ONE LIBERTY PROPERTIES INC (OLP)

CIK: 0000712770. SIC: 6798 Real Estate Investment Trusts. Latest 10-K as of: 2026-03-06.

SIC breadcrumb: Finance, Insurance, And Real Estate > Holding And Other Investment Offices > SIC 6798 Real Estate Investment Trusts

SEC company page: https://www.sec.gov/edgar/browse/?CIK=712770. Latest filing source: 0001104659-26-024579.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000712770.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000712770.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001104659-26-056274.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-06. Report date: 2026-03-31.

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend such forward-looking statements to be covered by the safe harbor provision for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “could,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions or variations thereof and include, without limitation, statements regarding our future estimated base rent, funds from operations, adjusted funds from operations and our dividend. Among other things, forward looking statements with respect to (i) estimates of base rent and rental income exclude variable rent (including tenant reimbursements) and the adjustments required by GAAP to present rental income, (ii) estimates of base rent may not, unless otherwise expressly indicated, reflect the expenses (e.g., real estate expenses, interest, depreciation and amortization or any one or more of the foregoing) with respect to the associated property, (iii) anticipated property purchases, sales, financings and/or refinancings may not be completed during the period or on the terms indicated or at all, (iv) estimates of gains from property sales or proceeds from financing or refinancing transactions are subject to adjustment, among other things, because actual closing costs may differ from the estimated costs and (v) anticipated rent increases, including those tied to filling of vacancies or as a result of market-to-market opportunities (i.e., renewing leased premises at higher rental rates) may not be realized. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect actual results, performance or achievements.

The uncertainties, risks and factors which may cause actual results to differ materially from current expectations include, but are not limited to:

●

the financial failure of, or other default in payment by, tenants under their leases and the potential resulting vacancies;

●

adverse changes and disruption in the sectors in which our tenants operate which could impact our tenants’ ability to pay rent and expense reimbursement;

●

the level and volatility of interest rates;

●

loss or bankruptcy of one or more of our tenants, and bankruptcy laws that may limit our remedies if a tenant becomes bankrupt and rejects its lease;

●

general economic and business conditions and developments, including those currently affecting or that may affect our economy;

●

general and local real estate conditions, including any changes in the value of our real estate;

●

our ability to renew or re-lease space as leases expire;

●

our ability to pay dividends;

●

the effect of changes in political conditions in the U.S., including in connection with the administration’s policies and priorities, or otherwise;

●

changes in governmental laws and regulations relating to real estate and related investments;

●

compliance with credit facility and mortgage debt covenants;

●

the availability of, and costs associated with, sources of capital and liquidity;

●

competition in our industry;

●

technological changes, such as artificial intelligence, autonomous vehicles, reconfiguration of supply chains, robotics, 3D printing or other technologies;

●

potential natural disasters, epidemics, pandemics or outbreak of infectious disease, such as COVID-19, and other

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potentially catastrophic events such as acts of war and/or terrorism; and

●

the other risks, uncertainties and factors described in the reports and documents we file with the SEC including the risks, uncertainties and factors described in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”) under the caption “Item 1A. Risk Factors” for a discussion of certain factors which may cause actual results to differ materially from current.

In light of the factors referred to above, the future events discussed or incorporated by reference in this report and other documents we file with the SEC may not occur, and actual results, performance or achievements could differ materially from those anticipated or implied in the forward-looking statements.  Given these uncertainties, you should not rely on any forward-looking statements.

Except as may be required under the U.S. federal securities laws, we undertake no obligation to publicly update our forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make in our reports that are filed with or furnished to the SEC.

Challenges and uncertainties facing the St. Louis Park, Minnesota property

As reported in our Annual Report on Form 10-K for the year ended December 31, 2025, we recorded an impairment charge of $3.3 million with respect to our retail property located at St. Louis Park, Minnesota. At March 31, 2026, approximately 75% of the property is vacant. Based on the lease in effect at April 1, 2026, we expect this property to generate rental income (excluding tenant reimbursements) of $505,000 and in 2025, we generated $917,000 of rental income (excluding tenant reimbursements) from this property. We estimate that this property will incur unreimbursed real estate expenses of approximately $400,000 during the nine months ending December 31, 2026. We are pursuing the sale and/or lease of this property and may be required to take additional impairment(s) with respect thereto.

Overview

We are a self-administered and self-managed real estate investment trust, or REIT. To qualify as a REIT, under the Internal Revenue Code of 1986, as amended, we must meet a number of organizational and operational requirements, including a requirement that we distribute currently at least 90% of ordinary taxable income to our stockholders. We intend to comply with these requirements and to maintain our REIT status.

We acquire, own and manage a geographically diversified portfolio consisting primarily of industrial properties. As of March 31, 2026, we own 111 properties with approximately 12.4 million square feet, (including 79 industrial properties with approximately 11.0 million square feet) located in 33 states. Based on square footage, our occupancy rate at March 31, 2026 is approximately 98.8%.

We face a variety of risks and challenges in our business, including the possibility we will not be able to: lease our properties on terms favorable to us or at all; collect amounts owed to us by our tenants; renew or re-let, on acceptable terms, leases that are expiring or otherwise terminating; acquire or dispose of properties on acceptable terms; or grow, through acquisitions or otherwise, our property portfolio so as to generate additional net income and cash for distribution.

Other than with respect to our continuing focus on acquiring industrial properties, we generally seek to manage the risk of our real property portfolio and the related financing arrangements by (i) diversifying among locations, tenants, scheduled lease expirations, mortgage maturities and lenders, and (ii) minimizing our exposure to interest rate fluctuations.

We monitor the risk of tenant non-payments through a variety of approaches tailored to the applicable situation. Generally, based on our assessment of the credit risk posed by our tenants, we monitor a tenant’s financial condition through one or more of the following actions: reviewing tenant financial statements or other financial information, obtaining other tenant related information, reviewing changes in tenant payment patterns, regular contact with tenant’s representatives, tenant credit checks and regular management reviews of our tenants. We may sell a property if the tenant’s financial condition is unsatisfactory.

