the owner/operator to the Company of $5,906 as a fixed rent payment which was recorded as deferred income and will be included in rental income over the term of the lease. The fixed rent payment balance was $5,762 and $5,870 at June 30, 2018 and December 31, 2017, respectively, and is included in Accrued expenses and other liabilities on the consolidated balance sheets. 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 $416,000 and $443,000 at June 30, 2018 and December 31, 2017, respectively, and is classified as Restricted cash on the consolidated balance sheets. Variable Interest Entity — Consolidated Joint Ventures With respect to the five consolidated joint ventures in which the Company holds between a 90% 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 consolidated 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): June 30, December 31, Land $ Buildings and improvements, net of accumulated depreciation of $3,615 and $3,811, respectively Cash Unbilled rent receivable Unamortized intangible lease assets, net Escrow, deposits and other assets and receivables Mortgages payable, net of unamortized deferred financing costs of $423 and $442, respectively Accrued expenses and other liabilities Unamortized intangible lease liabilities, net Accumulated other comprehensive income (loss) ) Non-controlling interests in consolidated joint ventures (a) Includes a consolidated joint venture, in which the Company held an 85% interest, located in Fort Bend, Texas which was sold in January 2018 (see Note 5). At June 30, 2018 and December 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 $9,734,000 and $9,705,000, respectively. 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 | 6 Months Ended |
Jun. 30, 2018 | |
Investment in Unconsolidated Joint Ventures | |
Investment in Unconsolidated Joint Ventures | Note 7 — Investment in Unconsolidated Joint Ventures On April 5, 2018, an unconsolidated joint venture sold its building and a portion of its land, located in Savannah, Georgia for $2,600,000, net of closing costs. The Company’s 50% share of the gain from this sale was $71,000, which is included in Equity in earnings from sale of unconsolidated joint venture property on the consolidated statements of income for the three and six months ended June 30, 2018. The unconsolidated joint venture retained approximately five acres of land at this property. At June 30, 2018 and December 31, 2017, 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 $11,214,000 and $10,723,000, respectively. In addition to the equity in earnings from the sale of property of $71,000 in 2018, the Company recorded equity in earnings of $348,000 and $543,000 for the three and six months ended June 30, 2018, respectively, and $206,000 and $451,000 for the three and six months ended June 30, 2017, respectively. Included in equity in earnings from unconsolidated joint ventures for the three and six months ended June 30, 2018 is $110,000 related to the discontinuance of hedge accounting on a mortgage swap related to an unconsolidated joint venture property, located in Milwaukee, Wisconsin, that was sold in July 2018 (see below and Note 14). At June 30, 2018, MCB is the Company’s joint venture partner in one of these unconsolidated joint ventures in which the Company has an equity investment of $8,408,000. On July 31, 2018, an unconsolidated joint venture sold its property located in Milwaukee, Wisconsin for approximately $12,800,000, net of closing costs and paid off the related $6,970,000 mortgage. The Company anticipates its 50% share of the gain from this sale will be approximately $2,000,000, which will be recognized in the three months ending September 30, 2018. |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 6 Months Ended |
Jun. 30, 2018 | |
Allowance for Doubtful Accounts | |
Allowance for Doubtful Accounts | Note 8 — 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 and other payments. If the financial condition of a specific tenant were to deteriorate, adversely impacting its ability to make payments, allowances may be required. At June 30, 2018 and December 31, 2017, 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. There was no bad debt expense in the three and six months ended June 30, 2018. During the three and six months ended June 30, 2017, the Company recorded bad debt expense of $15,000 and $310,000, respectively, related to tenant reimbursements due from former tenants that filed for Chapter 11 bankruptcy protection. In connection with these tenants, the Company wrote-off (i) $362,000 of unbilled straight-line rent receivable and $67,000 of unamortized intangible lease assets as a reduction to rental income and (ii) $884,000 of tenant origination costs as an increase to depreciation expense. |
Debt Obligations
Debt Obligations | 6 Months Ended |
Jun. 30, 2018 | |
Debt Obligations | |
Debt Obligations | Note 9 — Debt Obligations Mortgages Payable The following table details the Mortgages payable, net, balances per the consolidated balance sheets (amounts in thousands): June 30, 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 June 30, 2018 and 2017, 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 3.54% and 2.67% for the six months ended June 30, 2018 and 2017, respectively. The Company was in compliance with all covenants at June 30, 2018. The following table details the Line of credit, net, balances per the consolidated balance sheets (amounts in thousands): June 30, December 31, Line of credit, gross $ $ Unamortized deferred financing costs ) ) Line of credit, net $ $ At August 2, 2018, there was an outstanding balance of $3,300,000 (before unamortized deferred financing costs) under the facility. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions | |
Related Party Transactions | Note 10 — 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 to the Company 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 with 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 Majestic and the Compensation and/or Audit Committees of the Company’s Board of Directors, and is approved by such committees and the independent directors. In consideration for the services described above, the Company paid Majestic $689,000 and $1,367,000 for the three and six months ended June 30, 2018 respectively, and $664,000 and $1,329,000 for the three and six months ended June 30, 2017, respectively. Included in these fees are $309,000 and $608,000 of property management costs for the three and six months ended June 30, 2018, respectively, and $284,000 and $570,000 for the three and six months ended June 30, 2017, 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 $108,000 in each of the three and six months ended June 30, 2018 and 2017, 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 to the Company under the compensation and services agreement were awarded shares of restricted stock and RSUs under the Company’s stock incentive plans (described in Note 13). The related expense charged to the Company’s operations was $432,000 and $849,000 for the three and six months ended June 30, 2018, respectively, and $386,000 and $768,000 for the three and six months ended June 30, 2017, 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 and six months ended June 30, 2018 and 2017. Joint Venture Partners and Affiliates The Company paid an aggregate of $22,000 and $65,000 for the three and six months ended June 30, 2018, respectively, and $33,000 and $82,000 for the three and six months ended June 30, 2017, respectively, to its consolidated joint venture partners or their affiliates (none of whom are officers, directors or employees of the Company) for property management fees, which are included in Real estate expenses on the consolidated statements of income. The Company’s unconsolidated joint ventures paid management fees of $45,000 and $96,000 for the three and six months ended June 30, 2018, respectively, and $42,000 and $87,000 for the three and six months ended June 30, 2017, respectively, to the other partner of the venture, which reduced Equity in earnings of $23,000 and $48,000 for the three and six months ended June 30, 2018, respectively, and $21,000 and $44,000 for the three and six months ended June 30, 2017, respectively. Other During 2018 and 2017, the Company paid quarterly fees of $69,000 to the Company’s chairman and $27,500 to the Company’s vice-chairman. 