ONE LIBERTY PROPERTIES INC
For the period ended Sep 30, 2024. Filed Nov 6, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 6, 2024
OLP$21.11+1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-07.
0001558370-24-011278
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0001558370-24-014590
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 96 current paragraphs.
56 unchanged; 29 reworded; 10 added; 16 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 61 previous and 65 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Acquisition during the three months ended September 30, 2024
Current report
These properties contributed the following during the periods indicated (amounts in thousands):
Current report
Transactions subsequent to September 30, 2024
Current report
In October and November 2024, we signed contracts to sell the following properties (amounts in thousands):
Current report
These properties contributed the following during the periods indicated (amounts in thousands):
Current report
In November 2024, we exercised our right to terminate the contract to acquire, for $28.3 million, a 236,324 square foot property in Council Bluffs, Iowa, and our $500,000 deposit was returned. Although we continue to evaluate such acquisition, we can provide no assurance that such transaction will be completed.
Current report
Real estate expenses. The increases in the three and nine months ended September 30, 2024 are due primarily to (i) $104,000 and $176,000, respectively, of real estate expenses primarily related to insurance expense for several properties, none of which were individually significant, and (ii) in the nine months ended September 30, 2024, $318,000 from four properties acquired since January 1, 2023.
Current report
*Equity in (loss) earnings of unconsolidated joint ventures.*The three and nine months ended September 30, 2023 include our 50% share of an impairment charge, or $850,000, related to our former Manahawkin, New Jersey joint venture property which was sold in December 2023.
Current report
Off-Balance Sheet Financing Arrangement
Current report
Nine months ended September 30, 2024 and 2023
Removed paragraphs (16)
Previous report
Included in contractual rental income is $162,000 representingthe base rent payable by Dick’s Sporting Goods (Champaign, Illinois) in the twelve months ending June 30, 2025, although such lease is subject to termination by the landlord or tenant upon 90 days’ notice.
Previous report
Completed Acquisitions during the three months ended June 30, 2024
Previous report
Acquisition Contracts
Previous report
On June 13, 2024, we entered into a contract to acquire a 302,347 square foot, multi-tenant industrial property located in Council Bluffs, Iowa for $33.0 million (“Council Bluffs I”). In connection with the acquisition, we anticipate obtaining new mortgage debt of approximately $18.4 million bearing an interest rate of 6.08% (interest only until 2029) and maturing in 2034. We anticipate paying the balance of the purchase price from our available cash. We estimate the annual base rent will be approximately $2.1 million (with annual base rent increases ranging from 1.90% to 3.25%) and anticipate the closing will occur during the three months ending September 30, 2024.
Previous report
On August 1, 2024, we entered into a contract, subject to our right to terminate, to acquire a 236,324 square foot, multi-tenant industrial property located in Council Bluffs, Iowa for $28.3 million (“Council Bluffs II”; and together with Council Bluffs I, the “Council Bluffs Acquisitions”). In connection with this acquisition, we anticipate obtaining new mortgage debt of approximately $17.0 million bearing an interest rate of 5.89% (interest only until 2029) and maturing in 2034. We anticipate paying the balance of the purchase price from our available cash. We estimate the annual base rent will be approximately $1.9 million (with annual base rent increases ranging from 3.00% to 3.25%) and anticipate the closing will occur during September or October 2024.
Previous report
Generally, we sold these properties due to our belief that such property had achieved its maximum potential value; our concern with respect to the long-term prospects for the tenant or the geographic sub-market; or due to concern in our ability, on acceptable terms, to refinance the property’s mortgage debt or re-lease the property. A significant portion of the net proceeds of these sales have been invested in short-term U.S. treasury bills. We may during the balance of 2024, sell several more properties, including some retail properties.