In acquiring and disposing of properties, among other things, we evaluate the terms of the leases, the credit of the existing tenants, the terms and conditions of the related financing arrangement (including any contemplated financing) and engage in a fundamental analysis of the real estate to be bought or sold. This fundamental analysis takes into account, among

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other things, the estimated value of the property, local competition and demographics, and the ability to re-rent or dispose of the property on favorable terms upon lease expiration or early termination. In addition, in evaluating property sales, we take into account, among other things, the property type (i.e., industrial, retail or other), our perception of the property’s long-term prospects (including the likelihood for, and the extent of, any further appreciation or diminution in value), the term remaining on the related lease and mortgage debt, the price and other terms and conditions for the sale of such property and the returns anticipated to be generated from the reinvestment of the net proceeds to us from such property sale.

Our Base Rent is approximately $83.2 million; Base Rent represents the base rent payable to us during the twelve months ending March 31, 2027 under leases in effect at April 1, 2026 (excluding tenant reimbursements and after giving effect to any abatements, concessions, deferrals or adjustments). It excludes an aggregate of $2.2 million representing the Base Rent of three retail properties which were sold or are anticipated to be sold during the three months ending June 30, 2026.

The following table sets forth information about our properties by industry sector as of March 31, 2026:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Number of

​

Number of

​

Building

​

​

​

​

Percentage of

Type of Property

​

Tenants

​

Properties

​

Square Feet

  ​ ​ ​

Base Rent

​

Base Rent

Industrial

105

​

79

​

11,026,802

​

$

70,094,000

84.2

Retail

36

​

27

​

1,093,792

​

9,398,000

11.3

Other (a)

4

​

5

​

250,435

​

3,736,000

4.5

​

145

111

​

12,371,029

$

83,228,000

100.0

(a)

Includes an office, two theaters, a health and fitness center and a restaurant.

​

The following table sets forth scheduled expirations of leases at our properties as of March 31, 2026 for the years indicated below:

​

​

​

​

​

​

​

​

​

​

​

Lease Expirations (a)

​

Number of

​

Building

​

​

​

Percentage of

for the twelve months ending March 31,

  ​ ​ ​

Leases

  ​ ​ ​

Square Feet (b)

  ​ ​ ​

Base Rent

  ​ ​ ​

Base Rent

2027

18

​

892,765

​

$

3,976,000

​

4.8

2028

31

​

2,428,486

​

15,213,000

​

18.3

2029

22

​

1,312,827

​

10,077,000

​

12.1

2030

22

​

1,998,503

​

12,732,000

​

15.3

2031

25

​

1,418,910

​

12,190,000

​

14.6

2032

18

​

1,974,954

​

11,733,000

​

14.1

2033

11

​

702,324

​

4,962,000

​

6.0

2034

8

​

762,916

​

7,279,000

​

8.7

2035

6

​

206,635

​

1,971,000

​

2.4

2036 and thereafter

5

​

518,529

​

3,095,000

​

3.7

​

166

12,216,849

​

$

83,228,000

100.0

(a)

Lease expirations assume tenants do not exercise existing renewal or termination options.

(b)

Excludes an aggregate of 154,180 square feet of vacant space.

​

​

Property Transactions During the Three Months Ended March 31, 2026

​

Acquisitions

​

O

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-03-06. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

​

Overview

​

We are a self-administered and self-managed REIT focused on acquiring, owning and managing a geographically diversified portfolio consisting primarily of industrial properties. As of February 1, 2026 and after giving effect to the ten industrial properties we acquired in January 2026, we own 113 properties with approximately 12.5 million square feet, including 79 industrial properties with approximately 11.0 million square feet, and we anticipate that our industrial properties will generate approximately 81.6% of our 2026 base rent.

​

General Challenges and Uncertainties

​

In addition to the challenges and uncertainties described under “Cautionary Note Regarding Forward-Looking Statements”, and “Item 1A. Risk Factors”, we, among other things, face additional challenges and uncertainties, including the possibility we will not be able to: lease our properties on terms favorable to us or at all; collect amounts owed to us by our tenants; renew or re-let, on acceptable terms, leases that are expiring or otherwise terminating; acquire or dispose of properties on acceptable terms; or grow, through acquisitions or otherwise, our property portfolio so as to generate additional rental and net income. If we are unable to address these challenges successfully, we may be unable to sustain our current level of dividend payments.

​

Other than with respect to our continuing focus on acquiring industrial properties, we generally seek to manage the risk of our real property portfolio and the related financing arrangements by (i) diversifying among locations, tenants, scheduled lease expirations, mortgage maturities and lenders, and (ii) minimizing our exposure to interest rate fluctuations. As a result, as of December 31, 2025:

​

●

our 2026 base rent is derived from the following property types: 80.9% from industrial, 14.6% from retail and 4.5% from other properties,

●

there are two states with properties that account for more than 10% of 2026 base rent (i.e., South Carolina at 12.8% and Pennsylvania at 10.8%) and six states with properties that account for 5% or more of 2026 base rent,

●

there is one tenant at five properties that accounts for 5% of 2026 base rent (i.e., FedEx at 5%),

●

the weighted average remaining term on our leases is 4.4 years,

●

the percentage of our 2026 base rent represented by expiring leases equals or exceeds 10% for each of 2027 through 2031 (i.e., 18.3% in 2027, 16.0% in 2028, 14.3% in 2029, 15.2% in 2030 and 11.1% in 2031),

●

the weighted average remaining term to maturity of our mortgage debt is 5.8 years and the weighted average interest rate thereon is 4.88%,

●

substantially all of our mortgage debt bears interest at fixed rates, and

●

in 2026, 2027 and 2028, 5.5%, 9.3% and 7.6%, respectively, of our total scheduled principal mortgage payments (i.e., amortization and balances due at maturity) is due.

​

We monitor the risk of tenant non-payments through a variety of approaches tailored to the applicable situation. Generally, based on our assessment of the credit risk posed by our tenants, we monitor a tenant’s financial condition through one or more of the following actions: reviewing tenant financial statements or other financial information, obtaining other tenant related information, reviewing changes in tenant payment patterns, regular contact with tenant’s representatives, tenant credit checks and regular management reviews of our tenants. We may sell a property if the tenant’s financial condition is unsatisfactory.

​

We monitor, on an ongoing basis, our expiring leases and generally approach tenants with expiring leases (including those subject to renewal options) at least a year prior to lease expiration to determine their interest in renewing their leases. During the three years ending December 31, 2028, 70 leases for 64 tenants at 47 properties representing $30.9 million, or 37.4%, of 2026 base rent expire.

