SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 31, 1998
ONE LIBERTY PROPERTIES, INC.
(Exact name of registrant as specified in charter)
Maryland 0-11083 13-3147497
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(State or other (Commission File No.) (IRS Employer
Jurisdiction of I.D. No.)
Incorporation)
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 516-466-3100
Item 2. Acquisition or Disposition of Assets.
On March 31, 1998, in an ordinary course of business transaction, a
limited liability company in which a wholly-owned subsidiary of Registrant is a
95% member, closed on the acquisition of the property located at 300 Gold Street
(a/k/a 131-143 Flatbush Avenue), Brooklyn, New York (the "Property"). The
Property is improved with a six story and basement office building containing
approximately 66,000 square feet and is situated on approximately 19,391 square
feet of land, which includes paved parking for approximately 25 cars. The
Property is net leased to the City of New York as assignee of the New York City
Transit Authority. The Property is used as a training facility for New York City
Police officers. The lease is for a 15 year term expiring October 15, 2002. The
current annual rent is $850,000.00. The purchase price was $6,700,000, which was
paid in part by a new $4,525,000 mortgage from North Fork Bank. The mortgage is
for a five year term (with a right to extend for an additional five years at a
fixed rate of interest to be set at 210 basis points above the then yield on
five year U.S. Treasuries) and calls for a fixed rate of interest of 7.5% for
the first five years and a pay rate based on a 25 year amortization schedule.
The balance of the acquisition cost was paid by a $2,380,000 advance under
Registrant's line of credit, which line of credit is summarized in Registrant's
Form 10-K for the year ended December 31, 1997 under the caption "Credit
Agreement". The lenders under the Credit Agreement are Bank Leumi Trust Company
of New York and the Commercial Bank of New York as successor to the First Bank
of the Americas.
The seller was Rebecca H. Rawson, a referee in a foreclosure proceeding
brought by the beneficial seller of the Property, WHCS Real Estate Limited
Partnership, an entity unaffiliated with Registrant or with any director or
officer of Registrant. The beneficial seller assigned its bid in foreclosure to
Registrant's affiliate and the purchase price disclosed represents the aggregate
of the foreclosure bid price and price for the assignment of the foreclosure
bid. The purchase price was negotiated at arms-length.
Item 7. Financial Statements, ProForma Financial Information and Exhibits.
Financial Statements:
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300 Gold Street
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Report of Independent Auditors
Statement of Revenues and Certain Expenses
for the year ended December 31, 1997
Notes to Statement of Revenues and Certain Expenses
One Liberty Properties, Inc.
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ProForma Condensed Consolidated Balance Sheet as of
December 31, 1997 (Unaudited)
ProForma Condensed Consolidated Statement of Income
for the year ended December 31, 1997 (Unaudited)
Exhibits:
1. Agreement and Assignment with respect to purchase of 300 Gold Street.
Filed as part of exhibit 10.6 to Amendment No. 1 to Registration Statement on
Form S-11 (Registration No. 333-45937) and incorporated herein by reference.
2. Lease dated July 1987 with respect to 300 Gold Street. Filed as part of
exhibit 10.6 to Amendment No. 1 to Registration Statement on Form S-11
(Registration No. 333-45937) and incorporated herein by reference.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ONE LIBERTY PROPERTIES, INC.
------------------------------------
By:(s)
Mark H. Lundy
Secretary
Date: April 9, 1998
Report of Independent Auditors
To the Board of Directors of
One Liberty Properties, Inc.
We have audited the statement of revenues and certain expenses of the
property at 300 Gold Street (the "Property"), as described in Note 1, for the
year ended December 31, 1997. This financial statement is the responsibility of
management of the Property. Our responsibility is to express an opinion on this
financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission for inclusion in the Registration Statement (Form S-11)
of One Liberty Properties, Inc., and is not intended to be a complete
presentation of the Property's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the revenues and certain expenses of the Property as
described in Note 1 for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
March 11, 1998 Ernst & Young LLP
New York, New York
300 Gold Street
Statement of Revenues and Certain Expenses (Note 1)
For the year ended December 31, 1997
Revenues:
Base rent $ 768,333
Certain expenses:
Management fees 12,000
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Revenues in excess of certain expenses $ 756,333
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See accompanying notes.
300 Gold Street
Notes to Statement of Revenues and Certain Expenses
December 31, 1997
1. Basis of Presentation
Presented herein is the statement of revenues and certain expenses related
to the operations of the property, located at 300 Gold Street (also known as
131-143 Flatbush Avenue) in the borough of Brooklyn in New York City, (the
"Property"). The Property is comprised of an office building containing 66,000
square feet.
The accompanying financial statements have been prepared in accordance with
the applicable rules and regulations of the Securities and Exchange Commission
for the acquisition of real estate properties. Accordingly, the financial
statements exclude certain expenses that may not be comparable to those expected
to be incurred by One Liberty Properties, Inc. (the "Company") in the proposed
future operations of the Property. It is expected that the Property will be
acquired by the Company in April, 1998. Items excluded consist of interest,
amortization and depreciation.
2. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
3. Revenue Recognition and Concentration of Revenue
The Property is leased by the New York City Transit Authority (the
"Tenant") under an operating lease which expires on October 15, 2002. The lease
provides for fixed net rent payments of $800,000 per annum until October 15,
1997 at which time the fixed net rent payments increase to $850,000 per annum
through the lease expiration. The fixed net rent is net to the landlord, with
the Tenant assuming the sole responsibility for the condition, operation,
maintenance and management of the Property. Minimum rental income is recognized
on a straight-line basis over the term of the lease. The excess of amounts due
pursuant to the underlying lease over amounts so recognized amounted to
approximately $ 42,083 for the year ended December 31, 1997.
300 Gold Street
Notes to Statement of Revenues and Certain Expenses (continued)
4. Management Agreement
During 1997 the Property was managed by CRG Management, LLC. As
consideration for performing such services, CRG Management, LLC receives a fee
equal to $1,000 per month.
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
ProForma Condensed Consolidated Balance Sheet
As of December 31, 1997
(Unaudited)
ASSETS
ProForma
Adjust-
Historical ments(A) ProForma
---------- -------- --------
Real estate investments, at cost
Land $ 12,210,147 $ 1,340,000 $ 13,550,147
Buildings 38,641,419 5,360,000 44,001,419
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50,851,566 6,700,000 57,551,566
Less accumulated depreciation 2,534,582 2,534,582
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48,316,984 6,700,000 55,016,984
Mortgages receivable - less unamortized discount -
(substantially all from related parties) 5,943,450 5,943,450
Cash and cash equivalents 1,606,364 (200,000) 1,406,364
Unbilled rent receivable 665,052 665,052
Rent, interest, deposits and other receivables 300,584 300,584
Investment in BRT Realty Trust - (related party) 240,384 240,384
Deferred financing costs 510,123 510,123
Other 64,614 64,614
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$57,647,555 $6,500,000 $64,147,555
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages payable $20,545,247 $ 4,500,000 $25,045,247
Note payable - bank 4,605,029 2,000,000 6,605,029
Accrued expenses and other liabilities 394,459 394,459
Dividends payable 791,945 791,945
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26,336,680 6,500,000 32,836,680
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Redeemable Convertible Preferred Stock,
$1 par value; $1.60 cumulative annual dividend;
2,300,000 shares authorized; 808,776 shares issued;
liquidation and redemption values of $16.50 13,106,970 13,106,970
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Stockholders' equity:
Common Stock, $1 par value; 25,000,000 shares authorized;
1,561,450 and 1,473,642 shares issued and outstanding 1,561,450 1,561,450
Paid-in capital 14,419,609 14,419,609
Net unrealized gain on available-for-sale securities 146,706 146,706
Accumulated undistributed net income 2,076,140 2,076,140
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18,203,905 18,203,905
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$57,647,555 $ 6,500,000 $64,147,555
=========== =========== ===========
See accompanying notes.
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
ProForma Condensed Consolidated Statement of Income
For the Year Ended December 31, 1997
(Unaudited)
ProForma
Adjust-
Historical ments (B) ProForma
---------- --------- --------
Revenues:
Rental income $ 5,341,491 $ 843,165 $ 6,184,656
Interest from related parties 832,579 832,579
Interest and other income 110,739 (6,000) 104,739
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6,284,809 837,165 7,121,974
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Expenses:
Depreciation and amortization 1,023,345 134,000 1,157,345
Interest - mortgages payable 1,517,126 337,500 1,854,626
Interest - bank 210,305 178,800 389,105
Leasehold rent 288,833 288,833
General and administrative 629,420 - 629,420
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3,669,029 650,300 4,319,329
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Income before gain on sale of real estate
and minority interest 2,615,780 186,865 2,802,645
Gain on sale of real estate including minority
interest share of $215,336 599,251 599,251
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Income before minority interest 3,215,031 186,865 3,401,896
Minority interest (230,839) (20,000) (250,839)
----------- ------------ ---------
Net income $ 2,984,192 $ 166,865 $3,151,057
=========== ========== =========
Calculation of net income applicable to common stockholders:
Net income $ 2,984,192 $3,151,057
Less dividends and accretion on preferred stock 1,450,220 1,450,220
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Net income applicable to common stockholders $ 1,533,972 $1,700,837
=========== ===========
Weighted average number of common shares outstanding:
Basic 1,522,967 1,522,967
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Diluted 1,529,203 1,529,203
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Net income per common share:
Basic $ 1.01 $ 1.12
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Diluted $ 1.00 $ 1.12
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Cash distributions per share:
Common Stock $ 1.20
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Preferred Stock $ 1.60
==============
See accompanying notes.
Notes to ProForma Financial Statements
(Unaudited)
ProForma Condensed Consolidated Balance Sheet
As of December 31, 1997
(A) Reflects the expected acquisition of 300 Gold Street in Brooklyn, New York
at December 31, 1997 with cash, borrowings under a mortgage note and borrowings
under the line of credit.
ProForma Condensed Consolidated Statement of Income
For the Year Ended December 31, 1997
(B) Reflects the revenues and expenses of 300 Gold Street in Brooklyn, New York
in addition to the increase in interest expense associated with additional
borrowings and a decrease in interest income as a result of a decrease in cash
and cash equivalents as if the property were purchased at January 1, 1997.