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 $206,000 and $404,000 for the three and six months ended June 30, 2018, respectively, and $174,000 and $347,000 for the three and six months ended June 30, 2017, respectively of amounts reimbursed to Gould Investors in prior periods. |
Common Stock Cash Dividend
Common Stock Cash Dividend | 6 Months Ended |
Jun. 30, 2018 | |
Common Stock Cash Dividend | |
Common Stock Cash Dividend | Note 11 — Common Stock Cash Dividend On June 13, 2018, the Board of Directors declared a quarterly cash dividend of $.45 per share on the Company’s common stock, totaling $8,652,000. The quarterly dividend was paid on July 6, 2018 to stockholders of record on June 25, 2018. |
Shares Issued through Equity Of
Shares Issued through Equity Offering Program | 6 Months Ended |
Jun. 30, 2018 | |
Shares Issued through Equity Offering Program | |
Shares Issued through Equity Offering Program | Note 12 — Shares Issued through Equity Offering Program During the six months ended June 30, 2018, the Company sold 93,417 shares for proceeds of $2,303,000, net of commissions of $23,000, and incurred offering costs of $45,000 for professional fees. |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Stock Based Compensation | |
Stock Based Compensation | Note 13 — 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, RSUs, 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. As of June 30, 2018, (i) restricted stock awards with respect to 284,850 shares had been issued, of which 200 shares were forfeited and 3,000 shares had vested, and (ii) as further described below, RSUs with respect to 76,250 shares had been issued and are outstanding. Under the Company’s 2012 Incentive Plan, as of June 30, 2018, 500,700 shares had been issued, of which 3,400 shares were forfeited and 127,450 shares had vested. No additional awards may be granted under this plan. 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. Unless earlier forfeited because the participant’s relationship with the Company terminated, unvested restricted stock awards vest on the fifth anniversary of the grant date, and under certain circumstances may vest earlier. In each of 2017 and July 2018, the Company granted RSUs exchangeable for up to 76,250 shares of common stock upon satisfaction, through June 30, 2020 and June 30, 2021, respectively, of specified conditions. Specifically, up to 50% of these RSUs vest upon achievement of metrics related to average annual total stockholder return (the “TSR Awards”), which metrics meet the definition of a market condition, and up to 50% vest upon achievement of metrics related to average annual return on capital (the “ROC Awards”), which metrics meet the definition of a performance condition. The holders of the RSUs are not entitled to dividends or to vote the underlying shares until such RSUs vest and shares are issued. Accordingly, the shares underlying these RSUs are not included in the shares shown as outstanding on the balance sheet. For the ROC Awards, the performance assumptions are re-evaluated quarterly. Expense is not recognized on the RSUs which the Company does not expect to vest as a result of service conditions or the Company’s performance expectations. Based on performance and market assumptions, the total amount recorded as deferred compensation for the 2017 grant of RSUs is $1,005,000, and such sum will be charged to General and administrative expense over the three year performance cycle. None of these RSUs were forfeited or vested during the six months ended June 30, 2018. In 2010, RSUs exchangeable for up to 200,000 shares of common stock were awarded pursuant to the Company’s 2009 Incentive Plan. The holders of RSUs were not entitled to dividends or to vote the underlying shares until the RSUs vested and the underlying shares were issued. During 2017, 113,584 shares of common stock underlying the RSUs were deemed to have vested and were issued. RSUs with respect to the balance of 86,416 shares were forfeited. The following is a summary of the activity of the equity incentive plans: Three Months Ended Six Months Ended 2018 2017 2018 2017 Restricted stock: Number of shares — — Average 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 RSU grants: Number of underlying shares — — — — Average 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 — — Restricted stock and RSU grants: Weighted average per share value of non-vested shares (based on grant price) $ $ $ $ Value of stock vested during the period (based on grant price) $ — $ $ $ Weighted average per share value of shares forfeited during the period (based on grant price) $ $ $ $ The total charge to operations: Outstanding restricted stock grants $ $ $ $ Outstanding RSUs Total charge to operations $ $ $ $ As of June 30, 2018, total compensation costs of $8,349,000 and $728,000 to non-vested restricted stock awards and RSUs, respectively, have not yet been recognized. These compensation costs will be charged to General and administrative expense over the remaining respective vesting periods. The weighted average vesting period is 2.7 years for the restricted stock and 2.0 years for the RSUs. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | Note 14 — 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 June 30, 2018, the $389,903,000 estimated fair value of the Company’s mortgages payable is less than their $395,357,000 carrying value (before unamortized deferred financing costs) by approximately $5,454,000 assuming a blended market interest rate of 4.50% based on the 8.5 year weighted average remaining term to maturity of the mortgages. At December 31, 2017, the $397,103,000 estimated fair value of the Company’s mortgages payable is greater than their $396,946,000 carrying value (before unamortized deferred financing costs) by approximately $157,000 assuming a blended market interest rate of 4.25% based on the 8.7 year weighted average remaining term to maturity of the mortgages. At June 30, 2018 and December 31, 2017, the carrying amount of the Company’s line of credit (before unamortized deferred financing costs) of $20,300,000 and $9,400,000, 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 Fair Value Financial assets: Interest rate swaps June 30, 2018 $ December 31, 2017 Financial liabilities: Interest rate swaps June 30, 2018 $ December 31, 2017 The Company does not own any financial