​

In acquiring properties, we balance an evaluation of the terms of the leases and the credit of the existing tenants with a fundamental analysis of the real estate to be acquired, which analysis takes into account, among

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other things, the estimated value of the property, local demographics and the ability to re-rent or dispose of the property on favorable terms upon lease expiration or early termination.

​

2025 Activities

​

In 2025, we:

​

●

acquired 13 industrial properties for an aggregate purchase price of $188.8 million, including $112.3 million in mortgage debt. These properties account for $12.5 million, or 15.1%, of our 2026 base rent and we anticipate that in 2026, these properties will generate $13.3 million of rental income (excluding tenant reimbursements), $8.4 million of depreciation and amortization expense and $6.5 million of interest expense.

●

sold ten properties (i.e., seven retail, a restaurant, a veterinary hospital and a property ground leased to a multi-unit apartment complex owner/operator) for an aggregate net sales proceeds of $58.9 million and an aggregate net gain on sale of real estate of $18.7 million. The properties sold accounted for $2.4 million, or 2.4%, and $4.5 million, or 5.0%, of 2025 and 2024 rental income, net, respectively.

●

sold two joint venture properties - our 50% share of the (i) net sales proceeds was $2.4 million and (ii) gain on sales was $991,000.

​

Recent Developments

​

We purchased, on January 29, 2026, a 637,633 square foot portfolio comprised of ten industrial properties (the “Portfolio Acquisition”) located in seven markets (i.e., Greensboro, North Carolina, Columbia, South Carolina, Birmingham, Alabama, Omaha, Nebraska, Oklahoma City, Oklahoma, Salt Lake City, Utah and Jackson, Mississippi) and leased to six tenants (i.e., Mondelez Global, Husqvarna U.S. Holdings, L&W Supply Corporation, Owens & Minor Distribution, Bimbo Bakeries USA, and HABE USA), for $56.7 million, including new mortgage debt on six of the properties of $17.0 million bearing an interest rate of 5.53% and maturing in 2033. We also borrowed $30.0 million from our credit facility (which bears a fluctuating interest rate of 5.45% at January 29, 2026) in connection with this purchase. We anticipate paying down our credit facility debt from the net proceeds of property sales and mortgage financing on two of the unencumbered properties included in the Portfolio Acquisition. As of January 29, 2026, the base rent in 2026 for these properties is approximately $2.8 million, and we estimate that after giving effect to anticipated lease renewals (as to which no assurance can be provided), the 2026 base rent for these properties will be approximately $3.6 million. We also estimate that in 2026, these properties will generate $2.6 million of interest expense (including $1.7 million of such expense from the credit facility assuming an interest rate of 5.45% and that $30.0 million remains outstanding thereon).

​

As of February 27, 2026, $30.0 million is outstanding under our credit facility bearing a floating rate of interest of 5.42% per year.

​

Pending Transactions

​

We entered into a contract in:

​

●

October 2025, to sell a vacant retail property located in Cary, North Carolina for $6.0 million. It is anticipated the (i) property will be sold in March 2026 and (ii) sale will result in a gain of approximately $2.5 million, which will be recognized as Gain on sale of real estate, net, in the consolidated statement of income for the quarter ending March 31, 2026. This property accounted for $192,000 and $460,000 of rental income, net, $93,000 and $93,000 of depreciation and amortization expense, and $45,000 and $110,000 of mortgage interest expense for 2025 and 2024, respectively.

●

January 2026, to sell a retail property located in Newport News, Virginia for $4.2 million. It is anticipated the (i) property will be sold in April 2026 and (ii) sale will result in a gain of approximately $1.3 million, which will be recognized as Gain on sale of real estate, net, in the consolidated statements of income for the three and six months ending June 30, 2026. This property accounted for $360,000 and $340,000 of rental income, net, and $115,000 and $113,000 of depreciation and amortization expense for 2025 and 2024, respectively.

●

January 2026, to purchase 14 acres of land for $800,000 adjacent to one of the Columbia, SC properties acquired in the Portfolio Acquisition.

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Comparison of Years Ended December 31, 2025 and 2024

Results of Operations -

​

Revenues

​

The following table compares total revenues for the periods indicated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

Increase

​

​

(Dollars in thousands)

  ​ ​ ​

2025

  ​ ​ ​

2024

  ​ ​ ​

(Decrease)

  ​ ​ ​

% Change

Rental income, net

​

$

97,161

​

$

90,313

​

$

6,848

7.6

Lease termination fees

​

​

66

​

​

250

​

​

(184)

(73.6)

Total revenues

​

$

97,227

​

$

90,563

​

$

6,664

7.4

​

Rental income, net.

​

The following table details the components of rental income, net, for the periods indicated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

Increase

​

​

(Dollars in thousands)

​

2025

  ​ ​ ​

2024

  ​ ​ ​

(Decrease)

  ​ ​ ​

% Change

Acquisitions (a)

​

$

12,489

​

$

1,719

​

$

10,770

​

626.5

Dispositions (b)

​

​

2,351

​

​

7,259

​

​

(4,908)

​

(67.6)

Same store (c)

​

​

82,321

​

​

81,335

​

​

986

​

1.2

Rental income, net

​

$

97,161

​

$

90,313

​

$

6,848

​

7.6

(a)

The 2025 column represents rental income from properties acquired since January 1, 2024; the 2024 column represents rental income from properties acquired during the year ended December 31, 2024.

(b)

The 2025 column represents rental income from properties sold during the year ended December 31, 2025; the 2024 column represents rental income from properties sold since January 1, 2024.

(c)

Represents rental income from 87 properties that were owned for the entirety of the periods presented.

​

Changes at same store properties

​

The increase in same store rental income is due to increases of:

​

-

$1.5 million of rental income from various lease amendments and extensions at several properties,

​

-

$1.2 million of rental income due to new and/or replacement tenants at several properties, and

​

-

$422,000 in tenant reimbursements, of which $361,000 relates to insurance and common area maintenance expenses generally incurred in the same year.

​

The increase was offset by decreases in rental income of $2.0 million from leases that expired in 2024 and 2025 at several properties.