Previous report
Sales Contracts and Impairment Loss
Previous report
On July 1, 2024, we entered into a contract to sell our vacant industrial property in Wauconda, Illinois for $4.5 million. This property was formerly tenanted by Echo, Inc. whose lease expired in January 2024. This property contributed $430,000 of rental income, net, and $298,000 of operating expenses (including depreciation and amortization expense of $168,000), during the year ended December 31, 2023. We anticipate that, subject to the buyer’s right to terminate this contract, this transaction will be completed by September 30, 2024 and estimate that we will recognize a gain on sale of real estate, net, of approximately $1.2 million on the consolidated statement of income during the three months ending September 30, 2024.
Previous report
On July 11, 2024, we entered into a contract to sell our health and fitness property in Hamilton, Ohio for $4.4 million. This property was formerly tenanted by LA Fitness whose lease expired in May 2024. In connection with the proposed sale, we recorded an impairment charge of $1.1 million during the three and six months ended June 30, 2024. This property contributed $893,000 of rental income, net, $394,000 of operating expenses (including depreciation and amortization expense of $206,000) and $198,000 of mortgage interest expense during the year ended December 31, 2023. We anticipate that, subject to the buyer’s right to terminate this contract, this property will be sold at a nominal gain during the three months ending September 30, 2024.
Previous report
Equity Incentive Program Activity
Previous report
On July 16, 2024, we awarded an aggregate of 88,250 shares subject to restricted stock units (“RSUs”), and related dividend equivalent rights. Generally, the awards vest in 2027 subject to satisfaction of, among other things, market and performance conditions similar to the conditions applicable to the RSUs granted in 2023 and 2022.
Previous report
On August 6, 2024, we determined that the performance and market conditions with respect to the vesting of 39,811 of the 80,700 RSUs granted in 2021 had been met as of June 30, 2024, and authorized the issuance of 39,811 shares of common stock. We anticipate paying the holders of the RSUs an aggregate of approximately $215,000 with respect to the dividend equivalent rights with respect to the vested shares.
Previous report
Real estate expenses. The increase in the six months ended June 30, 2024 is due primarily to $229,000 from a property acquired in 2023.
Previous report
We intend to make debt amortization payments from operating cash flow and, although no assurance can be given that we will be successful in this regard, generally intend to refinance, extend or pay off the mortgage loans which mature from 2024 through 2027. In particular, during the quarter ending September 30, 2024, we anticipate paying off approximately $9 million to $11 million of mortgages maturing in 2024 (of which we anticipate approximately $6 million will be paid from the proceeds on the sale of the related properties). We anticipate that during the quarter ending September 30, 2024, we will obtain gross proceeds of between $21 million and $26 million from property financings (net of refinanced amounts ranging from $9 million to $12 million, respectively). On such debt, we expect the weighted average interest rate to range from 6.11% to 6.13% and the weighted average remaining term to maturity to range from five years to six years.
Previous report
Other Financing Sources and Arrangements
Previous report
Six months ended June 30, 2024 and 2023
Reworded paragraphs (29)
Previous wording
As more fully described in our Annual Report, and in particular, the sections thereof entitled “Risk Factors” and*“Management’s Discussion and Analysis of Financial Condition and Results of Operations”, we face challenges due to the volatile economic environment, and certain of our properties and tenants face various challenges. Our cash flow and profitability will be adversely impacted if the issues with respect to the challenged tenants/properties identified in the Annual Report are not resolved in a satisfactory manner. There have been no material changes to the status of such tenants/ properties other than with respect to our Hamilton, Ohio property formerly tenanted by LA Fitness– see “–Sales Contract and Impairment Loss*” below.
Current wording
As more fully described in our Annual Report, and in particular, the sections thereof entitled “Risk Factors” and*“Management’s Discussion and Analysis of Financial Condition and Results of Operations”, we face challenges due to the volatile economic environment, and certain of our properties and tenants face various challenges. Our cash flow and profitability will be adversely impacted if the issues with respect to the challenged tenants/properties identified in the Annual Report are not resolved in a satisfactory manner. There have been no material changes to the status of such tenants/ properties other than with respect to the sale of our Hamilton, Ohio property (see “–Property Transactions – Sales during the three months ended September 30, 2024*”).
