One Liberty Properties Inc (OLP) SEC Annual Report (10-K) for 2010

Use these links to rapidly review the document
TABLE OF CONTENTS Form 10-K
PART IV

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

Commission File Number 001-09279

ONE LIBERTY PROPERTIES, INC.
(Exact name of registrant as specified in its charter)

Registrant's telephone number, including area code: (516) 466-3100

         Securities registered pursuant to Section 12(b) of the Act:

         Securities registered pursuant to Section 12(g) of the Act: NONE

         Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes  o     No  ý

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes  o     No  ý

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ý     No  o

         Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  o     No  o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definitions of "large accelerated filer," "accelerated filer," and "small reporting company" in Rule 12b-2 of the Exchange Act.

         Indicate by check mark whether registrant is a shell company (defined in Rule 12b-2 of the Act). Yes  o     No  ý

         As of June 30, 2010 (the last business day of the registrant's most recently completed second quarter), the aggregate market value of all common equity held by non-affiliates of the registrant, computed by reference to the price at which common equity was last sold on said date, was approximately $127.2 million.

         As of March 10, 2011, the registrant had 14,359,740 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the proxy statement for the 2011 annual meeting of stockholders of One Liberty Properties, Inc., to be filed pursuant to Regulation 14A not later than May 2, 2011, are incorporated by reference into Part III of this Annual Report on Form 10-K.

Table of Contents

TABLE OF CONTENTS
Form 10-K

Table of Contents

PART I

Item 1.     Business.

General

        We are a self-administered and self-managed real estate investment trust, also known as a REIT. We were incorporated under the laws of the State of Maryland on December 20, 1982. We acquire, own and manage a geographically diversified portfolio of retail (including furniture and office supply stores), industrial, office, flex, health and fitness and other properties, a substantial portion of which are under long-term leases. Substantially all of our leases are "net leases" and ground leases under which the tenant is typically responsible for real estate taxes, insurance and ordinary maintenance and repairs. As of December 31, 2010, we owned 84 properties, two of which are vacant, and one of which is a 50% tenancy in common interest, and participated in four joint ventures that own four properties. Our properties and the properties owned by our joint ventures are located in 29 states and have an aggregate of approximately 5.1 million square feet of space (including approximately 106,000 square feet of space at the property in which we own a tenancy in common interest and approximately 1.1 million square feet of space at properties owned by the joint ventures in which we participate).

        As of December 31, 2010:

        Our 2011 contractual rental income includes, after giving effect to any abatements, concessions or adjustments (i) rental income that is payable to us in 2011 under leases existing at December 31, 2010, excluding rental income from two tenants that are debtors in bankruptcy proceedings and (ii) rental income that is payable to us in 2011 on our tenancy in common interest.

        Our share of the rental income payable to our joint ventures in 2011 will be approximately $1.3 million; such sum is not included in 2011 contractual rental income.

        We refer to the mortgages on our properties as being "non-recourse (subject to standard carve-outs)." The term "standard carve-outs" refers to recourse items to an otherwise non-recourse mortgage and are customary to mortgage financing. While carve-outs vary from lender to lender and transaction to transaction, the carve-outs may include, among other things, environmental liabilities, the sale, financing or encumbrance of the property in violation of loan documents, damage to property as a result of intentional misconduct or gross negligence, failure to pay valid taxes and other claims which could create liens on property and the conversion of security deposits, insurance proceeds or condemnation awards.

Recent Developments

        In 2010, we acquired 14 properties for $72.3 million (including the assumption of an aggregate of $33.6 million in mortgage debt). The properties are located in Pennsylvania, Connecticut, Missouri, Texas and New York and account for approximately $5.8 million or 13.9% of our 2011 contractual rental income. We also sold two properties in the third quarter of 2010 for an aggregate of $4.1 million

1

Table of Contents

and realized a gain of approximately $235,000. The properties sold accounted for $165,000 of income from discontinued operations in 2010.

        In May 2010 (effective as of March 2010) and January 2011, we amended our revolving credit line. After giving effect to these amendments, the maturity of our credit line was extended until March 2013, we are permitted to borrow up to $55 million and the interest rate was set at the greater of (i) 90 day LIBOR plus 3% and (ii) 6%. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Credit Line" for further information on our credit line.

        In February 2011, we sold 2,700,000 shares of our common stock in a public offering for net proceeds of approximately $40.6 million. We used the proceeds to repay mortgage indebtedness of $7.7 million having a weighted average interest rate of 7.9% and to reduce by $26.2 million the amount outstanding under our revolving line of credit. We intend to use the remaining balance of such proceeds for general corporate purposes, including future property acquisitions.