instruments that are measured on a recurring basis and 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 June 30, 2018, 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 June 30, 2018, the Company had entered into 28 interest rate derivatives, all of which were interest rate swaps, related to 28 outstanding mortgage loans with an aggregate $131,103,000 notional amount and mature between 2019 and 2028 (weighted average remaining term to maturity of 6.6 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 5.38% and a weighted average interest 4.13% at June 30, 2018). The fair values of the Company’s derivatives in asset and liability positions are reflected as other assets or other liabilities on the consolidated balance sheets. One of the Company’s unconsolidated joint ventures, in which a wholly-owned subsidiary of the Company is a 50% partner, had an interest rate derivative outstanding at June 30, 2018 which was designated as a cash flow hedge. This interest rate swap with a $6,983,000 notional amount has an interest rate of 3.49% and matures in 2022 . See discussion below for the discontinuation of hedge accounting on this interest rate swap during the three months ended June 30, 2018. In connection with the sale of an unconsolidated joint venture property in Savannah, Georgia, the Company terminated an interest rate swap with a $3,402,000 notional amount and a 5.81% interest rate when the related mortgage was paid off at its maturity in April 2018 (see Note 7). 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 Six Months Ended 2018 2017 2018 2017 One Liberty Properties, Inc. and Consolidated subsidiaries Amount of gain (loss) recognized on derivatives in Other comprehensive income $ $ ) $ $ ) Amount of reclassification from Accumulated other comprehensive income into Interest expense ) ) ) ) Unconsolidated Joint Ventures (Company’s share) Amount of gain (loss) recognized on derivatives in Other comprehensive income $ $ ) $ $ ) Amount of reclassification from Accumulated other comprehensive income into Equity in earnings of unconsolidated joint ventures ) ) During the three months ended June 30, 2018 and 2017, the Company (including one of its unconsolidated joint ventures) discontinued hedge accounting on two interest rate swaps as the forecasted hedged transactions were no longer probable of occurring. As a result, during the three months ended June 30, 2018 and 2017, the Company reclassified $110,000 and $118,000 of realized gain and loss, respectively, from Accumulated other comprehensive income to earnings. No gain or loss was recognized with respect to amounts excluded from effectiveness testing on the Company’s cash flow hedges for the three and six months ended June 30, 2018 and 2017. During the twelve months ending June 30, 2019, the Company estimates an additional $222,000 will be reclassified from other Accumulated other comprehensive income as a decrease to Interest expense. The derivative agreements in effect at June 30, 2018 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. As of June 30, 2018 and December 31, 2017, the fair value of the derivatives in a liability position, including accrued interest of $9,000 and $53,000, respectively, but excluding any adjustments for nonperformance risk, was approximately $126,000 and $1,638,000, respectively. 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 $126,000 and $1,638,000 as of June 30, 2018 and December 31, 2017, respectively. This termination liability value, net of adjustments for nonperformance risk of $8,000 and $93,000, is included in Accrued expenses and other liabilities on the consolidated balance sheet at June 30, 2018 and December 31, 2017, respectively. |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2018 | |
Commitments | |
Commitments | Note 15 — Commitments The Company is contractually required to expend approximately $7,800,000 through 2018 for building expansion and improvements at its property tenanted by L-3 Communications, located in Hauppauge, New York, of which $6,261,000 has been spent through June 30, 2018. |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
New Accounting Pronouncements | |
New Accounting Pronouncements | Note 16 — New Accounting Pronouncements In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting, which provides additional guidance related to share-based payment transactions for acquiring goods or services from nonemployees. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is evaluating this new guidance but does not expect it to have a material impact on the Company’s consolidated financial statements. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities , which amends the presentation and disclosure requirements for hedge accounting and changes how companies assess hedge effectiveness. This ASU is intended to more closely align hedge accounting with companies’ risk management strategies, simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The Company early adopted this guidance on January 1, 2018 using the modified retrospective transition method and its adoption did not have any impact on the Company’s previously reported income from operations, net income or accumulated undistributed net income for the periods presented. 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 are not 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, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted after December 2018. The Company is evaluating the new guidance to determine if, and to the extent, it will impact the 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. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases, which seeks to clarify aspects of ASU No. 2016-02 and correct unintended application of such guidance . The effective date of these standards 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 these new standards but does not expect them to have a significant effect on its consolidated financial statements. The Company anticipates adopting these standards effective as of January 1, 2019 and will apply the modified retrospective approach. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The new model requires 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. In July 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which delays the effective date of ASU No. 2014-09 by one year. In March 2016, the FASB issued ASU No. 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 No. 2014-09, ASU No. 2015-14 and ASU No. 2016-08 are herein collectively referred to as the “New Revenue Recognition Standards”. The Company adopted the New Revenue Recognition Standards on January 1, 2018 using the modified retrospective transition method. The Company’s main revenue streams are rental revenues and tenant reimbursements. Such revenues are related to lease contracts with tenants which currently fall within the scope of ASC Topic 840, and will fall within the scope of ASC Topic 842 upon the adoption of ASU No. 2016-02 on January 1, 2019 (the Company’s sales of real estate are within the scope of ASU No. 2017-05, see Note 5). Accordingly, the adoption of the New Revenue Recognition Standards did not (i) result in a cumulative adjustment as of January 1, 2018, and (ii) have any impact on the Company’s consolidated financial statements. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events | |
