EDGAR 10-K Filing

Company CIK: 712770
Filing Year: 2022
Filename: 712770_10-K_2022_0001558370-22-003420.json

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ITEM 1. BUSINESS
Item 1. Business.
General
We are a self-administered and self-managed real estate investment trust, also known as a REIT. We acquire, own and manage a geographically diversified portfolio consisting primarily of industrial, retail, restaurant, health and fitness and theater properties, many of which are subject to long-term leases. Most of our leases are “net leases” under which the tenant, directly or indirectly, is responsible for paying the real estate taxes, insurance and ordinary maintenance and repairs of the property. As of December 31, 2021, we own 118 properties and participate in joint ventures that own three properties. These 121 properties are located in 31 states and have an aggregate of approximately 10.9 million square feet (including an aggregate of approximately 365,000­ square feet at properties owned by our joint ventures).
As of December 31, 2021:
● our 2022 contractual rental income (as described in “-Our Tenants”) is $68.3 million;
● the occupancy rate of our properties is 99.2% based on square footage;
● the weighted average remaining term of our mortgage debt is 6.4 years and the weighted average interest rate thereon is 4.18%; and
● the weighted average remaining term of the leases generating our 2022 contractual rental income is 6.0 years.
We maintain a website at www.1liberty.com. The reports and other documents that we electronically file with, or furnish to, the SEC pursuant to Section 13 or 15(d) of the Exchange Act can be accessed through this site, free of charge, as soon as reasonably practicable after we electronically file or furnish such reports. These filings are also available on the SEC’s website at www.sec.gov. The information on our website is not part of this report.
2021 and Recent Developments
In 2021:
● we acquired three industrial properties for an aggregate purchase price of $24.3 million. These properties account for $1.7 million, or 2.5%, of our 2022 contractual rental income.
● we sold five properties (i.e., three retail and two restaurant), for an aggregate net gain on sale of real estate of $25.5 million, without giving effect to $848,000 of mortgage prepayment costs. The properties sold accounted for $1.1 million, or 1.3%, and $2.1 million, or 2.5%, of 2021 and 2020 rental income, net, respectively.
● as the lease is expiring in June 2022, we entered into an agreement to sell an industrial property in Columbus, Ohio for a sale price of $8.5 million and anticipate this transaction will be completed in April 2022. This property generated $749,000 of rental income, net, and incurred operating expenses of $164,000 (including depreciation and amortization expense of $66,000) in 2021. We anticipate that we will recognize a $6.9 million gain from this sale in the quarter ending June 30, 2022.
● we entered into, amended or extended 35 leases with respect to approximately 2.4 million square feet, including:
- leases with Havertys Furniture, our most significant tenant, which extended for four-to-nine-years from the August 2022 expiration date, the lease term on ten of the eleven properties (after giving effect to a lease entered into in February 2022 with respect to one property (the “February Lease”)), it leases from us. (In January 2022, we entered into a contract to sell the
eleventh property, subject to the satisfaction of, among other things, the purchaser’s due diligence review). We also agreed to invest up to $3.1 million for tenant improvements, of which $1.5 million was funded through March 1, 2022. As of December 31, 2021, after giving effect to the February Lease, the weighted average remaining lease term is 6.2 years and rental income from this tenant is anticipated to be approximately $4.6 million, $4.1 million and $4.1 million in 2022, 2023 and 2024, respectively.
- lease amendments with Regal Cinemas pursuant to which (i) we deferred an aggregate of $1.4 million of rent (which was originally payable from September 2020 through August 2021) and the tenant agreed to pay such sum in equal monthly installments from January 2022 through June 2023 (and through February 2022, all such payments had been made), (ii) the tenant agreed to pay, and paid, an aggregate of $441,000 of rent from September 2020 through August 2021, and (iii) the parties extended the lease for the Indianapolis, Indiana property from December 2030 to December 2032.
- a five-year lease extension (through 2027) with a property tenanted by FedEx, which property accounts for 1.3% of 2022 contractual rental income, for an annual base rent of $868,000 through August 2022, $848,000 through August 2023, and increasing 2.5% annually thereafter.
- a six-year lease extension (through 2028) with The Toro Company, which accounts for 3.1% of 2022 contractual rental income, for annual base rent of $2.0 million through June 2022, $2.2 million through June 2023, and increasing 3% annually thereafter.
● we collected $2.7 million, or 99.7%, of the rent that we deferred in response to the pandemic and that was due in 2021.
Subsequent to December 31, 2021, we:
● acquired a 53,000 square foot industrial property in Fort Myers, Florida for a purchase price of $8.1 million and after the acquisition, obtained $4.9 million nine-year mortgage debt with an interest rate of 3.09% and amortizing over 25 years. The property is leased through 2030 and provides for an annual base rent of $443,000, with annual increases of 3.8% beginning in 2023. We anticipate that in 2022, this property will contribute $438,000 of base rent.
● entered into an agreement to sell four restaurant properties in Pennsylvania for a sales price of $10.0 million and anticipate this transaction will be completed in April 2022. These properties generated $525,000 of rental income, net, and incurred operating expenses of $100,000 (including depreciation and amortization expense of $59,000) and mortgage interest expense of $116,000 in 2021. We anticipate that we will recognize a $4.7 million gain from this sale in the quarter ending June 30, 2022.
● in connection with the expiration of the lease in February 2022, re-leased our industrial property in Pittston, Pennsylvania to The Lion Brewery for 20-years for an annual base rent of $1.4 million through February 2023, and increasing 3% annually thereafter.
● collected $189,000, or 99.8%, of the deferred rent that was due and payable in January and February 2022.
Our Business Objective
Our business objective is to increase stockholder value by:
● identifying opportunistic and strategic property acquisitions consistent with our portfolio and our acquisition strategies;
● monitoring and maintaining our portfolio, and as appropriate, working with tenants to facilitate the continuation or expansion of their tenancies;
● managing our portfolio effectively, including opportunistic and strategic property sales; and
● obtaining mortgage indebtedness (including refinancings) on favorable terms, ensuring that the cash flow generated by a property exceeds the debt service thereon and maintaining access to capital to finance property acquisitions.
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 primary objective is to acquire single-tenant properties that are subject to long-term net 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 and reducing the outstanding principal balance over time. We have, however, acquired properties, and may continue to acquire properties, that are subject to short-term leases when we believe that such properties represent a favorable opportunity for generating additional income from its re-lease or has significant residual value. Although the acquisition of single-tenant properties subject to net leases is the focus of our investment strategy, we also consider investments in, among other things, (i) properties that can be re-positioned or re-developed, (ii) community shopping centers anchored by national or regional tenants and (iii) properties ground leased to operators of multi-family properties.
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.
