One Liberty Properties (OLP) Q2 2024 earnings summary

Executive summary

• Reported net income attributable to common stockholders of $9.6 million for Q2 2024, up from $6.5 million in Q2 2023, and $14.7 million for the six months ended June 30, 2024, up from $11.9 million year-over-year.

• Entered contracts to acquire two industrial properties for $61.6 million and closed on two industrial property purchases for $11.7 million.

• Completed sales of seven properties for $25.9 million, generating $9.2 million in net gains, including a $2.1 million gain from a vacant retail property.

• More than 69% of base rent is expected to be generated by industrial properties after pending acquisitions.

• Recorded a $1.1 million impairment loss on a health and fitness property under contract for sale.

Financial highlights

• Total revenues for Q2 2024 were $21.8 million, down from $22.4 million in Q2 2023; six-month revenues were $44.5 million, down from $45.4 million year-over-year.

• Funds from Operations (FFO) for Q2 2024 were $9.2 million ($0.48/share), down 3.4% year-over-year; Adjusted FFO (AFFO) was $10.2 million ($0.53/share), down 4.8%.

• Operating expenses increased to $14.9 million from $14.3 million, mainly due to the impairment loss and higher real estate expenses.

• Weighted average interest rate on mortgage debt was 4.42% for Q2 2024, up from 4.14% in Q2 2023.

• Weighted average number of diluted shares outstanding in Q2 2024: 20.68 million.

Outlook and guidance

• Entered contracts to acquire two multi-tenant industrial properties in Iowa for $61.3 million, with closings expected in Q3/Q4 2024.

• Anticipates selling additional properties in 2024, including retail assets, and expects to recognize further gains.

• Plans to refinance or pay off $9–11 million of mortgages maturing in 2024, with new financings expected at higher interest rates.

• Expects to close on two additional industrial properties in Q3 and Q4 2024, with significant new mortgage debt planned.

• Anticipates further enhancement of cash flow stability and growth through disciplined acquisitions and deployment of available cash.