Subsequent Events | Note 17 — Subsequent Events Subsequent events have been evaluated and except as disclosed herein, there were no other events relative to the consolidated financial statements that require additional disclosure. |
Summary Accounting Policies (Po
Summary Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
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 and six months ended June 30, 2018 and 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, 2017. 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. 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. 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. Additionally, the Company assesses the accounting treatment for any interests pursuant to which the Company may have a variable interest as a lessor. Leases may contain certain protective rights, such as the right of sale and the receipt of certain escrow deposits. 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 and six months ended June 30, 2018 and 2017, there were no impairment charges 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. |
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 restricted cash on the consolidated statement of cash flows for the six months ended June 30, 2017. The change was made because, as of January 1, 2018, the Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires amounts generally described as restricted cash to 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 adoption of this ASU has no impact on the Company’s previously reported consolidated balance sheets, consolidated statements of income, net income or accumulated undistributed net income for the periods presented. As a result of the adoption of this guidance, the following table depicts the adjustments to the Company’s previously reported consolidated statement of cash flows (amounts in thousands): Six Months Ended As Reported As Adjusted Decrease in escrow, deposits, and other assets and receivables $ $ Increase in accrued expenses and other liabilities Net decrease in cash, cash equivalents and restricted cash ) ) Cash, cash equivalents and restricted cash at beginning of year Cash, cash equivalents and restricted cash at end of period The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (amounts in thousands): June 30, 2018 2017 Cash and cash equivalents $ $ Restricted cash Restricted cash included in escrow, deposits and other assets and receivables Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows $ $ Amounts included in restricted cash represent the cash reserve balance received from an owner/operator at one of the Company’s ground leases to cover certain unit renovation work (see Note 6). Restricted cash included in escrow, deposits and other assets and receivables represent amounts related to real estate tax and other reserve escrows required to be held by lenders in accordance with the Company’s mortgage agreements. The restriction on these escrow reserves will lapse when the related mortgage is repaid. |
Summary Accounting Policies (Ta
Summary Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Summary Accounting Policies | |
Schedule of table depicts the adjustments to the Company's previously reported consolidated statement of cash flows | As a result of the adoption of this guidance, the following table depicts the adjustments to the Company’s previously reported consolidated statement of cash flows (amounts in thousands): Six Months Ended As Reported As Adjusted Decrease in escrow, deposits, and other assets and receivables $ $ Increase in accrued expenses and other liabilities Net decrease in cash, cash equivalents and restricted cash ) ) Cash, cash equivalents and restricted cash at beginning of year Cash, cash equivalents and restricted cash at end of period |
Schedule of reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows (amounts in thousands): June 30, 2018 2017 Cash and cash equivalents $ $ Restricted cash Restricted cash included in escrow, deposits and other assets and receivables Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows $ $ |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Common Share | |
Schedule of impact to the diluted weighted average number of shares of common stock related to the RSUs | Number of Three Months Ended Six Months Ended shares 2018 2017 2018 2017 2009 Incentive Plan — (a) — (a) 2016 Incentive Plan (b) (c) — (c) — (a) RSUs with respect to 113,584 shares vested in June 2017 and such shares were issued in August 2017. (b) Awarded on September 26, 2017. (c) Includes 36,120 shares that would be issued pursuant to a return on capital performance metric and 38,125 shares that would be issued pursuant to a stockholder return metric, assuming the end of the quarterly period was the June 30, 2020 vesting date. Excludes 2,005 shares subject to the capital performance metric as such metric was not met. See Note 13 for information regarding the Company’s equity incentive plans. |
Schedule of reconciliation of the 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 Six Months Ended 2018 2017 2018 2017 Numerator for basic and diluted earnings per share: Net income $ $ $ $ Less net income 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 number of common shares Effect of dilutive securities: RSUs Denominator for diluted earnings per share: Weighted average number of shares Earnings per common share, basic $ .23 $ .54 $ .53 $ .69 Earnings per common share, diluted $ .23 $ .54 $ .53 $ .69 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. |
Real Estate Acquisitions (Table
Real Estate Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Real Estate Acquisitions | |
Schedule of the Company's acquisitions of real estate | The following chart details the Company’s acquisitions of real estate during the six months ended June 30, 2018 (amounts in thousands): Description of Property Date Acquired Contract Terms of Capitalized Campania International/U.S. Tape industrial facility, Pennsburg, PA March 28, 2018 $ All cash $ Plymouth Industries, industrial facility, Plymouth, MN June 7, 2018 All cash Totals $ $ |
Schedule of allocation of the purchase price for the company's acquisitions of real estate | The following chart details the allocation of the purchase price for the Company’s acquisitions of real estate during the six months ended June 30, 2018 (amounts in thousands): Building Description of Property Land Building Improvements Total Campania International/U.S. Tape industrial facility, Pennsburg, PA $ $ $ $ Plymouth Industries, industrial facility, Plymouth, MN Totals $ $ $ $ |
Variable Interest Entities, C30
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Unconsolidated JV | |
Schedule of Variable Interest Entities through Ground Leases and Carrying Amount and Maximum Exposure to Loss | The following chart details the VIEs through the Company’s ground leases and the aggregate carrying amount and maximum exposure to loss as of June 30, 2018 (dollars in thousands): Description of Property(a) Date Acquired Land # Units in Owner/ Type of Carrying The Meadows Apartments, March 24, 2015 $ $ (c) Land $ The Briarbrook Village Apartments, August 2, 2016 Land The Vue Apartments, 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 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. No other financial support has been provided by the Company to the owner/operator. (c) In November 2017, the owner/operator closed on a $7,556 supplemental mortgage (the original mortgage was for $43,824). In connection therewith, the Company agreed to subordinate its fee interest to this second mortgage in exchange for a payment by the owner/operator to the Company of $5,906 as a fixed rent payment which was recorded as deferred income and will be included in rental income over the term of the lease. The fixed rent payment balance was $5,762 and $5,870 at June 30, 2018 and December 31, 2017, respectively, and is included in Accrued expenses and other liabilities on the consolidated balance sheets. |