​

Lease Termination Fees

​

In 2024, a consolidated joint venture in Lakewood, Colorado, in which we held a 90% interest, received a lease termination fee of $250,000 from a tenant due to the early termination of its lease in connection with the sale of the related restaurant parcel. We anticipate recognizing, during the quarter ending March 31, 2026, aggregate lease termination fees of approximately $1.3 million, and that in the aggregate, we will replace such tenancies on economic terms more favorable to us than those of the terminating tenancies.

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Operating Expenses

The following table compares operating expenses for the periods indicated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

Increase

​

​

(Dollars in thousands)

  ​ ​ ​

2025

  ​ ​ ​

2024

  ​ ​ ​

(Decrease)

  ​ ​ ​

% Change

Operating expenses:

​

  ​

​

  ​

​

  ​

  ​

Depreciation and amortization

​

$

27,196

​

$

24,291

​

$

2,905

12.0

Real estate expenses

​

19,878

​

17,904

​

1,974

11.0

General and administrative

​

16,267

​

15,388

​

879

5.7

Impairment losses

​

​

4,593

​

​

1,086

​

​

3,507

322.9

State tax expense

​

73

​

1

​

72

7,200.0

Total operating expenses

​

$

68,007

​

$

58,670

​

$

9,337

15.9

​

Depreciation and amortization. The increase is due primarily to:

​

-

$4.7 million of such expense from the properties acquired in 2025 and 2024 (including $970,000 from the three properties acquired in 2024), and

​

-

$415,000 of depreciation from improvements at several same store properties.

​

The increase was offset by:

​

-

the inclusion, in 2024, of $1.3 million of such expense from the properties sold since January 1, 2024, and

​

-

a decrease, in 2025, of $959,000 related to tenant origination costs at several same store properties that prior to December 31, 2025 were fully amortized.

​

Real estate expenses.

​

The increase is primarily due to:

​

-

$2.0 million from properties acquired in 2025 and 2024 (including $529,000 from the properties acquired in 2024), and

​

-

aggregate increases of $1.0 million of real estate expenses (i.e., real estate taxes, insurance and common area maintenance expenses) for several same store properties, none of which was individually significant.

​

The increase was offset primarily by a $1.1 million decrease related to properties sold in 2024 and 2025.

​

A substantial portion of real estate expenses (i.e., $16.6 million and $14.8 million in 2025 and 2024, respectively) are rebilled to tenants and are included in Rental income, net, on the consolidated statements of income.

​

General and administrative. The increase in 2025 is due primarily to increases of (i) non-cash expense of $371,000 from the re-assessment of the achievability of performance metrics related to the RSUs and (ii) $208,000 due to higher levels of compensation and compensation-related expense. The balance of the increase is due to various factors, none of which was individually significant.

​

Impairment losses. During 2025, we recorded an aggregate impairment loss of $4.6 million at our St. Louis Park, Minnesota and Beachwood, Ohio properties. During 2024, we recorded a $1.1 million impairment loss at our former Hamilton, Ohio property. (See Note 5 to our consolidated financial statements).

​

30

Table of Contents

Gain on sale of real estate, net

The following table lists the sold properties and related gains, net, for the periods indicated:

​

​

​

​

​

​

​

​

​

Year Ended

​

​

December 31, 

(Dollars in thousands)

​

2025

  ​ ​ ​

2024

Retail property - Bluffton, South Carolina

​

$

1,617

​

$

—

Retail property - Port Clinton, Ohio

​

​

225

​

​

—

Land - Beachwood, Ohio (a)

​

​

135

​

​

​

Vacant retail property - Bolingbrook, Illinois

​

​

489

​

​

—

Veterinary hospital - Newark, Delaware

​

​

3,236

​

​

—

Retail property - Eugene, Oregon

​

​

2,497

​

​

—

Land parcel - Lakewood, Colorado (b)

​

​

2,849

​

​

—

Retail property - Gurnee, Illinois

​

​

1,023

​

​

—

Retail property - Greensboro, North Carolina

​

​

2,232

​

​

—

Multi-tenant retail stores - Lakewood, Colorado (b)

​

​

3,276

​

​

—

Restaurant property - Concord, North Carolina

​

​

1,154

​

​

—

Land and improvements - Lakewood, Colorado (b)

​

​

(44)

​

​

—

Restaurant parcel - Lakewood, Colorado (b)

​

​

—

​

​

1,784

Restaurant property - Kennesaw, Georgia

​

​

—

​

​

964

Industrial property - Miamisburg, Ohio

​

​

—

​

​

1,507

Retail property - Wichita, Kansas

​

​

—

​

​

1,884

Retail property - Lawrence, Kansas

​

​

—

​

​

43

Retail property - Cape Girardeau, Missouri (c)

​

​

—

​

​

978

Vacant retail property - Kennesaw, Georgia

​

​

—

​

​

2,072

Vacant health and fitness property - Hamilton, Ohio (d)

​

​

—

​

​

17

Vacant industrial property - Wauconda, Illinois

​

​

—

​

​

1,177

Retail property - Woodbury, Minnesota

​

​

—

​

​

921

Retail property - Hilliard, Ohio

​

​

—

​

​

224

Health and fitness property - Secaucus, New Jersey

​

​

—

​

​

6,436

Total Gain on sale of real estate, net

​

$

18,689

​

$

18,007

(a)

The Company recognized a $1,300 impairment loss in connection with the sale of this property in 2025. See Note 5 to our consolidated financial statements.

​

(b)

A multi-tenant shopping center in Lakewood, Colorado, which was owned through a consolidated joint venture in which we held a 90% interest (the “Colorado JV”), sold off the property from 2023 through 2025. The non-controlling interest’s share of the net gains on sales in 2025 and 2024 were $1,609 and $178, respectively.

​

(c)

This property was owned through a consolidated joint venture in which we had a 95% interest. The non-controlling interest’s share of this gain was $105.

​

(d)

The Company recognized a $1,086 impairment loss in connection with the sale of this property in 2024. See Note 5 to our consolidated financial statements.