Historically, a significant portion of our portfolio generated rental income from retail properties. We are sensitive to the risks facing the retail industry and over the past several years have been addressing our exposure thereto by focusing on acquiring industrial properties and properties that, among other things, capitalize on e-commerce activities - since September 2016, we have not acquired any retail properties, and have sold 16 retail properties. As a result of the focus on industrial properties and the sale of retail properties, retail properties generated 30.2%, 32.9%, 35.2%, 41.9% and 43.7%, of rental income, net, in 2021, 2020, 2019, 2018 and 2017, respectively, and industrial properties generated 57.0%, 55.4%, 48.7%, 40.1% and 35.1%, of rental income, net, in 2021, 2020, 2019, 2018 and 2017, respectively.
We identify properties through the network of contacts of our senior management and our affiliates, which contacts include 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 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 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 (as described below), that any investment opportunity presented to us or to any of our affiliated entities that involves the acquisition of a net leased property, a ground lease (other than a ground lease of a multi-family property) 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. Further, to the extent our affiliates are unable or unwilling to pursue an acquisition of a multi-family property (including a ground lease of a multi-family property), we may pursue such transaction if it meets our investment objectives. Our affiliated entities include Gould Investors L.P., a master limited partnership involved primarily in the ownership and operation of a diversified portfolio of real estate assets, BRT Apartments Corp., a NYSE listed multi-family REIT and Majestic Property Management Corp., a property management company, which is wholly-owned by Fredric H. Gould, our vice chairman.
Investment Evaluation
In evaluating potential investments, we consider, among other criteria, the following:
● the current and projected cash flow of the property;
● the estimated return on equity to us;
● an evaluation of the property and improvements, given its location and use;
● alternate uses or tenants for the property;
● local demographics (population and rental trends);
● the purpose for which the property is used (e.g., industrial, retail, theater and health and fitness)
● the terms of tenant leases, including co-tenancy provisions and the relationship between current rents and market rents;
● the potential to finance or refinance the property;
● an evaluation of the credit quality of the tenant;
● the projected residual value of the property;
● the ability of a tenant, if a net leased property, or major tenants, if a multi-tenant property, to meet operational needs and lease obligations;
● potential for income and capital appreciation;
● occupancy of and demand for similar properties in the market area; and
● the ability of a tenant and the related property to weather the challenges presented by the pandemic, other similar events and any related economic dislocations.
Typical Property Attributes
As of December 31, 2021, the properties in our portfolio have the following attributes:
● Net leases. Most of our leases are net leases under which the tenant is typically responsible for real estate taxes, insurance and ordinary maintenance and repairs. We believe that investments in net leased properties offer reasonably predictable returns.
● Long-term leases. Many of our leases are long-term leases. The weighted average remaining term of our leases is 6.0 year, 5.6 years and 6.6 years at December 31, 2021, 2020 and 2019, respectively. Leases representing approximately 38.3%, 40.8% and 20.9% of our 2022 contractual rental income expire between 2022 and 2026, 2027 and 2030, and 2031 and thereafter, respectively.
● Scheduled rent increases. Leases representing approximately 76.4% of our 2022 contractual rental income provide for either periodic contractual rent increases or a rent increase based on the consumer price index.
Our Tenants
The following table sets forth information about the diversification of our tenants by industry sector as of December 31, 2021:
Percentage of
Number of
Number of
2022 Contractual
2022 Contractual
Type of Property
Tenants
Properties
Rental Income(1)
Rental Income
Industrial
$
39,476,238
57.8
Retail-General
11,799,104
17.3
Retail-Furniture
4,789,984
7.0
Restaurant
3,382,564
4.9
Health & Fitness
3,238,489
4.7
Retail-Office Supply(2)
2,085,527
3.1
Theater
1,899,760
2.8
Other
1,669,922
2.4
$
68,341,588
100.0
(1) Our 2022 contractual rental income represents, after giving effect to any abatements, concessions, deferrals or adjustments, the base rent payable to us in 2022 under leases in effect at December 31, 2021, including an aggregate of $541,000 representing twelve months of the base rent payable to us in 2022 from four restaurant properties in Pennsylvania which are anticipated to be sold in April 2022. Excluded from 2022 contractual rental income is an aggregate of $6.6 million comprised of: (i) $1.6 million representing our share of the base rent payable in 2022 to our joint ventures, (ii) subject to the property generating specified levels of positive operating cash flow, $1.3 million 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, (iii) $966,000 of COVID-19 rent deferral repayments due from Regal Cinemas, a tenant at two properties, which was not accrued to rental income, (iv) $801,000 of contractual base rent payable in 2022 pursuant to the 20-year lease entered into with respect to our Pittston, Pennsylvania industrial property, (v) approximately $754,000 of amortization of intangibles and approximately $640,000 of straight-line rent, (vi) approximately $438,000 of contractual base rent payable in 2022 from a property in Fort Myers, Florida which we acquired in January 2022, (vii) approximately $335,000 of contractual base rent payable through June 2022 from a property in Columbus, Ohio which the Company anticipates selling in April 2022 and (viii) $161,000 of COVID-19 rent deferral repayments accrued to rental income in 2020, of which $28,000 was paid by February 28, 2022.
(2) Includes five properties which are net leased to Office Depot pursuant to five separate leases. Four of the Office Depot leases contain cross-default provisions.
Many of our tenants (including franchisees of national chains) operate on a national basis including, among others, Advanced Auto, Applebees, Burlington Coat Factory, CVS, Famous Footwear, FedEx, Ferguson Enterprises, LA Fitness, Marshalls, NARDA Holdings, Inc., Northern Tool, Office Depot, PetSmart, Regal Cinemas, Ross Stores, Shutterfly, TGI Friday’s, The Toro Company, and Walgreens, and some of our tenants operate on a regional basis, including Havertys Furniture and Giant Food Stores.
Our Leases
Most of our leases are net leases under which the tenant, in addition to its rental obligation, typically is responsible, directly or indirectly for expenses attributable to the operation of the property, such as real estate taxes and assessments, insurance and ordinary maintenance and repairs. The tenant is also generally responsible for maintaining the property and for restoration following a casualty or partial condemnation. The tenant is typically obligated to indemnify us for claims arising from the property and is responsible for maintaining insurance coverage for the property it leases and naming us an additional insured. Under some net leases, we are responsible for structural repairs, including foundation and slab, roof repair or replacement and restoration following a casualty event, and at several properties we are responsible for certain expenses related to the operation and maintenance of the property.
Many of our leases provide for contractual rent increases periodically throughout the term of the lease or for rent increases pursuant to a formula based on the consumer price index. Some leases provide for minimum rents supplemented by additional payments based on sales derived from the property subject to the lease (i.e., percentage rent). Percentage rent contributed $70,000, $45,000 and $43,000 of rental income in 2021, 2020 and 2019, respectively.
Generally, our strategy is to acquire properties that are subject to existing long-term leases or to enter into long-term leases with our tenants. Our leases generally provide the tenant with one or more renewal options.