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): June 30, December 31, Land $ Buildings and improvements, net of accumulated depreciation of $3,615 and $3,811, respectively Cash Unbilled rent receivable Unamortized intangible lease assets, net Escrow, deposits and other assets and receivables Mortgages payable, net of unamortized deferred financing costs of $423 and $442, respectively Accrued expenses and other liabilities Unamortized intangible lease liabilities, net Accumulated other comprehensive income (loss) ) Non-controlling interests in consolidated joint ventures (a) Includes a consolidated joint venture, in which the Company held an 85% interest, located in Fort Bend, Texas which was sold in January 2018 (see Note 5). |
Debt Obligations (Tables)
Debt Obligations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Obligations | |
Schedule of Mortgages payable, net | The following table details the Mortgages payable, net, balances per the consolidated balance sheets (amounts in thousands): June 30, 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 (amounts in thousands): June 30, December 31, Line of credit, gross $ $ Unamortized deferred financing costs ) ) Line of credit, net $ $ |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Stock Based Compensation | |
Summary of the activity of the equity incentive plans | Three Months Ended Six Months Ended 2018 2017 2018 2017 Restricted stock: Number of shares — — Average 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 RSU grants: Number of underlying shares — — — — Average 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 — — Restricted stock and RSU grants: Weighted average per share value of non-vested shares (based on grant price) $ $ $ $ Value of stock vested during the period (based on grant price) $ — $ $ $ Weighted average per share value of shares forfeited during the period (based on grant price) $ $ $ $ The total charge to operations: Outstanding restricted stock grants $ $ $ $ Outstanding RSUs Total charge to operations $ $ $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 Fair Value Financial assets: Interest rate swaps June 30, 2018 $ December 31, 2017 Financial liabilities: Interest rate swaps June 30, 2018 $ December 31, 2017 |
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 Six Months Ended 2018 2017 2018 2017 One Liberty Properties, Inc. and Consolidated subsidiaries Amount of gain (loss) recognized on derivatives in Other comprehensive income $ $ ) $ $ ) Amount of reclassification from Accumulated other comprehensive income into Interest expense ) ) ) ) Unconsolidated Joint Ventures (Company’s share) Amount of gain (loss) recognized on derivatives in Other comprehensive income $ $ ) $ $ ) Amount of reclassification from Accumulated other comprehensive income into Equity in earnings of unconsolidated joint ventures ) ) |
Organization and Background (De
Organization and Background (Details) | Jun. 30, 2018stateproperty |
Organization and Background | |
Number of real estate properties | 120 |
Number of states in which properties are located | state | 30 |
Properties owned by consolidated joint ventures | |
Organization and Background | |
Number of real estate properties | 5 |
Properties owned by unconsolidated joint ventures | |
Organization and Background | |
Number of real estate properties | 5 |
Summary Accounting Policies - I
Summary Accounting Policies - Investment in Joint Ventures and Variable Interest Entities (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)item | Jun. 30, 2017USD ($) | |
Investment in Joint Ventures and Variable Interest Entities | ||||
Number of Unconsolidated Joint Venture VIEs | item | 0 | |||
Recourse debt of joint venture | $ 0 | $ 0 | ||
Impairment charge relating to investments in unconsolidated joint ventures | $ 0 | $ 0 | $ 0 | $ 0 |
Summary Accounting Policies - R
Summary Accounting Policies - Reclassifications (Details) - USD ($) $ in Thousands | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | |
Reclassifications | |||||
Decrease in escrow, deposits, other assets and receivables | $ 718 | $ 607 | |||
Increase in accrued expenses and other liabilities | (1,627) | 554 | |||
Net decrease in cash, cash equivalents and restricted cash | (930) | (2,998) | |||
Cash, cash equivalents and restricted cash at beginning of year | 14,668 | 18,450 | |||
Cash, cash equivalents and restricted cash at end of period | 13,738 | 15,452 | |||
Cash and cash equivalents | $ 12,925 | $ 13,766 | $ 14,384 | ||
Restricted cash | 416 | 443 | 647 | ||
Restricted cash included in escrow, deposits and other assets and receivables | 397 | 421 | |||
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows | $ 14,668 | 18,450 | $ 13,738 | $ 14,668 | 15,452 |
Accounting Standards Update 2016-18 | |||||
Reclassifications | |||||
Decrease in escrow, deposits, other assets and receivables | 572 | ||||
Increase in accrued expenses and other liabilities | 551 | ||||
Net decrease in cash, cash equivalents and restricted cash | (3,036) | ||||
Cash, cash equivalents and restricted cash at beginning of year | 17,420 | ||||
Cash, cash equivalents and restricted cash at end of period | 14,384 | ||||
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows | $ 17,420 | $ 14,384 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Numerator for basic and diluted earnings per share: | ||||||
Net income | $ 4,546 | $ 9,993 | $ 11,199 | $ 12,879 | ||
Less net income attributable to non-controlling interests | (29) | (21) | (831) | (42) | ||
Less earnings allocated to unvested restricted stock | [1] | (293) | (332) | (586) | (533) | |
Net income available for common stockholders: basic and diluted | $ 4,224 | $ 9,640 | $ 9,782 | $ 12,304 | ||
Denominator for basic earnings per share: | ||||||
Weighted average number of common shares | 18,519,000 | 17,824,000 | 18,458,000 | 17,788,000 | ||
Effect of dilutive securities: | ||||||
RSUs | 74,000 | 114,000 | 74,000 | 114,000 | ||
Denominator for diluted earnings per share: weighted average number of shares | 18,593,000 | 17,938 | 18,532,000 | 17,902,000 | ||
Earnings per common share, basic | $ 0.23 | $ 0.54 | $ 0.53 | $ 0.69 | ||
Earnings per common share, diluted | $ 0.23 | $ 0.54 | $ 0.53 | $ 0.69 | ||
Net income attributable to One Liberty Properties, Inc. common stockholders, net of non-controlling interests | $ 4,517 | $ 9,972 | $ 10,368 | $ 12,837 | ||
2009 Incentive Plan | ||||||
Number of underlying shares | 200,000 | |||||
Effect of dilutive securities: | ||||||
RSUs | 113,584 | 113,584 | 113,584 | |||
2016 Incentive Plan | ||||||
Number of underlying shares | 76,250 | |||||
Number of shares included in diluted weighted average number of shares pursuant to return on capital performance metric | 36,120 | |||||