31

Table of Contents

Other Income and Expenses

​

The following table compares other income and expenses for the periods indicated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

Increase

​

​

(Dollars in thousands)

​

2025

  ​ ​ ​

2024

  ​ ​ ​

(Decrease)

  ​ ​ ​

% Change

Other income and expenses:

​

​

​

​

​

​

​

​

​

​

​

Equity in earnings of unconsolidated joint ventures

​

$

101

​

$

143

​

$

(42)

(29.4)

Equity in earnings from sale of unconsolidated joint venture properties

​

991

​

—

​

991

n/a

Income on settlement of litigation

​

​

1,300

​

​

—

​

​

1,300

n/a

Other income

​

609

​

1,186

​

(577)

(48.7)

Interest:

​

​

​

​

​

​

​

Expense

​

(22,798)

​

(19,463)

​

3,335

17.1

Amortization and write-off of deferred financing costs

​

(1,005)

​

(968)

​

37

3.8

​

Equity in earnings from sale of unconsolidated joint venture properties. The 2025 results reflect our 50% share of the gain on the sales of our two Savannah, Georgia joint venture properties which were sold in August 2025. (See Note 7 to our consolidated financial statements).

​

Income on settlement of litigation. During the quarter ended December 31, 2025, we received $1.3 million in connection with the settlement of a lawsuit at our former Beachwood, Ohio property. (See Note 13 to our consolidated financial statements).

​

Other income. The change in 2025 is due to a decrease of $478,000 in interest income primarily from the decrease in amounts available for investment in short-term U.S. treasury bills.

​

Interest expense. The following table compares interest expense for the periods indicated:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

Increase

​

​

(Dollars in thousands)

​

2025

  ​ ​ ​

2024

  ​ ​ ​

(Decrease)

  ​ ​ ​

% Change

Interest expense:

​

​

  ​

​

  ​

​

  ​

  ​

Mortgage interest

​

$

22,345

​

$

19,209

​

$

3,136

16.3

Credit line interest

​

​

453

​

​

254

​

​

199

78.3

Total

​

$

22,798

​

$

19,463

​

$

3,335

17.1

​

Mortgage interest

​

The following table reflects the weighted average interest rate on the weighted average principal amount of outstanding mortgage debt during the applicable year:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

​

Increase

​

​

(Dollars in thousands)

​

2025

  ​ ​ ​

2024

  ​ ​ ​

(Decrease)

  ​ ​ ​

% Change

Weighted average principal amount

​

$

466,825

​

$

426,916

​

$

39,909

9.3

Weighted average interest rate

​

​

4.75

%  

​

4.47

%  

​

0.28

%  

6.3

​

The increase in 2025 is due primarily to the increases in the weighted average principal amount of mortgage debt outstanding and weighted average interest rate. Among other things, the mortgages (i) that we refinanced generally bore a higher interest rate than the mortgages we paid off and (ii) obtained in connection with acquisitions generally bore a higher rate of interest than the mortgages on properties we sold.

​

We estimate that after giving effect to the Portfolio Acquisition, that mortgage interest expense in 2026 will be approximately $25.9 million.

​

32

Table of Contents

Credit facility interest

​

During 2025, the weighted average interest rate was 6.07% and the weighted average principal amount outstanding was $3.4 million.

​

We estimate that after giving effects to the Portfolio Acquisition, that in 2026, interest expense on our credit facility will be approximately $1.7 million (assuming an interest rate of 5.45% as of January 29, 2026 and that there are no paydowns or drawdowns on the facility).

​

During 2024, there was no balance outstanding and the interest expense of $254,000 constitutes the unused facility fee.

Funds from Operations and Adjusted Funds from Operations

We compute funds from operations, or FFO, in accordance with the “White Paper on Funds From Operations” issued by the National Association of Real Estate Investment Trusts (“NAREIT”) and NAREIT’s related guidance. FFO is defined in the White Paper as net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, impairment write-downs of certain real estate assets and investments in entities where the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. In computing FFO, we do not add back to net income the amortization of costs in connection with our financing activities or depreciation of non-real estate assets.

We compute adjusted funds from operations, or AFFO, by adjusting FFO for straight-line rent accruals and amortization of lease intangibles, deducting from income (i) additional rent from a ground lease tenant, (ii) income on settlement of litigation, (iii) income on insurance recoveries from casualties, (iv) lease termination and assignment fees, and adding back to income (i) amortization of restricted stock and restricted stock unit compensation expense, (ii) amortization of costs in connection with its financing activities (including its share of its unconsolidated joint ventures), (iii) debt prepayment costs, (iv) amortization of lease incentives and (v) mortgage intangible assets. Since the NAREIT White Paper does not provide guidelines for computing AFFO, the computation of AFFO varies from one REIT to another.

We believe that FFO and AFFO are useful and standard supplemental measures of the operating performance for equity REITs and are used frequently by securities analysts, investors and other interested parties in evaluating equity REITs, many of which present FFO and AFFO when reporting their operating results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate assets, which assumes that the value of real estate assets diminish predictably over time. In fact, real estate values have historically risen and fallen with market conditions. As a result, we believe that FFO and AFFO provide a performance measure that when compared year over year, should reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, interest costs and other matters without the inclusion of depreciation and amortization, providing a perspective that may not be necessarily apparent from net income. We also consider FFO and AFFO to be useful in evaluating potential property acquisitions.

FFO and AFFO do not represent net income or cash flows from operating, investing or financing activities as defined by GAAP. FFO and AFFO should not be considered to be an alternative to net income as a reliable measure of our operating performance; nor an alternative to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity. FFO and AFFO do not measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization, capital improvements and distributions to stockholders.

Management recognizes that there are limitations in the use of FFO and AFFO. In evaluating our performance, management is careful to examine GAAP measures such as net income and cash flows from operating, investing and financing activities.

33

Table of Contents

The following tables provide a reconciliation of net income and net income per common share (on a diluted basis) in accordance with GAAP to FFO and AFFO for the years indicated (dollars in thousands, except per share amounts):

​

​

​

​

​

​

​

​

​

Year Ended

​

December 31, 

​

2025

  ​ ​ ​

2024

GAAP net income attributable to One Liberty Properties, Inc.