The following table sets forth scheduled expirations of leases at our properties as of December 31, 2021:
Approximate
Square
Percentage of
Footage
2022 Contractual
2022 Contractual
Number of
Subject to
Rental Income
Rental Income
Expiring
Expiring
Under Expiring
Represented by
Year of Lease Expiration(1)
Leases
Leases(2)
Leases
Expiring Leases
591,829
$
1,161,371
1.7
1,408,951
10,003,792
14.6
802,919
5,416,090
7.9
521,249
5,054,234
7.4
792,030
4,592,803
6.7
1,848,912
12,440,870
18.2
1,079,647
5,735,729
8.4
1,202,121
5,940,289
8.7
225,326
3,787,803
5.5
2031 and thereafter
1,941,078
14,208,607
20.9
10,414,062
$
68,341,588
100.0
(1) Lease expirations do not give effect to the exercise of existing renewal options.
(2) Excludes an aggregate of 79,107 square feet of vacant space.
Financing, Re-Renting and Disposition of Our Properties
Our credit facility provides us with a source of funds that may be used to acquire properties, payoff existing mortgages, and to a more limited extent, invest in joint ventures, improve properties and for working capital purposes. Net proceeds received from the sale, financing or refinancing of properties are required to be used to repay amounts outstanding under our facility. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources-Credit Facility”.
We mortgage specific properties on a non-recourse basis, subject to standard carve-outs to enhance the return on our investment in a specific property. The proceeds of mortgage loans are first applied to reduce indebtedness on our credit facility and the balance may be used for other general purposes, including property acquisitions, investments in joint ventures or other entities that own real property, and working capital.
With respect to properties we acquire on a free and clear basis, we usually seek to obtain long-term fixed-rate mortgage financing, when available at acceptable terms, shortly after the acquisition of such property to avoid the risk of movement of interest rates and fluctuating supply and demand in the mortgage markets. We also will acquire a property that is subject to (and will assume) a fixed-rate mortgage. Substantially all of our mortgages provide for amortization of part of the principal balance during the term, thereby reducing the refinancing risk at maturity. Some of our properties may be financed on a cross-defaulted or cross-collateralized basis, and we may collateralize a single financing with more than one property.
After termination or expiration of any lease relating to any of our properties, we will seek to re-rent or sell such property in a manner that will maximize the return to us, considering, among other factors, the income potential and market value of such property. We acquire properties for long-term investment for income purposes and do not typically engage in the turnover of investments. We will consider the sale of a property if a sale appears advantageous in view of our investment objectives. If there is a substantial tax gain, we may seek to enter into a tax deferred transaction and reinvest the proceeds in another property. Cash realized from the sale of properties, net of required payoffs of the related mortgage debt, if any, required paydowns of our credit facility, and distributions to stockholders, is available for general working capital purposes and the acquisition of additional properties.
Our Joint Ventures
As of December 31, 2021, we own a 50% equity interest in three joint ventures that own properties with approximately 365,000 square feet of space. At December 31, 2021, our investment in these joint ventures was approximately $10.2 million and the occupancy rate at these properties, based on square footage, was 59.1%. See “Item 2. Properties-Properties Owned by Joint Ventures” for information about, among other things, the occupancy rate at our joint venture properties.
Based on the leases in effect at December 31, 2021, we anticipate that our share of the base rent payable in 2022 to our joint ventures is approximately $1.6 million (excluding our $121,000 share of the COVID-19 rent deferral payments payable by Regal Cinemas, at our multi-tenant community shopping center in Manahawkin, New Jersey). Our property in Manahawkin, New Jersey, which we refer to as the “Manahawkin Property”, is expected to contribute 85.3% of the aggregate base rent payable by all of our joint ventures in 2022. Base rent for leases accounting for 2.5%, 43.5% and 54.0% of the aggregate base rent payable to all of our joint ventures in 2022, is payable pursuant to leases expiring from 2022 to 2023, from 2024 to 2025, and thereafter, respectively. See “Item 1A, Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for information regarding our Manahawkin, New Jersey joint venture.
Competition
The U.S. commercial real estate investment market is highly competitive. We compete with many entities engaged in the acquisition, development and operation of commercial properties. As such, we compete with other investors for a limited supply of properties and financing for these properties. Competitors include traded and non-traded public REITs, private equity firms, institutional investment funds, insurance companies and private individuals, many of which have greater financial and other resources than we have and the ability or willingness to accept more risk than we believe appropriate. There can be no assurance that we will be able to compete successfully with such entities in our acquisition, development and leasing activities in the future.
Regulation
Environmental
Investments in real property create the potential for environmental liability on the part of the owner or operator of such real property. If hazardous substances are discovered on or emanating from a property, the owner or operator of the property may be held strictly liable for all costs and liabilities relating to such hazardous substances. We have obtained a Phase I environmental study (which involves inspection without soil sampling or ground water analysis) conducted by independent environmental consultants on each of our properties and, in certain instances, have conducted additional investigations.
We do not believe that there are hazardous substances existing on our properties that would have a material adverse effect on our business, financial position or results of operations. We do not carry insurance coverage for the types of environmental risks described above.
We believe that we are in compliance, in all material respects, with all federal, state and local ordinances and regulations regarding hazardous or toxic substances. Furthermore, we have not been notified by any governmental authority of any noncompliance, liability or other claim in connection with any of our properties, that we believe would have a material adverse effect on our business, financial position or results of operations.
Americans with Disabilities Act of 1990
Our properties are required to comply with the Americans with Disabilities Act of 1990 and similar state and local laws and regulations (collectively, the “ADA”). The primary responsibility for complying with the ADA, (i.e., either us or our tenant) generally depends on the applicable lease, but we may incur costs if the tenant is responsible and does not comply. As of December 31, 2021, we have not been notified by any governmental authority, nor are we otherwise aware, of any non-compliance with the ADA that we believe would have a material adverse effect on our business, financial position or results of operations.
Other Regulations
State and local governmental authorities regulate the use of our properties. While many of our leases mandate that the tenant is primarily responsibe for complying with such regulations, the tenant’s failure to comply could result in the imposition of fines or awards of damages on us, as the property owner, or restrictions on the ability to conduct business on such properties.
Human Capital Resources
As of December 31, 2021, we had nine full-time employees (including five full-time executive officers), who devote substantially all of their business time to our activities. In addition, certain (i) executive, administrative, legal, accounting, clerical, property management, property acquisition, consulting (i.e., sale, leasing, brokerage, and mortgage financing), and construction supervisory services, which we refer to collectively as the “Services”, and (ii) facilities and other resources, are provided pursuant to a compensation and services agreement between us and Majestic Property Management Corp. Majestic Property is wholly owned by our vice chairman of the board and it provides compensation to certain of our executive officers.
In 2021, pursuant to the compensation and services agreement, we paid Majestic Property approximately $3.1 million for the Services plus $295,000 for our share of all direct office expenses, including rent, telephone, postage, computer services, internet usage and supplies. Included in the $3.1 million is $1.4 million for property management services-the amount for the property management services is based on 1.5% and 2.0% of the rental payments (including tenant reimbursements) actually received by us from net lease tenants and operating lease tenants, respectively. We do not pay Majestic Property with respect to properties managed by third parties. Based on our portfolio of properties at December 31, 2021, we estimate that the property management fee in 2022 will be approximately $1.3 million. See Notes 10 and 12 to our consolidated financial statements for information about the amounts paid to Majestic Property for the Services and equity awards to individuals performing Services.