Previous wording
We acquire, own and manage a geographically diversified portfolio consisting primarily of industrial and, to a lesser extent, retail properties, many of which are subject to long-term net leases. As of June 30, 2024, we own 106 properties (including two properties owned by consolidated joint ventures and two properties owned by unconsolidated joint ventures) located in 31 states. Based on square footage, our occupancy rate at June 30, 2024 is approximately 98.2%.
Current wording
We acquire, own and manage a geographically diversified portfolio consisting primarily of industrial and, to a lesser extent, retail properties, many of which are subject to long-term net leases. As of September 30, 2024, we own 104 properties (including two properties owned by consolidated joint ventures and two properties owned by unconsolidated joint ventures) located in 31 states. Based on square footage, our occupancy rate at September 30, 2024 is approximately 99.1%.
Previous wording
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 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
Current wording
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 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
Previous wording
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 ofthe net proceeds to us from such property sale.
Current wording
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 ofthe net proceeds to us from such property sale.
Previous wording
Our 2024 contractual base rent is approximately $70.9 million and represents, after giving effect to any abatements, concessions, deferrals or adjustments, the base rent payable to us during the twelve months ending June 30, 2025 under leases in effect at June 30, 2024.
Current wording
Our 2024 contractual base rent is approximately $73.1 million and represents, after giving effect to any abatements, concessions, deferrals or adjustments, the base rent payable to us during the twelve months ending September 30, 2025 under leases in effect at September 30, 2024.
Previous wording
Excluded from contractual rental income is an aggregate of $1.5 million comprised of:
Current wording
Excluded from contractual rental income is an aggregate of $1.4 million comprised of (i) $1.3 million, subject to the property generating specified levels of positive operating cash flow, of estimated variable lease payments from The Vue, a multi-family complex which ground leases the underlying land from us and as to which there is uncertainty as to when and whether the tenant will resume paying rent, and (ii) $148,000 representing our share of the base rent payable to our joint ventures.
Previous wording
We acquired industrial properties in Albuquerque, New Mexico and Savannah, Georgia for an aggregate purchase price of $11.7 million, incurred $108,000 of transaction costs that were capitalized and subsequently obtained new mortgage debt in the aggregate of $6.2 million bearing an interest rate of 6.00% and maturing between 2032 and 2035 (see Note 4 to our consolidated financial statements). These properties contributed $160,000 of rental income, net, $76,000 of operating expenses (including depreciation and amortization expense of $71,000) and $25,000 of mortgage interest expense. We estimate that commencing July 1, 2024, the aggregate quarterly rental income (excluding variable lease revenues), depreciation and amortization expense and mortgage interest expense from these properties will be $252,000, $103,000 and $93,000, respectively.
Current wording
On August 19, 2024, we acquired an industrial property in Council Bluffs, Iowa for $33.0 million, incurred $79,000 of transaction costs that were capitalized and simultaneously obtained new mortgage debt of $18.4 million bearing an interest rate of 6.08% (interest only until 2029) and maturing in 2034 (see Note 4 to our consolidated financial statements). This property contributed $322,000 of rental income, net, $188,000 of operating expenses (including depreciation and amortization expense of $161,000) and $134,000 of mortgage interest expense. We estimate that commencing October 1, 2024, the quarterly rental income (excluding variable lease revenues), depreciation and amortization expense and mortgage interest expense from this property will be $623,000, $332,000 and $280,000, respectively.
Previous wording
Completed Sales during the three months ended June 30, 2024
Current wording
Sales during the three months ended September 30, 2024
Previous wording
The changes in same store rental income during the three and six months ended June 30, 2024 are due primarily to decreases of:
Current wording
The changes in same store rental income during the three and nine months ended September 30, 2024 are due primarily to increases of:
Previous wording
The decreases were offset during the three and six months ended June 30, 2024 by increases in rental income of:
Current wording
The increases were offset during the three and nine months ended September 30, 2024 by decreases in rental income of:
Previous wording
Depreciation and amortization. The decreases in the three and six months ended June 30, 2024 are due primarily to (i) decreases of $367,000 and $723,000, respectively, related to tenant origination costs at several properties that prior to June 30, 2024 were fully amortized, and (ii) the inclusion in the corresponding 2023 periods of $253,000 and $412,000, respectively, of such expense from the properties sold since January 1, 2023.