​

$

25,474

​

$

30,417

Add: depreciation and amortization of properties

​

​

26,354

​

​

23,495

Add: our share of depreciation and amortization of unconsolidated joint ventures

​

​

18

​

​

22

Add: impairment losses

​

​

4,593

​

​

1,086

Add: amortization of deferred leasing costs

​

​

842

​

​

796

Add: our share of amortization of deferred leasing costs of unconsolidated joint ventures

​

​

3

​

​

12

Deduct: gain on sale of real estate, net

​

(18,689)

​

(18,007)

Deduct: equity in earnings from sale of unconsolidated joint venture properties

​

(991)

​

—

Adjustments for non-controlling interests

​

​

1,567

​

​

206

NAREIT funds from operations applicable to common stock

​

39,171

​

38,027

Deduct: straight-line rent accruals and amortization of lease intangibles

​

​

(2,675)

​

​

(2,745)

Adjust: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures

​

​

(32)

​

​

19

Deduct: other income and income on settlement of litigation

​

​

(1,410)

​

​

(110)

Deduct: lease termination fees

​

​

(66)

​

​

(250)

Add: amortization of restricted stock and RSU compensation

​

5,333

​

​

4,962

Add: amortization and write-off of deferred financing costs

​

1,005

​

​

968

Add: amortization of lease incentives

​

​

107

​

​

119

Add: amortization of mortgage intangible assets

​

​

137

​

​

137

Adjustments for non-controlling interests

​

​

(14)

​

​

30

Adjusted funds from operations applicable to common stock

​

$

41,556

​

$

41,157

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended

​

​

December 31, 

​

​

2025

  ​ ​ ​

2024

GAAP net income attributable to One Liberty Properties, Inc.

​

$

1.15

​

$

1.40

Add: depreciation and amortization of properties

​

​

1.23

​

​

1.10

Add: our share of depreciation and amortization of unconsolidated joint ventures

​

​

—

​

​

—

Add: impairment losses

​

​

.21

​

​

.05

Add: amortization of deferred leasing costs

​

​

.04

​

​

.04

Add: our share of amortization of deferred leasing costs of unconsolidated joint ventures

​

​

—

​

​

—

Deduct: gain on sale of real estate, net

​

​

(.86)

​

​

(.84)

Deduct: equity in earnings from sale of unconsolidated joint venture properties

​

​

(.05)

​

​

—

Adjustments for non-controlling interests

​

​

.08

​

​

.02

NAREIT funds from operations per share of common stock (a)

​

1.80

​

1.77

Deduct: straight-line rent accruals and amortization of lease intangibles

​

​

(.13)

​

​

(.13)

Adjust: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures

​

​

—

​

​

—

Deduct: lease termination fees

​

​

—

​

​

(.01)

Deduct: other income and income on settlement of litigation

​

​

(.06)

​

​

(.01)

Add: amortization of restricted stock and RSU compensation

​

​

.24

​

​

.23

Add: amortization and write-off of deferred financing costs

​

​

.05

​

​

.04

Add: amortization of lease incentives

​

​

—

​

​

.01

Add: amortization of mortgage intangible assets

​

​

.01

​

​

.01

Adjustments for non-controlling interests

​

​

—

​

​

—

Adjusted funds from operations per share of common stock (a)

​

$

1.91

​

$

1.91

(a) The weighted average number of diluted common shares used to compute FFO and AFFO applicable to common stock includes unvested restricted shares that are excluded from the computation of diluted EPS.

​

​

34

Table of Contents

The $1.1 million, or 3.0%, net increase in FFO is due primarily to:

●

$6.8 million increase in rental income, net, and

●

$1.3 million proceeds from a litigation settlement.

Offsetting the increase is a:

●

$3.3 million increase in interest expense,

●

$2.0 million increase in real estate operating expenses,

●

$879,000 increase in general and administrative expenses,

●

$577,000 decrease in other income, and

●

$184,000 decrease in lease termination fee income.

See “—Comparison of Years Ended December 31, 2025 and 2024” for further information regarding these changes.

​

​

The $399,000, or 1.0%, net increase in AFFO is primarily due to the factors impacting FFO as described immediately above, including a $371,000 decrease (to $508,000) in general and administrative expenses due to the exclusion of the amortization of restricted stock and RSU compensation and excluding the (i) $1.3 million proceeds from a litigation settlement and (ii) $184,000 decrease in lease termination fee income.

​

See “—Comparison of Years Ended December 31, 2025 and 2024” for further information regarding these changes.

​

Comparison of Years Ended December 31, 2024 and 2023

As we qualify as a smaller reporting company, this comparison is omitted in accordance with Instruction 1 to Item 303(a) of Regulation S-K.

35

Table of Contents

Liquidity and Capital Resources

​

Our sources of liquidity and capital include cash flow from operations, cash and cash equivalents, borrowings under our credit facility, refinancing existing mortgage loans, obtaining mortgage loans secured by our unencumbered properties, issuance of our equity securities and property sales. In 2025, we obtained approximately (i) $61.3 million of net proceeds from property sales (after giving effect to $7.5 million of mortgage debt repayments) and (ii) $129.0 million of proceeds from mortgage financings (after giving effect to $3.8 million of refinanced amounts). Our available liquidity at February 27, 2026 was approximately $78.5 million, including approximately $8.5 million of cash and cash equivalents (including the credit facility’s required $3.0 million average deposit maintenance balance) and, subject to borrowing base requirements, up to $70.0 million available under our credit facility.

Liquidity and Financing

​

We expect to meet our short-term (i.e., one year or less) and long-term (i) operating cash requirements (including debt service and anticipated dividend payments) principally from cash flow from operations, our available cash and cash equivalents, proceeds from and, to the extent permitted and needed, our credit facility and (ii) investing and financing cash requirements (including an estimated aggregate of $2.7 million of capital expenditures) from the foregoing, as well as property financings, property sales and sales of our common stock.

​

The following table sets forth, as of December 31, 2025, information with respect to our mortgage debt that is payable from January 2026 through December 31, 2028:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(Dollars in thousands)

  ​ ​ ​

​

2026

  ​ ​ ​

2027

  ​ ​ ​

2028

  ​ ​ ​

Total

Amortization payments

​

​

$

11,108

​

$

10,151

​

$

9,516

​

$

30,775

Principal due at maturity

​

​

17,767

​

38,525

​

30,155

​

86,447

Total

​

​

$

28,875

​

$

48,676

​

$

39,671

​

$

117,222

​

We intend to make debt amortization payments from operating cash flow and, though no assurance can be given that we will be successful in this regard, generally intend to refinance, extend or payoff the mortgage loans which mature in 2026 through 2028. We intend to repay the amounts not refinanced or extended from our existing funds and sources of funds, including our available cash, proceeds from one or more property sales, the sale of our common stock and our credit facility (to the extent available).