Number of shares in diluted weighted average number of shares pursuant to stockholder return metric | 38,125 | |||||
Number of shares not included in diluted weighted average number of shares pursuant to return on capital performance metric | 2,005 | |||||
Effect of dilutive securities: | ||||||
RSUs | 74,245 | 74,245 | ||||
[1] | Represents an allocation of distributed earnings to unvested restricted stock which, as participating securities, are entitled to receive dividends |
Real Estate Acquisitions (Detai
Real Estate Acquisitions (Details) - USD ($) $ in Thousands | Jun. 07, 2018 | Mar. 28, 2018 | Jun. 30, 2018 |
Real Estate Acquisitions | |||
Contract Purchase Price | $ 18,175 | ||
Capitalized Third Party Real Estate Acquisition | 277 | ||
Allocation of purchase price for the company's real estate acquisitions | |||
Land | 2,897 | ||
Building | 14,705 | ||
Building Improvements | 850 | ||
Total | 18,452 | ||
Campania International/U.S. Tape industrial facility, Pennsburg, Pennsylvania | |||
Real Estate Acquisitions | |||
Contract Purchase Price | $ 12,675 | ||
Capitalized Third Party Real Estate Acquisition | $ 227 | ||
Allocation of purchase price for the company's real estate acquisitions | |||
Land | 1,776 | ||
Building | 10,399 | ||
Building Improvements | 727 | ||
Total | 12,902 | ||
Plymouth Industries Industrial Facility Plymouth Minnesota | |||
Real Estate Acquisitions | |||
Contract Purchase Price | $ 5,500 | ||
Capitalized Third Party Real Estate Acquisition | $ 50 | ||
Allocation of purchase price for the company's real estate acquisitions | |||
Land | 1,121 | ||
Building | 4,306 | ||
Building Improvements | 123 | ||
Total | $ 5,550 |
Sale of Property (Details)
Sale of Property (Details) - USD ($) | Jan. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Sale of Properties | ||||
Total sales price, net of closing costs | $ 8,958,000 | $ 9,173,000 | ||
Mortgage loan paid off | 9,827,000 | |||
Property located in Fort Bend, Texas | Consolidated JV | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Sale of Properties | ||||
Ownership interest in consolidated joint venture of the company (as a percent) | 85.00% | |||
Sale of Property | Property located in Fort Bend, Texas | Consolidated JV | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Sale of Properties | ||||
Sales Price | $ 8,958,000 | |||
Mortgage balance paid off | $ 4,410,000 | |||
Rental revenue percentage from property | 1.10% | 1.10% | ||
Gain on Sales of Real Estate, Net | 2,408,000 | |||
Sale of Property | Property located in Fort Bend, Texas | Consolidated JV | Non-Controlling Interests in Consolidated Joint Ventures | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Sale of Properties | ||||
Non-controlling interest's share of the gain | $ 776,000 |
Variable Interest Entities, C40
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures - Ground Leases (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Nov. 30, 2017USD ($) | Jun. 30, 2018USD ($)item | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)item | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Variable Interest Entities | ||||||
Number of VIEs through ground leases | item | 3 | 3 | ||||
Owner/operator supplemental mortgage | $ 7,556,000 | |||||
Owner/operator original mortgage | 43,824,000 | |||||
Fixed rent payment due to second mortgage | $ 5,906,000 | |||||
Cash Reserves - ground lease | $ 416,000 | $ 416,000 | $ 443,000 | |||
Accrued expenses and other liabilities | ||||||
Variable Interest Entities | ||||||
Fixed rent payment balance | 5,762,000 | 5,762,000 | $ 5,870,000 | |||
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 | $ 158,186,000 | |||||
Carrying Amount and Maximum Exposure to Loss | 34,029,000 | 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 | $ 51,331,000 | |||||
The Meadows Apartments, Lakemoor, Illinois | Land | ||||||
Variable Interest Entities | ||||||
Carrying Amount and Maximum Exposure to Loss | 9,592,000 | 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 | 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 | 13,901,000 | ||||
The Meadows Apartment Lakemoor, Illinois; Briarbrook Village Apartment, Wheaton, Illinois; and Vue Apartment, Beachwood, Ohio | ||||||
Variable Interest Entities | ||||||
Revenue from the ground lease | $ 941,000 | $ 917,000 | $ 1,947,000 | $ 1,804,000 |
Variable Interest Entities, C41
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures - Consolidated Joint Ventures (Details) - Consolidated JV | 6 Months Ended |
Jun. 30, 2018item | |
Variable Interest Entities | |
Number of joint ventures with controlling interest | 5 |
Minimum | |
Variable Interest Entities | |
Ownership interest in consolidated joint venture of the company (as a percent) | 90.00% |
Maximum | |
Variable Interest Entities | |
Ownership interest in consolidated joint venture of the company (as a percent) | 95.00% |
Variable Interest Entities, C42
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures - Summary of Consolidated VIE's (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Consolidated VIEs Carrying Amount of Assets and Liabilities | |||
Land | $ 2,897 | ||
Unbilled rent receivable | 14,617 | $ 14,125 | |
Unamortized intangible lease assets, net | 27,931 | 30,525 | |
Escrow, deposits and other assets and receivables | 8,158 | 6,630 | |
Mortgages payable | 391,599 | 393,157 | |
Accrued expenses and other liabilities | 13,504 | 16,107 | |
Unamortized intangible lease liabilities, net | 16,617 | 17,551 | |
Accumulated other comprehensive income (loss) | 3,913 | 155 | |
Non-controlling interests in consolidated joint ventures | [1] | 1,422 | 1,742 |
Consolidated VIE entities | |||
Consolidated VIEs Carrying Amount of Assets and Liabilities | |||
Land | 14,722 | 17,844 | |
Buildings and improvements, net of accumulated depreciation of $3,615 and $3,811, respectively | 28,145 | 31,789 | |
Cash | 839 | 1,145 | |
Unbilled rent receivable | 1,166 | 1,011 | |
Unamortized intangible lease assets, net | 975 | 1,241 | |
Escrow, deposits and other assets and receivables | 687 | 948 | |
Mortgages payable | 27,411 | 32,252 | |
Accrued expenses and other liabilities | 538 | 870 | |
Unamortized intangible lease liabilities, net | 1,848 | 2,015 | |
Accumulated other comprehensive income (loss) | 90 | (1) | |
Non-controlling interests in consolidated joint ventures | 1,422 | 1,742 | |
Accumulated depreciation | 3,615 | 3,811 | |
Unamortized deferred financing costs | $ 423 | $ 442 | |
[1] | The Company’s consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”). See Note 6. The consolidated balance sheets include the following amounts related to the Company’s consolidated VIEs: $14,722 and $17,844 of land, $28,145 and $31,789 of building and improvements, net of $3,615 and $3,811 of accumulated depreciation, $3,667 and $4,345 of other assets included in other line items, $27,411 and $32,252 of real estate debt, net, $2,386 and $2,885 of other liabilities included in other line items and $1,422 and $1,742 of non-controlling interests as of June 30, 2018 and December 31, 2017, respectively |
Variable Interest Entities, C43
Variable Interest Entities, Contingent Liabilities and Consolidated Joint Ventures - MCB Real Estate, LLC (Details) - Consolidated JV | 6 Months Ended | ||
Jun. 30, 2018USD ($)item | Jan. 30, 2018 | Dec. 31, 2017USD ($) | |
Consolidated VIEs Carrying Amount of Assets and Liabilities | |||