Current wording
Depreciation and amortization. The decreases in the three and nine months ended September 30, 2024 are due primarily to (i) the inclusion in the corresponding 2023 periods of $362,000 and $858,000, respectively, of such expense from the properties sold since January 1, 2023, and (ii) decreases of $293,000 and $942,000, respectively, related to tenant origination costs at several properties that prior to September 30, 2024 were fully amortized.
Previous wording
The decreases were offset by (i) $291,000 and $511,000, respectively, of such expense from three properties acquired since January 1, 2023, and (ii) $118,000 and $247,000, respectively, of depreciation from improvements at several properties.
Current wording
The decreases were offset by (i) $293,000 and $804,000, respectively, of such expense from four properties acquired since January 1, 2023, and (ii) $151,000 and $396,000, respectively, of depreciation from improvements at several properties. In addition, the nine months ended September 30, 2024 includes $112,000 of amortization of leasing commissions at several properties.
Previous wording
General and administrative. The decreases in the three and six months ended June 30, 2024 are due primarily to decreases in non-cash compensation expense due to (i) the inclusion of $233,000 in the corresponding 2023 periods from the retirement, and related accelerated vesting, of an executive officer’s restricted stock awards, and (ii) decreases of $140,000 and $138,000, respectively, from the re-assessment of the achievability of performance metrics related to the RSUs.
Current wording
General and administrative. The decrease in the nine months ended September 30, 2024 is due primarily to decreases (i) in non-cash compensation expense due primarily to the inclusion of $233,000 in the corresponding 2023 period from the retirement, and related accelerated vesting, of an executive officer’s restricted stock awards, and (ii) of $165,000 in litigation related professional fees.
Previous wording
Impairment loss. During the three and six months ended June 30, 2024, we recorded a $1.1 million impairment loss at our Hamilton, Ohio property formerly tenanted by LA Fitness. (See Note 5 to our consolidated financial statements).
Current wording
Impairment loss. During the nine months ended September 30, 2024, we recorded a $1.1 million impairment loss at our former Hamilton, Ohio property tenanted by LA Fitness. (See Note 5 to our consolidated financial statements).
Previous wording
Other Income. The increases in the three and six months ended June 30, 2024 are due to increases of $113,000 and $305,000, respectively, in interest income from investments in short-term U.S. treasury bills. The balance of the increase is due to various factors, none of which was individually significant.
Current wording
Other Income. The increases in the three and nine months ended September 30, 2024 are due to increases of $325,000 and $722,000, respectively, in interest income primarily from investments in short-term U.S. treasury bills.
Previous wording
The increases in mortgage interest in the three and six months ended June 30, 2024 are due primarily to increases in the average principal amount of mortgage debt outstanding as a result of financings and refinancings, offset by mortgage payoffs (generally in connection with scheduled maturities) and scheduled amortization payments.
Current wording
The increases in mortgage interest in the three and nine months ended September 30, 2024 are due primarily to increases in the weighted average interest rate on the principal amount of mortgage debt outstanding as a result of financings and refinancings, offset by mortgage payoffs (generally in connection with scheduled maturities) and scheduled amortization payments.
Previous wording
The decreases in credit line interest in the three and six months ended June 30, 2024 are due to the payoff of the principal balance outstanding on the credit facility. The interest expense of $63,000 and $126,000 for the three and six months ended June 30, 2024, respectively, constitutes the unused facility fee.
Current wording
The decreases in credit line interest in the three and nine months ended September 30, 2024 are due to the payoff of the principal balance outstanding on the credit facility. The interest expense of $64,000 and $189,000 for the three and nine months ended September 30, 2024, respectively, constitutes the unused facility fee.
Previous wording
The weighted average interest rate was 6.69% and 6.44% for the three and six months ended June 30, 2023, respectively, and the weighted average principal amount outstanding was $16.6 million and $18.4 million for the three and six months ended June 30, 2023, respectively.