We provide a competitive benefits program to help meet the needs of our employees. In addition to salaries, the program includes annual cash bonuses, stock awards, contributions to a pension plan, healthcare and insurance benefits, health savings accounts, paid time off, family leave and an education benefit. Employees are offered great flexibility to meet personal and family needs and regular opportunities to participate in professional development programs. Most of our employees have a long tenure with us, which we believe is indicative of our employees’ satisfaction with the work environment we provide.
We maintain a work environment that is free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression or any other status protected by applicable law, and our employees are compensated without regard to any of the foregoing.
Information About Our Executive Officers
Set forth below is a list of our executive officers whose terms expire at our 2022 annual board of directors’ meeting. The business history of our executive officers, who are also directors, will be provided in our proxy statement to be filed pursuant to Regulation 14A not later than May 2, 2022.
NAME
AGE
POSITION WITH THE COMPANY
Matthew J. Gould*
Chairman of the Board
Fredric H. Gould*
Vice Chairman of the Board
Patrick J. Callan, Jr.
President, Chief Executive Officer and Director
Lawrence G. Ricketts, Jr.
Executive Vice President and Chief Operating Officer
Jeffrey A. Gould*
Senior Vice President and Director
David W. Kalish**
Senior Vice President and Chief Financial Officer
Mark H. Lundy
Senior Vice President
Israel Rosenzweig
Senior Vice President
Karen Dunleavy
Senior Vice President, Financial
Alysa Block
Treasurer
Richard M. Figueroa
Senior Vice President
Isaac Kalish**
Vice President and Assistant Treasurer
Justin Clair
Senior Vice President - Acquisitions
*
Matthew J. Gould and Jeffrey A. Gould are Fredric H. Gould’s sons.
**
Isaac Kalish is David W. Kalish’s son.
Lawrence G. Ricketts, Jr. Mr. Ricketts has been our Chief Operating Officer since 2008, Vice President from 1999 through 2006 and Executive Vice President since 2006.
David W. Kalish. Mr. Kalish has served as our Senior Vice President and Chief Financial Officer since 1990 and as Senior Vice President, Finance of BRT Apartments Corp. since 1998. Since 1990, he has served as Vice President and Chief Financial Officer of the managing general partner of Gould Investors L.P. Mr. Kalish is a certified public accountant.
Mark H. Lundy. Mr. Lundy has served as our Vice President since 2000 and as our Senior Vice President since 2006. Mr. Lundy has been a Vice President of BRT Apartments Corp. from 1993 to 2006, its Senior Vice President since 2006, a Vice President of the managing general partner of Gould Investors from 1990 through 2012 and its President and Chief Operating Officer since 2013. He is an attorney admitted to practice in New York and the District of Columbia.
Israel Rosenzweig. Mr. Rosenzweig has served as our Senior Vice President since 1997, as Chairman of the Board of Directors of BRT Apartments Corp. since 2013, as Vice Chairman of its Board of Directors from 2012 through 2013, and as its Senior Vice President from 1998 through 2012. He has been a Vice President of the managing general partner of Gould Investors since 1997.
Karen Dunleavy. Ms. Dunleavy has served as our Senior Vice President, Financial since 2019, as our Vice President, Financial from 1994 through 2019, and as Treasurer of the managing general partner of Gould Investors from 1986 through 2013. Ms. Dunleavy is a certified public accountant.
Alysa Block. Ms. Block has been our Treasurer since 2007, and served as Assistant Treasurer from 1997 to 2007. Ms. Block has also served as the Treasurer of BRT Apartments Corp. from 2008 through 2013, and served as its Assistant Treasurer from 1997 to 2008.
Richard M. Figueroa. Mr. Figueroa has served as our Senior Vice President since 2019, as Vice President from 2001 through 2019, as Vice President of BRT Apartments Corp. from 2002 through 2019 and as Vice President of the managing general partner of Gould Investors since 1999. Mr. Figueroa is an attorney admitted to practice in New York.
Isaac Kalish. Mr. Kalish has served as our Vice President since 2013, Assistant Treasurer since 2007, as Assistant Treasurer of the managing general partner of Gould Investors from 2012 through 2013, as Treasurer from 2013, as Vice President and Treasurer of BRT Apartments Corp. since 2013, and as its Assistant Treasurer from 2009 through 2013. Mr. Kalish is a certified public accountant.
Justin Clair. Mr. Clair has been employed by us since 2006, served as Assistant Vice President from 2010 through 2014, as Vice President from 2014 through 2019, and as Senior Vice President - Acquisitions, since 2019.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors.
Set forth below is a discussion of certain risks affecting our business. The categorization of risks set forth below is meant to help you better understand the risks facing our business and is not intended to limit your consideration of the possible effects of these risks to the listed categories. Any impacts from the realization of any of the risks discussed, including our financial condition and results of operations, may, and likely will, adversely affect many aspects of our business. In addition to the other information contained or incorporated by reference in this Form 10-K, readers should carefully consider the following risk factors:
Risks Related to the COVID-19 Pandemic
The COVID-19 pandemic and the governmental and non-governmental responses thereto have adversely impacted, and may in the future, adversely impact our business, income, cash flow, results of operations, financial condition, liquidity, prospects, ability to service our debt obligations, or our ability to pay cash dividends to our stockholders.
Our ability to lease our properties and collect rental revenues and expense reimbursements, and the ability of our tenants to fulfill their obligations to us, is dependent in part upon national, regional and local economic conditions. The pandemic and the measures taken to combat it caused significant economic and other dislocations. As a result, many of our tenants (and in particular, theater, health and fitness, restaurant and retail tenants), experienced severe financial distress and, in 2020 and early 2021, obtained rent relief from us.
At December 31, 2021, $1.8 million of deferred rent is owed by four tenants at six properties (including our $182,000 share of deferred rent from Regal Cinemas, a tenant at our Manahawkin, New Jersey property). Approximately 69.2% and 30.8% of such deferred rent is due in 2022 and 2023, respectively. Two tenants account for $1.8 million, or 99.1%, of such deferred rent (i.e., Regal Cinemas, $1.6 million, and LA Fitness, $157,000). The failure of the tenants to pay deferred rent will adversely impact our cash flow, net income, liquidity and ability to pay dividends.
The seesaw nature of the pandemic and its impact on the economy and financial markets present material risks and uncertainties. We are unable to predict the ultimate impact that the pandemic and the related dislocations will have on our business, financial condition, results of operation and cash flows, which will depend largely on various factors outside of our control. The pandemic and the related dislocations may result in, and in some cases has resulted in, among other things, (i) tenants being unable to satisfy their obligations to us (including obligations under deferral arrangements or extended leases) and as a result, may seek additional rent relief, may choose not to renew their leases or only renew on terms less favorable to us, (ii) adversely effect tenants that to date have not been so impacted, (iii) our rent collections at challenged properties may be insufficient, without an accommodation from the mortgage lender, to pay our debt service obligations with respect to such properties, (iv) the mortgage lenders for challenged properties being unwilling or unable to allow for accommodations or further accommodations with respect to our debt service obligations at such properties, (v) an acceleration of the trend toward e-commerce at the expense of the “bricks and mortar” commerce in which we have a significant presence, (vi) it being more difficult to obtain equity and debt financing, (vii) the abandonment or further delay of our re-development of the Manahawkin Property and (viii) it being more difficult to acquire properties to grow our business and dispose of underperforming assets. Our business, income, cash flow, results of operations, financial condition, liquidity, prospects, ability to service our debt, and ability to pay cash dividends to our stockholders, will be adversely effected upon the occurrence of any one or more of the foregoing.