Number of joint ventures with controlling interest | 5 | ||
Property located in Fort Bend, Texas | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Consolidated VIEs Carrying Amount of Assets and Liabilities | |||
Ownership interest in consolidated joint venture of the company (as a percent) | 85.00% | ||
MCB Real Estate LLC And Its Affiliates | |||
Consolidated VIEs Carrying Amount of Assets and Liabilities | |||
Number of joint ventures with controlling interest | 4 | ||
Investment in consolidated joint ventures | $ | $ 9,734,000 | $ 9,705,000 |
Investment in Unconsolidated 44
Investment in Unconsolidated Joint Ventures (Details) | Apr. 05, 2018USD ($)item | Jul. 31, 2018USD ($) | Jun. 30, 2018USD ($)property | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)propertyitem | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($)propertyitem |
Investment in Unconsolidated Joint Ventures | |||||||
Equity in earnings from sale of unconsolidated joint venture property | $ 71,000 | $ 71,000 | |||||
Number of unconsolidated joint ventures | item | 5 | 5 | |||||
Number of properties owned and operated by each unconsolidated joint venture | property | 1 | 1 | 1 | ||||
Investment in unconsolidated joint ventures | $ 11,214,000 | $ 11,214,000 | $ 10,723,000 | ||||
Equity in earnings of unconsolidated joint ventures | 348,000 | $ 206,000 | 543,000 | $ 451,000 | |||
Income related to the discontinuance of hedge accounting on a mortgage swap | 110,000 | ||||||
Georgia | |||||||
Investment in Unconsolidated Joint Ventures | |||||||
Net Proceeds from the sale of a building and a portion of the land | $ 2,600,000 | ||||||
Share of gain (as a percent) | 50.00% | ||||||
Equity in earnings from sale of unconsolidated joint venture property | $ 71,000 | ||||||
Acres of land retained | item | 5 | ||||||
Wisconsin | |||||||
Investment in Unconsolidated Joint Ventures | |||||||
Share of gain (as a percent) | 50.00% | ||||||
Net Proceeds from the sale of property in unconsolidated joint venture | $ 12,800,000 | ||||||
Payment of mortgage | 6,970,000 | ||||||
Gain on sale of real estate | $ 2,000,000 | ||||||
MCB Real Estate LLC And Its Affiliates | |||||||
Investment in Unconsolidated Joint Ventures | |||||||
Investment in unconsolidated joint ventures | $ 8,408,000 | $ 8,408,000 |
Allowance for Doubtful Accoun45
Allowance for Doubtful Accounts (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Allowance for Doubtful Accounts | |||||
Balance in allowance for doubtful accounts | $ 0 | $ 0 | $ 0 | ||
Bad debt expense | $ 0 | $ 15,000 | $ 0 | $ 310,000 | |
Write-off of unbilled rent receivable | 362,000 | ||||
Write-off of unamortized intangible lease assets | 67,000 | ||||
Write off of tenant origination costs | $ 884,000 |
Debt Obligations- Mortgage Paya
Debt Obligations- Mortgage Payable current (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Mortgages Payable | ||
Mortgages payable, net | $ 391,599,000 | $ 393,157,000 |
Mortgages payable | ||
Mortgages Payable | ||
Mortgages payable, gross | 395,357,000 | 396,946,000 |
Unamortized deferred financing costs | (3,758,000) | (3,789,000) |
Mortgages payable, net | $ 391,599,000 | $ 393,157,000 |
Debt Obligations - Line of Cred
Debt Obligations - Line of Credit (Details) - USD ($) | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Aug. 02, 2018 | Dec. 31, 2017 | |
Line of Credit | ||||
Line of credit, net | $ 19,832,000 | $ 8,776,000 | ||
Facility | ||||
Line of Credit | ||||
Unused facility fee (as a percent) | 0.25% | |||
Interest rate during the period (as a percent) | 3.54% | 2.67% | ||
Line of credit, gross | $ 20,300,000 | 9,400,000 | ||
Unamortized deferred financing costs | (468,000) | (624,000) | ||
Facility | Credit Facility | ||||
Line of Credit | ||||
Line of credit, gross | 20,300,000 | $ 3,300,000 | 9,400,000 | |
Unamortized deferred financing costs | (468,000) | (624,000) | ||
Line of credit, net | 19,832,000 | $ 8,776,000 | ||
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 | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Related Party Transaction | ||||
Share based compensation charged to operations | $ 856,000 | $ 915,000 | $ 1,682,000 | $ 1,657,000 |
Majestic | ||||
Related Party Transaction | ||||
Fees under compensation and services agreement | 689,000 | 664,000 | 1,367,000 | 1,329,000 |
Property management costs allocated to real estate expenses | 309,000 | 284,000 | 608,000 | 570,000 |
Additional payment for the entity's share of all direct office expenses | 54,000 | 54,000 | 108,000 | 108,000 |
Executive officers and others | ||||
Related Party Transaction | ||||
Share based compensation charged to operations | 432,000 | 386,000 | 849,000 | 768,000 |
Joint venture partners | ||||
Related Party Transaction | ||||
Real estate property management costs | 22,000 | 33,000 | 65,000 | 82,000 |
Corporate joint venture | ||||
Related Party Transaction | ||||
Aggregate fees paid to other partners | 45,000 | 42,000 | 96,000 | 87,000 |
Decrease in equity earnings, joint venture transaction | 23,000 | 21,000 | 48,000 | 44,000 |
Chairman | General and administrative expense | ||||
Related Party Transaction | ||||
Fee paid | 69,000 | 69,000 | ||
Vice Chairman | General and administrative expense | ||||
Related Party Transaction | ||||
Fee paid | 27,500 | 27,500 | ||
Gould Investors L.P. | ||||
Related Party Transaction | ||||
Insurance Reimbursement | $ 206,000 | $ 174,000 | $ 404,000 | $ 347,000 |
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 ($) | Jun. 13, 2018 | Jun. 30, 2018 | Jun. 30, 2017 |
Common Stock Cash Dividend | |||
Quarterly cash dividend declared (in dollars per share) | $ 0.45 | ||
Cash dividend declared | $ 8,652,000 | $ 17,233,000 | $ 15,846,000 |
Shares Issued through Equity 50
Shares Issued through Equity Offering Program (Details) | 6 Months Ended |
Jun. 30, 2018USD ($)shares | |
Shares Issued through Equity Offering Program | |
Number of shares sold (in shares) | shares | 93,417 |
Proceeds from sale of shares, net of commission and before offering costs | $ 2,303,000 |
Payment of commissions on sale of shares | 23,000 |
Payment of offering costs on sale of shares. | $ 45,000 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Total charge to operations: | ||||
Share based compensation charged to operations | $ 856,000 | $ 915,000 | $ 1,682,000 | $ 1,657,000 |
Restricted stock | ||||
Stock Based Compensation | ||||
Vesting period | 5 years | |||
Summary of the activity of the incentive plans | ||||
Number of shares | 144,750 | 140,100 | ||
Average per share grant price (in dollars per share) | $ 25.31 | $ 24.75 | ||
Deferred compensation to be recognized over vesting period | $ 3,664,000 | $ 3,467,000 | ||
Non-vested beginning of year (in shares) | 651,650 | 626,400 | 612,900 | 591,750 |
Number of non-vested shares: | ||||
Non-vested beginning of year (in shares) | 651,650 | 626,400 | 612,900 | 591,750 |
Vested during year (in shares) | (13,500) | (106,000) | (118,450) | |
Forfeitures (in shares) | (150) | (150) | (500) | |
Non-vested end of year (in shares) | 651,500 | 612,900 | 651,500 | 612,900 |
Restricted stock and RSU grants: | ||||
Weighted average per share value of non-vested shares (based on grant price) (in dollars per share) | $ 23.56 | $ 22.75 | $ 23.56 | $ 22.75 |
Value of stock vested during the year (based on grant price) | $ 1,248,000 | $ 2,289,000 | $ 3,008,000 | |