Current wording
The weighted average interest rate was 7.01% and 6.60% for the three and nine months ended September 30, 2023, respectively, and the weighted average principal amount outstanding was $14.7 million and $17.1 million for the three and nine months ended September 30, 2023, respectively.
Previous wording
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. Our available liquidity at August 1, 2024, was $134.1 million, including $34.1 million of cash and cash equivalents (including the credit facility’s required minimum $3.0 million average deposit maintenance balance) and up to $100.0 million available under our credit facility. At August 1, 2024, the facility is available for the acquisition of commercial real estate, repayment of mortgage debt, and up to $40.0 million for renovation and operating expense purposes.
Current wording
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. Our available liquidity at November 1, 2024, was $129.8 million, including $29.8 million of cash and cash equivalents (including the credit facility’s required minimum $3.0 million average deposit maintenance balance) and up to $100.0 million available under our credit facility. At November 1, 2024, the facility is available for the acquisition of commercial real estate, repayment of mortgage debt, and up to $40.0 million for renovation and operating expense purposes.
Previous wording
At June 30, 2024, we had 68 outstanding mortgages payable secured by 69 properties in the aggregate principal amount of $419.8 million (before netting unamortized deferred financing costs of $3.6 million and mortgage intangibles of $736,000). These mortgages represent first liens on individual real estate investments with an aggregate carrying value of $672.6 million, before accumulated depreciation of $131.3 million. After giving effect to interest rate swap agreements, the mortgage payments bear interest at fixed rates ranging from 3.05% to 8.33% (a 4.41% weighted average interest rate) and mature between 2024 and 2047 (a 6.0 year weighted average remaining term to maturity).
Current wording
At September 30, 2024, we had 64 outstanding mortgages payable secured by 65 properties in the aggregate principal amount of $430.5 million (before netting unamortized deferred financing costs of $3.7 million and mortgage intangibles of $702,000). These mortgages represent first liens on individual real estate investments with an aggregate carrying value of $685.0 million, before accumulated depreciation of $129.4 million. After giving effect to interest rate swap agreements, the mortgage payments bear interest at fixed rates ranging from 3.05% to 6.25% (a 4.53% weighted average interest rate) and mature between 2024 and 2047 (a 6.2 year weighted average remaining term to maturity).
Previous wording
The following table sets forth, as of June 30, 2024, information with respect to our mortgage debt that is payable during the six months ending December 31, 2024 and for each of the subsequent twelve months through December 31, 2027:
Current wording
The following table sets forth, as of September 30, 2024, information with respect to our mortgage debt that is payable during the three months ending December 31, 2024 and for each of the subsequent twelve months through December 31, 2027:
Previous wording
We anticipate refinancing a substantial portion of the remaining debt maturing in 2024 and 2025, although given the significant increase in interest rates over the past year, we can provide no assurance that we will be able to do so on terms as favorable as those currently in effect or at all. We generally intend to repay the amounts not refinanced or extended from our existing funds and sources of funds, including our available cash, proceeds from property sales and, if any, the sale of our common stock, and our credit facility (to the extent available).
Current wording
We intend to make debt amortization payments from operating cash flow and, although no assurance can be given that we will be successful in this regard, generally intend to refinance, extend or pay off the mortgage loans which mature from 2024 through 2027. In particular, we anticipate refinancing a substantial portion of the remaining debt maturing in 2024 and 2025, although given the significant increase in interest rates over the past year, we can provide no assurance that we will be able to do so on terms as favorable as those currently in effect or at all. We generally intend to repay the amounts not refinanced or extended from our existing funds and sources of funds, including our available cash, proceeds from property sales and, if any, the sale of our common stock, and our credit facility (to the extent available).
Previous wording
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.
Current wording
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
Previous wording
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. The facility matures December 31, 2026 and 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 the six months ended June 30, 2024 and 2023. 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. The interest rate on the facility was 7.09% at each of June 30, 2024 and August 1, 2024.
Current wording
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. The facility matures December 31, 2026 and 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 the nine months ended September 30, 2024 and 2023. 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. The interest rate on the facility was 6.59% and 6.42% at September 30, 2024 and November 1, 2024.