​

We continually seek to refinance existing mortgage loans on terms we deem acceptable to generate additional liquidity. Additionally, in the normal course of our business, we sell properties when we determine that it is in our best interests, which also generates additional liquidity. Further, although we have done so infrequently and primarily in the context of a tenant default at a property for which we have not found a replacement tenant, if we believe we have negative equity in a property subject to a non-recourse mortgage loan, we may convey such property to the mortgagee to terminate our mortgage obligations, including payment of interest, principal and real estate taxes, with respect to such property.

​

Typically, we utilize funds from our credit facility to acquire a property and, thereafter secure long-term, fixed rate mortgage debt on such property. We apply the proceeds from the mortgage loan to repay borrowings under the credit facility, thus providing us with the ability to re-borrow under the credit facility for the acquisition of additional properties.

36

Table of Contents

Material Contractual Obligations

​

The following sets forth our material contractual obligations as of December 31, 2025:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Payment due by period

​

  ​ ​ ​

Less than

  ​ ​ ​

​

​

  ​ ​ ​

​

​

  ​ ​ ​

More than

  ​ ​ ​

​

​

(Dollars in thousands)

​

1 Year

​

1 ‑ 3 Years

​

4 ‑ 5 Years

​

5 Years

​

Total

Mortgages payable—interest and amortization

​

$

35,941

​

$

64,682

​

$

48,432

​

$

65,932

​

$

214,987

Mortgages payable—balances due at maturity

​

17,767

​

68,680

​

150,815

​

215,245

​

452,507

Credit facility (a)

​

—

​

—

​

—

​

​

—

​

—

Purchase obligations (b)

​

4,806

​

9,616

​

9,229

​

55

​

23,706

Total

​

$

58,514

​

$

142,978

​

$

208,476

​

$

281,232

​

$

691,200

(a)

At December 31, 2025, there was no balance outstanding on the credit facility and at February 27, 2026, $30,000 was outstanding on the credit facility. We anticipate paying down the facility in the next twelve months from the net proceeds of property sales and mortgage financings on two properties acquired in the Portfolio Acquisition. At December 31, 2025 and February 27, 2026, after giving effect to the facility’s borrowing base requirements, $100,000 and $70,000, respectively, was available to be borrowed. See “—Credit Facility”.

(b)

Assumes that approximately $4,170 will be payable annually during the next five years pursuant to the compensation and services agreement. Excludes (i) approximately $2,700 of capital expenditures to be incurred in the ordinary course of business in connection with tenant improvements, (ii) amounts required to acquire properties, (iii) subject to Board approval, $195,000 of dividend payments anticipated to be paid through December 31, 2030 (assuming no changes in the number of shares of common stock outstanding and the dividend rate from December 31, 2025).

As of December 31, 2025, we had $522.5 million of mortgage debt outstanding, all of which is non-recourse (subject to standard carve-outs). We expect that mortgage interest and amortization payments (excluding repayments of principal at maturity) of approximately $100.6 million due through 2028 will be paid primarily from cash generated from our operations. We anticipate that principal balances due at maturity through 2028 of $86.4 million will be paid primarily from cash and cash equivalents and mortgage financings and refinancings. If we are unsuccessful in refinancing our existing indebtedness or financing our unencumbered properties, our cash flow, funds available under our credit facility and available cash, if any, may not be sufficient to repay all debt obligations when payments become due, and we may need to issue additional equity, obtain long or short-term debt, or dispose of properties on unfavorable terms.

​

Credit Facility

​

Our credit facility provides that subject to borrowing base requirements, we can borrow up to $100.0 million for the acquisition of commercial real estate, repayment of mortgage debt, and renovation and operating expense purposes; provided, that if used for renovation and operating expense purposes, the amount outstanding for such purposes will not exceed the lesser of $40.0 million and 40% of the borrowing base. See “—Liquidity and Capital Resources”. The facility matures December 31, 2026 and we anticipate that it will be renewed prior thereto. The facility bears interest equal to 30-day SOFR plus the applicable margin. The applicable margin ranges from 175 basis points if our ratio of total debt to total value (as calculated pursuant to the facility) is equal to or less than 50%, increasing to a maximum of 275 basis points if such ratio is greater than 60%. The applicable margin was 175 basis points for each of 2025 and 2024. There is an unused facility fee of 0.25% per annum on the difference between the outstanding loan balance and $100.0 million. The credit facility requires the maintenance of $3.0 million in average deposit balances. For 2025, the weighted average interest rate on the facility was approximately 6.07% and as of February 27, 2026, the rate on the facility was 5.42%.

​

The terms of our credit facility include certain restrictions and covenants which may limit, among other things, the incurrence of liens, and which require compliance with financial ratios relating to, among other things, the minimum amount of tangible net worth, the minimum amount of debt service coverage, the minimum amount of fixed charge coverage, the maximum amount of debt to value, the minimum level of net income, certain investment limitations and the minimum value of unencumbered properties and the number of such properties. Net proceeds received from the sale, financing or refinancing of properties are generally required to be used to repay amounts outstanding under our credit facility.

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Inflation

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We are exposed to inflation risk as income from long-term leases is the primary source of our cash flows from operations. Many of our leases contain provisions, including provisions providing for periodic fixed rate rent increases), intended to mitigate the impact of inflation. In addition, many of our leases require the tenant to pay, or reimburse us for our payment of, all or a majority of the property’s operating expenses, including real estate taxes, utilities, insurance and building repairs, which may also mitigate our risks associated with rising costs. However, these rent escalation or reimbursement provisions may not adequately offset the effects of inflation.

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Inflation will also affect the overall cost of our floating rate debt (i.e., primarily debt incurred pursuant to our credit facility) and affects the mortgage debt we may incur in the future. (The interest rate risk associated with substantially all of our current mortgage debt is generally mitigated through long-term fixed interest rate loans). Increasing interest rates on acquisition mortgage debt limits the acquisition opportunities we can pursue and reduces the prices at which we sell our properties.