Weighted average per share value of shares forfeited during the year (based on grant price) (in dollars per share) | $ 23.93 | $ 8.29 | $ 23.93 | $ 8.37 |
Total charge to operations: | ||||
Share based compensation charged to operations | $ 765,000 | $ 878,000 | $ 1,500,000 | $ 1,571,000 |
Compensation costs related to non-vested awards that have not yet been recognized | $ 8,349,000 | $ 8,349,000 | ||
Approximate weighted average vesting period | 2 years 8 months 12 days | |||
RSUs | ||||
Stock Based Compensation | ||||
Percentage of units to be vested on satisfaction of performance criteria of average total stockholder return | 50.00% | |||
Percent of number of units to be vested on satisfaction of performance criteria related to average annual return on capital | 50.00% | |||
Summary of the activity of the incentive plans | ||||
Non-vested beginning of year (in shares) | 76,250 | 200,000 | 76,250 | 200,000 |
Number of non-vested shares: | ||||
Non-vested beginning of year (in shares) | 76,250 | 200,000 | 76,250 | 200,000 |
Vested during year (in shares) | (113,584) | (113,584) | ||
Forfeitures (in shares) | (86,416) | 0 | (86,416) | |
Non-vested end of year (in shares) | 76,250 | 76,250 | ||
Total charge to operations: | ||||
Share based compensation charged to operations | $ 91,000 | $ 37,000 | $ 182,000 | $ 86,000 |
Compensation costs related to non-vested awards that have not yet been recognized | $ 728,000 | $ 728,000 | ||
Approximate weighted average vesting period | 2 years | |||
2016 Incentive Plan | ||||
Stock Based Compensation | ||||
Number of shares authorized for issuance | 750,000 | 750,000 | ||
Shares vested pursuant to Plan | 3,000 | |||
2016 Incentive Plan | Restricted stock | ||||
Summary of the activity of the incentive plans | ||||
Number of shares | 284,850 | |||
Number of non-vested shares: | ||||
Forfeitures (in shares) | (200) | |||
2016 Incentive Plan | RSUs | ||||
Number of non-vested shares: | ||||
Non-vested end of year (in shares) | 76,250 | 76,250 | ||
2012 Incentive Plan | ||||
Stock Based Compensation | ||||
Shares issued pursuant to plan | 500,700 | |||
Shares forfeited pursuant to Plan | 3,400 | |||
Shares vested pursuant to Plan | 127,450 | |||
Summary of the activity of the incentive plans | ||||
Number of shares | 0 | |||
Pay-for-performance program | RSUs | General and administrative expense | ||||
Summary of the activity of the incentive plans | ||||
Deferred compensation to be recognized over vesting period | $ 1,005,000 |
Fair Value Measurements - Avail
Fair Value Measurements - Available for Sale (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Facility | ||
Fair Value of Financial Instruments | ||
Line of credit, gross | $ 20,300,000 | $ 9,400,000 |
Recurring | Level 2 | Interest rate swap | ||
Financial assets: | ||
Derivative financial instruments | 4,032,000 | 1,615,000 |
Financial liabilities: | ||
Derivative financial instruments | 109,000 | 1,492,000 |
Mortgages payable | ||
Fair Value of Financial Instruments | ||
Estimated fair value of mortgages payable | 389,903,000 | 397,103,000 |
Carrying value of mortgage loans | 395,357,000 | 396,946,000 |
Excess of carrying value over fair value | $ 5,454,000 | |
Excess of fair value over carrying value | $ 157,000 | |
Blended or estimated market interest rate (as a percent) | 4.50% | 4.25% |
Weighted average remaining term of the mortgages | 8 years 6 months | 8 years 8 months 12 days |
Fair Value Measurements - Inter
Fair Value Measurements - Interest Rate Derivatives (Details) - Interest rate derivatives - Cash flow hedges | 6 Months Ended |
Jun. 30, 2018USD ($)item | |
Fair Value Measurements | |
Number of interest rate derivatives held | 28 |
Number of mortgage loans outstanding | 28 |
Number of mortgage loans designated as cash flow hedges | 28 |
Notional Amount | $ | $ 131,103,000 |
Weighted average maturity | 6 years 7 months 6 days |
Weighted average annual interest rate (as a percent) | 4.13% |
Minimum | |
Fair Value Measurements | |
Fixed Interest Rate (as a percent) | 3.02% |
Maximum | |
Fair Value Measurements | |
Fixed Interest Rate (as a percent) | 5.38% |
Fair Value Measurements - Deriv
Fair Value Measurements - Derivative Instruments, Gain (Loss) (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018USD ($)item | Jun. 30, 2017USD ($)item | Jun. 30, 2018USD ($)item | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Reclassification of gain (loss) | |||||
Amount of reclassification from Accumulated other comprehensive income into Interest expense or Equity as a result of forecasted transaction being no longer probable of occurring | $ (118,000) | ||||
Amount of reclassification from Accumulated other comprehensive income to earnings | $ 110,000 | $ 110,000 | |||
Interest rate swap | Cash flow hedges | |||||
Fair Value Measurements | |||||
Amount of gain (loss) recognized on derivatives in Other comprehensive income | 1,009,000 | $ (1,055,000) | 3,509,000 | (986,000) | |
Amount of reclassification from Accumulated other comprehensive income into Interest expense | (95,000) | (545,000) | (291,000) | (1,054,000) | |
Reclassification of gain (loss) | |||||
Amount of reclassification from Accumulated other comprehensive income to earnings | 110,000 | 118,000 | |||
Amount of effectiveness testing on cash flow hedges | 0 | 0 | 0 | 0 | |
Additional amount to be reclassified during the next twelve months | 222,000 | ||||
Credit risk related contingent feature | |||||
Accrued interest on derivative in a liability position | 9,000 | 9,000 | $ 53,000 | ||
Fair value of derivative in a liability position, including accrued interest but excluding adjustments for nonperformance risk | 126,000 | 126,000 | 1,638,000 | ||
Termination value of derivative agreement | $ 126,000 | $ 126,000 | 1,638,000 | ||
Interest rate swap | Cash flow hedges | Unconsolidated joint ventures | |||||
Fair Value Measurements | |||||
Number of unconsolidated joint ventures of the entity with interest rate derivatives outstanding | item | 1 | ||||
Percentage of ownership in unconsolidated joint venture | 50.00% | 50.00% | |||
Number interest rate derivatives outstanding | item | 1 | 1 | |||
Amount of gain (loss) recognized on derivatives in Other comprehensive income | $ 22,000 | (21,000) | $ 69,000 | (12,000) | |
Amount of reclassification from Accumulated other comprehensive income into Equity in earnings of unconsolidated joint ventures | $ 110,000 | $ (16,000) | 103,000 | $ (35,000) | |
Reclassification of gain (loss) | |||||
Number of interest rate swaps | item | 2 | 2 | |||
Interest rate swap | Cash flow hedges | Accrued expenses and other liabilities | |||||
Credit risk related contingent feature | |||||
Adjustments for nonperformance risk | 8,000 | $ 93,000 | |||
3.49% Interest rate swaps | Cash flow hedges | Unconsolidated joint ventures | |||||
Fair Value Measurements | |||||
Notional Amount | $ 6,983,000 | $ 6,983,000 | |||
Fixed Interest Rate (as a percent) | 3.49% | 3.49% | |||
5.81% Interest rate swaps | Cash flow hedges | Unconsolidated joint ventures | |||||
Fair Value Measurements | |||||
Notional Amount | $ 3,402,000 | $ 3,402,000 | |||
Fixed Interest Rate (as a percent) | 5.81% | 5.81% |
Commitments (Details)
Commitments (Details) - Building located In Hauppauge, New York - USD ($) | Dec. 31, 2018 | Jun. 30, 2018 |
Contractual obligation | $ 7,800,000 | |
Amount spent to date for improvement obligation | $ 6,261,000 |