Risks Related to Our Business
If we are unable to re-rent properties upon the expiration of our leases or if our tenants default or seek bankruptcy protection, our rental income will be reduced and we would incur additional costs.
Substantially all of our rental income is derived from rent paid by our tenants. From 2023 through 2025, leases with respect to 62 tenants that account for 29.9% of our 2022 contractual rental income, expire, including leases with seven tenants (i.e., City of New York, Shutterfly, Burlington Coat Factory, LA Fitness, Power
Distributors, Dufresne Spencer Group, and FedEx) at seven properties that account for 9.2% of 2022 contractual rental income. From 2026 through 2027, leases with respect to 38 tenants that account for 24.9% of our 2022 contractual rental income, expire. If our tenants, and in particular, our significant tenants, (i) do not renew their leases upon the expiration of same, (ii) default on their obligations or (iii) seek rent relief, lease renegotiation or other accommodations, our revenues could decline and, in certain cases, co-tenancy provisions (i.e., a tenant’s right to reduce their rent or terminate their lease if certain key tenants vacate a property) may be triggered possibly allowing other tenants at the same property to reduce their rental payments or terminate their leases. At the same time, we would remain responsible for the payment of the mortgage obligations with respect to the related properties and would become responsible for the operating expenses related to these properties, including, among other things, real estate taxes, maintenance and insurance. In addition, we may incur expenses in enforcing our rights as landlord. Even if we find replacement tenants or renegotiate leases with current tenants, the terms of the new or renegotiated leases, including the cost of required renovations or concessions to tenants, or the expense of the reconfiguration of a tenant’s space, may be less favorable than current lease terms and could reduce the amount of cash available to meet expenses and pay dividends. If tenants facing financial difficulties default on their obligation to pay rent or do not renew their leases at lease expiration, our results of operations, cash flow and financial condition may be adversely affected.
Traditional retail tenants account for 27.4% of our 2022 contractual rental income and the competition that such tenants face from e-commerce retail sales could adversely affect our business.
Approximately 27.4% of our 2022 contractual rental income is derived from retail tenants, including 7.0% from tenants engaged in selling furniture (i.e., Havertys Furniture accounts for 6.1% of 2022 contractual rental income) and 3.1% from a tenant engaged in selling office supplies (i.e., Office Depot, a tenant at five properties, of which one property is currently closed but for which the tenant continues to pay rent). Because e-commerce retailers may be able to provide customers with better pricing and the ease, comfort and safety of shopping from their home or office, our retail tenants face increasing competition from e-commerce retailers, which competition may continue to accelerate as a result of the pandemic. The accelerating growth of e-commerce sales decreases the need for traditional retail outlets and reduce retailers’ space and property requirements. This adversely impacts our ability to rent space at our retail properties and increases competition for retail tenants thereby reducing the rent we would receive at these properties and adversely affect our results of operations, cash flow and financial condition.
Approximately 24.5% of our 2022 contractual rental income is derived from five tenants. The default, financial distress or failure of any of these tenants, or such tenant’s determination not to renew or extend their lease, could significantly reduce our revenues.
Havertys Furniture, FedEx, LA Fitness, Northern Tool and NARDA Holdings, Inc. account for approximately 6.1%, 5.2%, 4.7%, 4.4% and 4.1%, respectively, of our 2022 contractual rental income. The default, financial distress or bankruptcy of any of these or other significant tenants or such tenant’s determination not to renew or extend their lease, could significantly reduce our revenues, would cause interruptions in the receipt of, or the loss of, a significant amount of rental income and would require us to pay operating expenses (including real estate taxes) currently paid by the tenant. This could also result in the vacancy of the property or properties occupied by the defaulting or non-renewing tenant, which would significantly reduce our rental revenues and net income until the re-rental of the property or properties and could decrease the ultimate sale value of the property.
Write-offs of unbilled rent receivables and intangible lease assets will reduce our net income, total assets and stockholders’ equity and may result in breaches of financial covenants under our credit facility.
At December 31, 2021, the aggregate of our unbilled rent receivable and intangible lease assets is $35.0 million (including $20.7 million of intangible lease assets); five tenants (i.e., Northern Tools, FedEx, Famous Footwear, Applebees and LA Fitness) account for 35.9% of such sum. We are required to assess the collectability of our unbilled rent receivables and the remaining useful lives of our intangible lease assets. Such assessments take into consideration, among other things, a tenant’s payment history, financial condition, and the likelihood of collectability of future rent. If we determine that the collectability of a tenant’s unbilled rent receivable is not probable or that the useful life of a tenant’s intangible lease asset has changed, write-offs would
be required. Such write-offs result in a reduction of our net income, total assets and stockholders’ equity and in certain circumstances may result in the breach of our financial covenants under the credit facility.
The concentration of our properties in certain states may make our revenues and the value of our portfolio vulnerable to adverse changes in local economic conditions.
Some of the properties we own are located in the same or a limited number of geographic regions. Approximately 55.5% of our 2022 contractual rental income is derived from properties located in eight states- South Carolina (9.7%), New York (9.5%), Texas (7.8%), Pennsylvania (6.7%), Georgia (5.7%), North Carolina (5.7%), New Jersey (5.2%) and Maryland (5.2%). As a result, a decline in the economic conditions in these states or in regions where our properties may be concentrated in the future, may have an adverse effect on the rental and occupancy rates for, and the property values of, these properties, which could lead to a reduction of our rental income and/or impairment charges.
Our portfolio of properties is concentrated in the industrial and retail real estate sectors, and our business would be adversely affected by an economic downturn in either of such sectors.
Approximately 57.8% and 27.4% of our 2022 contractual rental income is derived from industrial and retail tenants, respectively, and we are vulnerable to economic declines that negatively impact these sectors of the economy, which could have an adverse effect on our results of operations, liquidity and financial condition.
Declines in the value of our properties could result in impairment charges.
If we are presented with indicators of impairment in the value of a particular property or group of properties, we will be required to perform an impairment analysis for such property or properties. If we determine that any of our properties at which indicators of impairment exist have undiscounted cash flows below the net book value of such property, we will be required to recognize an impairment charge for the difference between the fair value and the book value during the quarter in which we make such determination. Any impairment charge would reduce our net income and stockholder’s equity.
Our ability to fully control the maintenance of our net-leased properties may be limited.