        On February 18, 2011, Robb & Stucky Limited LLLP, a retail furniture operator which rents one property from us in Plano, Texas, and accounted for approximately $882,000 or 2.1% of our 2010 rental income, filed for bankruptcy protection. As a result, in the fourth quarter of 2010 we (i) took a charge of approximately $656,000 relating to the reversal of the straight-lining of rent payments and net lease intangibles that were recorded during the term of the lease to December 31, 2010 and (ii) accrued $288,000 for 2010 real estate tax expense associated with the property. We also did not collect, and may be unable to collect, an aggregate of approximately $349,000 of rent owed for December 2010 through February 2011. We have not taken an impairment charge with respect to this property. The taking of such charge, if any is required, would reduce our net income in the period in which such charge is taken.

Acquisition Strategies

        We seek to acquire properties throughout the United States that have locations, demographics and other investment attributes that we believe to be attractive. We believe that long-term leases provide a predictable income stream over the term of the lease, making fluctuations in market rental rates and in real estate values less significant to achieving our overall investment objectives. Our goal is to acquire properties that are subject to long-term net or ground leases that include periodic contractual rental increases or rent increases based on increases in the consumer price index. Periodic contractual rental increases provide reliable increases in future rent payments and rent increases based on the consumer price index provide protection against inflation. Historically, long-term leases have made it easier for us to obtain longer-term, fixed-rate mortgage financing with principal amortization, thereby moderating the interest rate risk associated with financing or refinancing our property portfolio by reducing the outstanding principal balance over time. We may, however, acquire a property that is subject to a short-term lease when we believe the property represents a good opportunity for recurring income and residual value. Although we regard the acquisition of properties subject to net and ground leases as an important aspect of our investment strategy, we have expanded our focus to include the acquisition of community shopping centers anchored by national or regional tenants. Typically, we would pay substantially all operating expenses at these community shopping centers, a significant portion of which will be reimbursed by the tenants pursuant to their leases.

        Generally, we hold the properties we acquire for an extended period of time. Our investment criteria are intended to identify properties from which increased asset value and overall return can be realized from an extended period of ownership. Although our investment criteria favor an extended period of ownership, we will dispose of a property if we regard the disposition of the property as an opportunity to realize the overall value of the property sooner or to avoid future risks by achieving a determinable return from the property.

2

Table of Contents

        We identify properties through the network of contacts of our senior management and our affiliates, which includes real estate brokers, private equity firms, banks and law firms. In addition, we attend industry conferences and engage in direct solicitations.

        Our charter documents do not limit on the number of properties in which we may invest, the amount or percentage of our assets that may be invested in any specific property or property type, or on the concentration of investments in any region in the United States. We do not intend to acquire properties located outside of the United States. We will continue to form entities to acquire interests in real properties, either alone or with other investors, and we may acquire interests in joint ventures or other entities that own real property.

        It is our policy, and the policy of our affiliated entities, that any investment opportunity presented to us or to any of our affiliated entities that involves primarily the acquisition of a net leased property, a ground lease or a community shopping center, will first be offered to us and may not be pursued by any of our affiliated entities unless we decline the opportunity.

Investment Evaluation

        In evaluating potential investments, we consider, among other criteria, the following:

Our Business Objective

        Our business objective is to maintain and increase the cash available for distribution to our stockholders by:

3

Table of Contents

Typical Property Attributes

        The properties in our portfolio and owned by our joint ventures typically have the following attributes:

Our Tenants

        The following table sets forth information about the diversification of our tenants by industry sector as of December 31, 2010:

(1) Our 2011 contractual rental income includes, after giving effect to any abatements, concessions or adjustments (i) rental income that is payable to us in 2011 under leases existing at December 31, 2010, excluding rental income from tenants that are debtors in bankruptcy proceedings and (ii) rental income that is payable to us in 2011 on our tenancy in common interest.
(2) Eighteen of the retail properties are net leased to single tenants. Four properties are net leased to a total of 20 separate tenants (one of which is in bankruptcy) pursuant to separate leases, eight properties are net leased to one tenant pursuant to a master lease, six properties are net leased to one tenant pursuant to a master lease, two properties are net leased to one tenant pursuant to two conterminous net leases, and one property is vacant.
(3) Eleven properties are net leased to Haverty Furniture Companies, Inc. pursuant to a master lease covering all locations. Four of the properties are net leased to single tenants (one of which is Robb & Stucky).
(4) Includes one vacant property.

4

Table of Contents