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Distribution Policy

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We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. Accordingly, to qualify as a REIT, we must, among other things, meet a number of organizational and operational requirements, including a requirement that we distribute currently at least 90% of our ordinary taxable income to our stockholders. It is our current intention to comply with these requirements and maintain our REIT status. As a REIT, we generally will not be subject to corporate federal, state or local income taxes on taxable income we distribute currently (in accordance with the Internal Revenue Code and applicable regulations) to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal, state and local income taxes at regular corporate rates and may not be able to qualify as a REIT for four subsequent tax years. Although we qualify for federal taxation as a REIT, we are subject to certain state and local taxes on our income and to federal income taxes on our undistributed taxable income (i.e., taxable income not distributed in the amounts and in the time frames prescribed by the Internal Revenue Code and applicable regulations thereunder) and are subject to Federal excise taxes on our undistributed taxable income.

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It is our current intention to pay to our stockholders within the time periods prescribed by the Internal Revenue Code no less than 90%, and, if possible, 100% of our annual taxable income, including taxable gains from the sale of real estate. It will continue to be our policy to make sufficient distributions to stockholders in order for us to maintain our REIT status under the Internal Revenue Code.

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Our board of directors will continue to evaluate, on a quarterly basis, the amount and nature (i.e., cash, stock or a combination of the foregoing) of dividend payments based on its assessment of, among other things, our short and long-term cash and liquidity requirements, prospects, debt maturities, maintenance of our REIT status, projections of our REIT taxable income, net income, funds from operations and adjusted funds from operations.

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Critical Accounting Estimates

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Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we reconsider and evaluate our estimates and assumptions.

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We base our estimates on historical experience, current trends and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could materially differ from any of our estimates under different assumptions or conditions. Our significant accounting policies are discussed in Note 2 of our consolidated financial statements in this report. We believe the accounting estimates listed below are the most critical to aid in fully understanding and evaluating our reported financial results, and they require our most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain.

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Revenue Recognition

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Our main source of revenue is rental income from our tenants. Rental income primarily includes: (i) base rents that our tenants pay in accordance with the terms of their respective leases reported on a straight-line basis over the non-cancellable term of each lease and (ii) reimbursements by tenants of certain real estate operating expenses. Since many of our leases provide for rental increases at specified intervals, straight-line basis accounting requires us to record as an asset and include in revenues, unbilled rent receivables which we will only receive if the tenant makes all rent payments required through the expiration of the term of the lease. Accordingly, our management must determine, in its judgment, that the unbilled rent receivable applicable to each specific tenant is collectable. We review unbilled rent receivables on a quarterly basis and take into consideration, among other things, the tenant’s payment history and the financial condition of the tenant. In the event that the collectability of an unbilled rent receivable is unlikely, we are required to write-off the receivable, which has an adverse effect on net income for the year in which the direct write-off is taken, and will decrease total assets and stockholders’ equity.

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Purchase Accounting for Acquisition of Real Estate

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The fair value of real estate acquired is allocated to acquired tangible assets (which includes land, building and building improvements) and identified intangible assets and liabilities (which include the value of above, below and at-market leases, origination costs associated with in-place leases and above and below-market mortgages assumed) based in each case on their relative fair values. The fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to land, building and building improvements based on our determination of the relative fair values of these assets. We assess the fair value of the lease intangibles and assumed mortgages based on estimated cash flow projections that utilize appropriate discount rates and available market information. The fair values associated with below-market rental renewal options are determined based on our experience and the relevant facts and circumstances that existed at the time of the acquisitions. The portion of the values of the leases associated with below-market renewal options that we deem reasonably certain to be exercised by the tenant are amortized to rental income over the respective renewal periods. The allocation made by us may have a positive or negative effect on net income and may have an effect on the assets and liabilities on the balance sheet.

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Carrying Value of Real Estate Portfolio

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We review our real estate portfolio on a quarterly basis to ascertain if there are any indicators of impairment to the value of any of our real estate assets, including deferred costs and intangibles, to determine if there is any need for an impairment charge. In reviewing the portfolio, we examine, among other things, the type of asset, the current financial statements or other available financial information of the tenant, the economic situation in the area in which the asset is located, the economic situation in the industry in which the tenant is involved and the timeliness of the payments made by the tenant under its lease, as well as any current correspondence that may have been had with the tenant, including property inspection reports. For each real estate asset owned for which indicators of impairment exist, we perform a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the asset to its carrying amount. Management’s assumptions and estimates include projected rental rates during the holding period and property capitalization rates in order to estimate undiscounted future cash flows. If the undiscounted cash flows are less than the asset’s carrying amount, an impairment loss is recorded to the extent that the estimated fair value is less than the asset’s carrying amount. The estimated fair value is determined using a discounted cash flow model of the expected future cash flows through the useful life of the property. Real estate assets that are expected to be disposed of are valued at the lower of carrying amount or fair value less costs to sell on an individual asset basis. We generally do not obtain any independent appraisals in determining value but rely on our own analysis and valuations. Any impairment charge taken with respect to any part of our real estate portfolio will reduce our net income and reduce assets and stockholders’ equity to the extent of the amount of any impairment charge, but it will not affect our cash flow or our distributions until such time as we dispose of the property.

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Equity-Based Compensation

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We grant shares of restricted stock and restricted stock units (“RSUs”) to eligible plan participants, subject to the recipient’s continued service over a specified period and, with respect to the RSUs, the satisfaction of specified conditions over a specified period. The RSUs vest based upon satisfaction of specified metrics with respect to the (i) average of our annual total stockholder return (“TSR Awards”) and/or (ii) average annual return of capital (“ROC Awards”), in each case as calculated pursuant to the applicable award agreement. We account for the restricted stock awards and RSUs in accordance with ASC 718, Compensation - Stock Compensation, which requires that such compensation be recognized in the financial statements based on its estimated grant date fair value. The value of such awards is recognized as compensation expense in general and administrative expenses in the accompanying consolidated statements of operations over the applicable service periods. Grant date fair value is determined with respect to the (i) restricted stock awards, by the closing stock price on the date of grant, (ii) TSR Awards, by using a Monte Carlo simulation relying upon various assumptions and (iii) ROC Awards, by the closing stock price on the date of grant, subject to quarterly adjustment based upon management’s projections as to the achievability of the specified metrics related to the ROC Awards (the “ROC Metrics”). There is substantial subjectivity in (i) the inputs selected for the Monte Carlo simulation used in determining the grant date fair value of the TSR Awards and the use of different inputs would change the expense we recognize with respect to such awards and (ii) management’s projections as to the achievability of the ROC Metrics and changes in such projections will cause fluctuations in our results of operations. See Note 10 to our consolidated financial statements.

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