Previous wording
We own a land parcel located in Beachwood, Ohio which is improved by a multi-family complex (i.e., The Vue Apartments) that we ground lease to the owner/operator of such complex. This ground lease did not generate any rental income during the six months ended June 30, 2024 and 2023. At June 30, 2024, the carrying value of the land on our balance sheet was approximately $17.3 million; our leasehold position is subordinate to $62.9 million of mortgage debt incurred by our tenant, the owner/operator of the multi-family complex. In addition, we have agreed, in our discretion, to fund certain capital expenditures and operating cash flow shortfalls at this property. We do not believe that this type of off-balance sheet arrangement has been or will be material to our liquidity and capital resource positions, except to the extent we determine to continue to fund the capital expenditures required by, and the operating cash flow shortfalls at, this property. See Note 6 to our consolidated financial statements for additional information regarding this arrangement.
Current wording
We own a land parcel located in Beachwood, Ohio which is improved by a multi-family complex (i.e., The Vue Apartments) that we ground lease to the owner/operator of such complex. This ground lease did not generate any rental income during the nine months ended September 30, 2024 and 2023. At September 30, 2024, the carrying value of the land on our balance sheet was approximately $17.3 million; our leasehold position is subordinate to $62.6 million of mortgage debt incurred by our tenant, the owner/operator of the multi-family complex. In addition, we have agreed, in our discretion, to fund certain capital expenditures and operating cash flow shortfalls at this property. We do not believe that this type of off-balance sheet arrangement has been or will be material to our liquidity and capital resource positions, except to the extent we determine to continue to fund the capital expenditures required by, and the operating cash flow shortfalls at, this property. See Note 6 to our consolidated financial statements for additional information regarding this arrangement.
Previous wording
The $324,000, or 3.4%, decrease in FFO for the three months ended June 30, 2024 from the corresponding 2023 period is due primarily to:
Current wording
The $498,000, or 5.1%, decrease in FFO for the three months ended September 30, 2024 from the corresponding 2023 period is due primarily to:
Previous wording
The $521,000, or 4.8%, decrease in AFFO for the three months ended June 30, 2024 from the corresponding 2023 period is due to the factors impacting FFO as described immediately above, excluding the (i) $397,000 decrease in general and administrative expenses related to the amortization of restricted stock and RSU compensation and (ii) a $117,000 increase in rental income, net, due to the exclusion of the amortization of straight line rent and lease-related intangibles.
Current wording
The $561,000, or 5.4%, decrease in AFFO for the three months ended September 30, 2024 from the corresponding 2023 period is due to the factors impacting FFO as described immediately above, including a $217,000 decrease in rental income, net, due to the exclusion of the amortization of straight line rent and lease-related intangibles.
Previous wording
The $879,000, or 4.5%, decrease in FFO for the six months ended June 30, 2024 from the corresponding 2023 period is due primarily to:
Current wording
The $1.4 million, or 4.7%, decrease in FFO for the nine months ended September 30, 2024 from the corresponding 2023 period is due primarily to:
Previous wording
The $1.1 million, or 5.2%, decrease in AFFO for the six months ended June 30, 2024 from the corresponding 2023 period is due to the factors impacting FFO as described immediately above, excluding the (i) $453,000 decrease in general and administrative expenses related to the amortization of restricted stock and RSU compensation, (ii) a $351,000 increase in rental income, net, due to the exclusion of the amortization of straight line rent and lease-related intangibles, and (iii) $250,000 lease termination fee income.
Current wording
The $1.7 million, or 5.2%, decrease in AFFO for the nine months ended September 30, 2024 from the corresponding 2023 period is due to the factors impacting FFO as described immediately above, excluding the (i) $416,000 decrease in general and administrative expenses related to the amortization of restricted stock and RSU compensation, (ii) $250,000 lease termination fee income, and (iii) a $133,000 increase in rental income, net, due to the exclusion of the amortization of straight line rent and lease-related intangibles.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
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.