The tenants of our net-leased properties are responsible for maintenance and other day-to-day management of the properties. If a property is not adequately maintained in accordance with the terms of the applicable lease, we may incur expenses for deferred maintenance or other liabilities once the property is no longer leased. While we visit our properties on an intermittent basis, these visits are not comprehensive inspections and deferred maintenance items may go unnoticed. While our leases generally provide for recourse against the tenant in these instances, a bankrupt or financially-troubled tenant may be more likely to defer maintenance, and it may be more difficult to enforce remedies against such a tenant.
A significant portion of our leases are long-term and do not have fair market rental rate adjustments, which could negatively impact our income and reduce the amount of funds available to make distributions to stockholders.
A significant portion of our rental income comes from long-term net leases. There is an increased risk with long-term leases that the contractual rental increases in future years will fail to result in fair market rental rates during those years. If we do not accurately judge the potential for increases in market rental rates when negotiating these long-term leases or if we are unable to obtain any increases in rental rates over the terms of our leases, significant increases in future property operating costs, to the extent not covered under the net leases, could result in us receiving less than fair value from these leases. As a result, our income and distributions to our stockholders could be lower than they would otherwise be if we did not engage in long-term net leases. In addition, increases in interest rates may also negatively impact the value of our properties that are subject to long-term leases. While a significant number of our net leases provide for annual escalations in the rental rate, the increase in interest rates may outpace the annual escalations.
The pursuit of a re-development of a multi-tenant community shopping center located in Manahawkin, New Jersey owned by a joint venture may be unsuccessful or fail to meet our expectations.
A joint venture in which we are a 50% partner has been pursuing, since 2018, a re-development of the Manahawkin Property, a multi-tenant community shopping center located in Manahawkin, New Jersey. As a result of the related decrease in occupancy (i.e., an occupancy rate of 53.2% at December 31, 2021), the income and cash flow from this property is significantly lower than it was several years ago.
This re-development project may be unsuccessful or fail to meet our expectations due to a variety of risks and uncertainties including:
● whether and when anchor or significant tenants, such as Regal Cinemas, in light of the challenges presented by the pandemic, will continue paying rent and deferred rent,
● co-tenancy clauses that permit certain significant tenants to terminate their lease or otherwise reduce their rent obligations could be triggered if certain significant tenants vacate, cease paying rent or otherwise cease operations,
● current tenants that have informally agreed to participate in the re-development may abandon the project,
● the joint venture’s inability to obtain, on acceptable terms, the financing needed to implement the re-development,
● the joint venture’s inability to obtain all necessary zoning and other required governmental permits and authorizations on a timely basis,
● occupancy rates and rents at the re-developed property may not meet the expected levels and could be insufficient to make the property profitable,
● the inability to complete the project on schedule, or at all, as a result of factors, many of which are beyond the joint venture’s control, including the pandemic, weather, labor conditions and material shortages,
● increasing materials and labor costs,
● delays in the delivery of construction materials,
● development and construction costs of the project may exceed the joint venture’s estimates,
● we or our joint venture partner may not have sufficient resources to fund the project, and
● fluctuations in local and regional economic conditions due to the time lag between commencement and completion of the project.
If this re-development is abandoned, further delayed or otherwise unsuccessful we may may be (i) required to take an impairment charge, including a write-off of capitalized soft costs of $571,000 related to the re-development and (ii) adversely affected. See “Item 2. Properties” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Re-development of the Manahawkin Property” for further information about the Manahawkin Property.
Risks Related to Our Financing Activities, Indebtedness and Capital Resources
If we are unable to refinance our mortgage loans at maturity, we may be forced to sell properties at disadvantageous terms, which would result in the loss of revenues and in a decline in the value of our portfolio.
We had, as of December 31, 2021, $399.7 million in mortgage debt outstanding (all of which is non-recourse subject to standard carve-outs) and our debt is 35.8% of our total market capitalization. The risks associated with our mortgage debt, include the risks that cash flow from properties securing the indebtedness and our available cash and cash equivalents will be insufficient to meet required payments of principal and interest.
Generally, only a portion of the principal of our mortgage indebtedness will be repaid prior to or at maturity and we do not plan to retain sufficient cash to repay such indebtedness at maturity. Accordingly, to meet these obligations if they cannot be refinanced at maturity, we will have to use funds available under our credit facility, if any, and our available cash and cash equivalents to pay our mortgage debt or seek to raise funds through the financing of unencumbered properties, sale of properties or the issuance of additional equity. From 2022 through 2026, approximately $205.1 million of our mortgage debt matures-specifically, $44.8 million in 2022, $25.8 million in 2023, $62.6 million in 2024, $42.6 million in 2025 and $29.3 million in 2026. If we are unsuccessful in refinancing or extending existing mortgage indebtedness or financing unencumbered properties, selling properties on favorable terms or raising additional equity, our cash flow will be insufficient to repay all maturing mortgage debt when payments become due, and we may be forced to dispose of properties on disadvantageous terms or convey properties secured by mortgages to the mortgagees, which would lower our revenues and the value of our portfolio.
We may find that the value of a property could be less than the mortgage secured by such property. We may also have to decide whether we should refinance or pay off a mortgage on a property at which the mortgage matures prior to lease expiration and the tenant may not renew the lease. In these types of situations, after evaluating various factors, including among other things, the tenant’s competitive position in the applicable sub-market, our and our tenant’s estimates of its prospects, consideration of alternative uses and opportunities to re-purpose or re-let the property, we may seek to renegotiate the terms of the mortgage, or to the extent that the loan is non-recourse and the terms of the mortgage cannot be satisfactorily renegotiated, forfeit the property by conveying it to the mortgagee and writing off our investment.
If our credit facility is not renewed, interest rates increase or credit markets tighten, it may be more difficult for us to secure financing, which may limit our ability to finance or refinance our real estate properties, reduce the number of properties we can acquire, sell certain properties, and decrease our stock price.
Our credit facility expires December 31, 2022. Among other things, we depend on the facility to allow us to acquire properties on an accelerated basis (hereby potentially making our offer to purchase a property more attractive than offers from competitors), without the delays that may be associated with traditional mortgage financing. We can provide no assurance that such facility will be renewed or that if renewed, that the terms thereof will not be less favorable than the terms of the current facility. The members of our lending consortium have agreed to merge with one another which, if completed, would reduce from four to two, the members of such consortium. The remaining two members of the lending consortium may, in connection with a renewal of the facility, be unwilling to maintain their current combined level of credit exposure to us and may reduce the amount available to be borrowed under the renewed facility. If this facility is not renewed on terms at least as favorable to us as currently in place, our liquidity and capital resource position may be adversely impacted.
Increases in interest rates or reduced access to credit markets may make it difficult for us to obtain financing, refinance mortgage debt, limit the mortgage debt available on properties we wish to acquire and limit the properties we can acquire. Even in the event that we are able to secure mortgage debt on, or otherwise finance our real estate properties, due to increased costs associated with securing financing and other factors beyond our control, we may be unable to refinance the entire outstanding loan balance or be subject to unfavorable terms (such as higher loan fees, interest rates and periodic payments). In addition, an increase in interest rates could decrease the amount third parties are willing to pay for our assets, thereby limiting our ability to reposition our portfolio promptly in response to changes in economic or other conditions.
Interest rates have become increasingly volatile and during the three years ended December 31, 2021, the interest rate on the 10-year treasury notes ranged from 0.38% to 2.80%. At March 1, 2022, the interest rate on such notes was 1.73%. If we are required to refinance mortgage debt that matures over the next several years at higher interest rates than such mortgage debt currently bears, the funds available for dividends may be reduced. The following table sets forth, as of December 31, 2021, the principal balance of the mortgage payments due at maturity on our properties and the weighted average interest rate thereon (dollars in thousands):
Principal
Balances
Weighted Average
Due at
Interest Rate
Year
Maturity
Percentage
$
31,590
3.92
12,973
4.31
50,694
4.42
32,063
4.32
19,179
3.88
2027 and thereafter
145,609
4.08
We manage a substantial portion of our exposure to interest rate risk by accessing debt with staggered maturities, obtaining fixed rate mortgage debt and by fixing the interest rate on variable rate debt through the use of interest rate swap agreements. However, no amount of hedging activity can fully insulate us from the risks associated with changes in interest rates. Swap agreements involve risk, including that counterparties may fail to honor their obligations under these arrangements, and these arrangements have caused us to pay higher interest rates on our debt obligations than would otherwise be the case. Failure to hedge effectively against interest rate risk could adversely affect our results of operations and financial condition.
Because REIT stocks are often perceived as high-yield investments, investors may perceive less relative benefit to owning REIT stocks as interest rates and the yield on government treasuries and other bonds increase. Accordingly, the increase in interest rates over the past several months may reduce the amount investors are willing to pay for our common stock.
If our borrowings increase, the risk of default on our repayment obligations and our debt service requirements will also increase.
At December 31, 2021, we had $411.4 million of debt outstanding, including $399.7 million of mortgage debt and $11.7 million of debt incurred pursuant to our credit facility. Increased leverage, whether pursuant to our credit facility or mortgage debt, could result in increased risk of default on our payment obligations related to borrowings and in an increase in debt service requirements, which could reduce our net income and the amount of cash available to meet expenses and to pay dividends.
A breach of our credit facility could occur if a significant number of our tenants default or fail to renew expiring leases, or we take impairment charges against our properties.
Our credit facility includes covenants that require us to maintain certain financial ratios and comply with other requirements. If our tenants default under their leases or fail to renew expiring leases, generally accepted accounting principles may require us to recognize impairment charges against our properties, and our financial position could be adversely affected causing us to be in breach of the financial covenants contained in our credit facility.
Failure to meet interest and other payment obligations under our revolving credit facility or a breach by us of the covenants to maintain the financial ratios would place us in default under our credit facility, and, if the banks called a default and required us to repay the full amount outstanding under the credit facility, we might be required to rapidly dispose of our properties, which could have an adverse impact on the amounts we receive on such disposition. If we are unable to dispose of our properties in a timely fashion to the satisfaction of the banks, the banks could foreclose on that portion of our collateral pledged to the banks, which could result in the disposition of our properties at below market values. The disposition of our properties at below our carrying value would adversely affect our net income, reduce our stockholders’ equity and adversely affect our ability to pay dividends.
The phasing out of LIBOR may adversely affect our cash flow and financial results.
At December 31, 2021, our variable rate debt that bears interest at the one month LIBOR rate plus a negotiated spread is in principal amount of $68.6 million (i.e., $56.9 million of mortgage debt and $11.7 million of credit facility debt). We hedged our exposure to the fluctuating interest payments on this mortgage debt by entering into interest rate swaps with the counterparties (or their affiliates) to such debt - these swaps effectively fix our interest payments under the related debt. At December 31, 2021, we have 19 swaps with three separate counterparties and an aggregate notional amount of $56.9 million. The fluctuating interest payments on the credit facility debt are not hedged. The authority regulating LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after June 2023 and it is possible that LIBOR will become unavailable at an earlier date. Approximately $51.2 million of this mortgage debt and the related notional amount of interest rate swaps mature after June 2023. Accordingly, there is uncertainty as to how the interest rate on this mortgage debt, the related swaps and the credit facility debt will be determined when LIBOR is unavailable. Though these agreements, and instruments provide for alternative methods of calculating the interest rate if LIBOR is unavailable, such alternative rates may be unavailable (or the alternative rate provided for in the variable rate mortgage debt may be inconsistent with the alternative rate provided for by the related swap), in which case we may have to negotiate an alternative rate with the counterparties to such debt, the related swaps and the credit facility debt - we can provide no assurance that we and our counterparties will be able to agree to alternative rates. Even if alternative rates are available, the swaps may not effectively hedge our interest payment obligation on this variable rate mortgage debt and may result in fluctuating interest payments with respect to such debt. Our cash flow and financial results may be adversely affected if we are unable to arrange a mutually satisfactory alternative rate to LIBOR for our variable rate mortgage debt and the credit facility debt. Further, the absence of LIBOR or a generally acceptable alternative thereto may make it difficult to hedge our interest rate exposure on variable rate mortgage debt that we incur in the future which in turn may make it more difficult to acquire properties.
Certain of our net leases and our ground leases require us to pay property related expenses that are not the obligations of our tenants.
Under the terms of substantially all of our net leases, in addition to satisfying their rent obligations, our tenants are responsible for the payment of real estate taxes, insurance and ordinary maintenance and repairs. However, under the provisions of certain net and ground leases, we are required to pay some expenses, such as the costs of environmental liabilities, roof and structural repairs, insurance premiums, certain non-structural repairs and maintenance. If our properties incur significant expenses that must be paid by us under the terms of our leases, our business, financial condition and results of operations will be adversely affected and the amount of cash available to meet expenses and pay dividends may be reduced.
Our failure to comply with our obligations under our mortgages may reduce our stockholders’ equity, and adversely affect our net income and ability to pay dividends.
Several of our mortgages include covenants that require us to maintain certain financial ratios, including various coverage ratios, and comply with other requirements. Failure to meet interest and other payment obligations under these mortgages or a breach by us of the covenants to comply with certain financial ratios would place us in non-compliance under such mortgages. If a mortgagee called a default and required us to repay the full amount outstanding under such mortgage, we might be required to rapidly dispose of the property subject to such mortgage which could have an adverse impact on the amounts we receive on such disposition. If we are unable to satisfy the covenants of a mortgage, the mortgagee could exercise remedies available to it under the applicable mortgage and as otherwise provided by law, including the possible appointment of a receiver to manage the property, application of deposits or reserves maintained under the mortgage for payment of the debt, or foreclose and/or cause the forced sale of the property or asset securing such debt. A foreclosure or other forced disposition of our assets could result in the disposition of same at below the carrying value of such asset. The disposition of our properties or assets at below our carrying value may adversely affect our net income, reduce our stockholders’ equity and adversely affect our ability to pay dividends.
Risks Related to Real Estate Investments
Our revenues and the value of our portfolio are affected by a number of factors that affect investments in leased real estate generally.
We are subject to the general risks of investing in leased real estate. These include the non-performance of lease obligations by tenants, leasehold improvements that will be costly or difficult to remove should it become necessary to re-rent the leased space for other uses, covenants in certain retail leases that limit the types of tenants to which available space can be rented (which may limit demand or reduce the rents realized on re-renting), rights to terminate leases due to co-tenancy provisions, events of casualty or condemnation affecting the leased space or the property or due to interruption of the tenant’s quiet enjoyment of the leased premises, obligations of a landlord to restore the leased premises or the property following events of casualty or condemnation, adverse changes in economic conditions and local conditions (e.g., changing demographics, retailing trends and traffic patterns), declines in rental rates, changes in the supply and price of quality properties and the market supply and demand of competing properties, the impact of environmental laws, security concerns, prepayment penalties applicable under mortgage financings, changes in tax, zoning, building code, fire safety and other laws and regulations, the type of insurance coverage available, and changes in the type, capacity and sophistication of building systems. The occurrence of any of these events could adversely impact our results of operations, liquidity and financial condition.
Real estate investments are relatively illiquid and their values may decline.
Real estate investments are relatively illiquid. Therefore, we will be limited in our ability to reconfigure our real estate portfolio in response to economic changes. We may encounter difficulty in disposing of properties when tenants vacate either at the expiration of the applicable lease or otherwise. If we decide to sell any of our properties, our ability to sell these properties and the prices we receive on their sale may be affected by many factors, including the number of potential buyers, the number of competing properties on the market and other market conditions, as well as whether the property is leased and if it is leased, the terms of the lease. As a result, we may be unable to sell our properties for an extended period of time without incurring a loss, which would adversely affect our results of operations, liquidity and financial condition.
Uninsured and underinsured losses may affect the revenues generated by, the value of, and the return from a property affected by a casualty or other claim.
Most of our tenants obtain, for our benefit, comprehensive insurance covering our properties in amounts that are intended to be sufficient to provide for the replacement of the improvements at each property. However, the amount of insurance coverage maintained for any property may be insufficient (i) to pay the full replacement cost of the improvements at the property following a casualty event or (ii) if coverage is provided pursuant to a blanket policy and the tenant’s other properties are subject to insurance claims. In addition, the rent loss coverage under the policy may not extend for the full period of time that a tenant may be entitled to a rent abatement as a result of, or that may be required to complete restoration following, a casualty event. In addition, there are certain types of losses, such as those arising from earthquakes, floods, hurricanes and terrorist attacks, that may be uninsurable or that may not be economically insurable. Changes in zoning, building codes and ordinances, environmental considerations and other factors also may make it impossible or impracticable for us to use insurance proceeds to replace damaged or destroyed improvements at a property. If restoration is not or cannot be completed to the extent, or within the period of time, specified in certain of our leases, the tenant may have the right to terminate the lease. If any of these or similar events occur, it may reduce our revenues, the value of, or our return from, an affected property.
We have been, and will continue to be, subject to significant competition and we may not be able to compete successfully for investments.
We have been, and will continue to be, subject to significant competition for attractive investment opportunities, and in particular, opportunities for industrial properties which are the primary focus of our and many of our competitors acquisition efforts. Our competitors include publicly-traded REITs, non-traded REITs, insurance companies, commercial and investment banking firms, private institutional funds, hedge funds, private
equity funds and other investors, many of whom have greater financial and other resources than we have. We may not be able to compete successfully for investments. If we pay higher prices for investments, our returns may be lower and the value of our assets may not increase or may decrease significantly below the amount we paid for such assets. If such events occur, we may experience lower returns on our investments.
Our current and future investments in joint ventures could be adversely affected by the lack of sole decision making authority, reliance on joint venture partners’ financial condition or insurance coverage, disputes that may arise between our joint venture partners and us and our reliance on one significant joint venture partner.
Six properties in which we have an interest are owned through consolidated joint ventures (three properties) and unconsolidated joint ventures (three properties). We may continue to acquire properties through joint ventures and/or contribute some of our properties to joint ventures. Investments in joint ventures may, under certain circumstances, involve risks not present when a third party is not involved, including the possibility that joint venture partners might file for bankruptcy protection, fail to fund their share of required capital contributions or obtain insurance coverage pursuant to a blanket policy as a result of which claims with respect to other properties covered by such policy and in which we have no interest could reduce or eliminate the coverage available with respect to the joint venture properties. Further, joint venture partners may have conflicting business interests or goals, and as a result there is the potential risk of impasses on decisions, such as a sale and the timing thereof. Any disputes that may arise between joint venture partners and us may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and effort on our business. Consequently, actions by or disputes with joint venture partners might result in subjecting properties owned by the joint venture to additional risk. With respect to our (i) consolidated joint ventures, we own, with two joint venture partners and their respective affiliates, properties that account for 4.0% of 2022 contractual rental income, and (ii) unconsolidated joint ventures, we own, with two joint venture partners and their affiliates, properties which account for our $1.6 million share of 2022 base rent payable. We may be adversely affected if we are unable to maintain a satisfactory working relationship with these joint venture partners or if any of these partners becomes financially distressed.
Regulatory and Tax Risks
Compliance with environmental regulations and associated costs could adversely affect our results of operations and liquidity.
Under various federal, state and local laws, ordinances and regulations, an owner or operator of real property may be required to investigate and clean up hazardous or toxic substances or petroleum product releases at the property and may be held liable to a governmental entity or to third parties for property damage and for investigation and cleanup costs incurred in connection with contamination. The cost of investigation, remediation or removal of hazardous or toxic substances may be substantial, and the presence of such substances, or the failure to properly remediate a property, may adversely affect our ability to sell or rent the property or to borrow money using the property as collateral. In connection with our ownership, operation and management of real properties, we may be considered an owner or operator of the properties and, therefore, potentially liable for removal or remediation costs, as well as certain other related costs, including governmental fines and liability for injuries to persons and property, not only with respect to properties we own now or may acquire, but also with respect to properties we have owned in the past.
We cannot provide any assurance that existing environmental studies with respect to any of our properties reveal all potential environmental liabilities, that any prior owner of a property did not create any material environmental condition not known to us, or that a material environmental condition does not otherwise exist, or may not exist in the future, as to any one or more of our properties. If a material environmental condition does in fact exist, or exists in the future, the remediation costs could have a material adverse impact upon our results of operations, liquidity and financial condition.
Compliance with the Americans with Disabilities Act could be costly.
Under the Americans with Disabilities Act of 1990, all public accommodations must meet Federal requirements for access and use by disabled persons. A determination that our properties do not comply with the Americans with Disabilities Act could result in liability for both governmental fines and damages. If we are required to make unanticipated major modifications to any of our properties to comply with the Americans with Disabilities Act, which are determined not to be the responsibility of our tenants, we could incur unanticipated expenses that could have an adverse impact upon our results of operations, liquidity and financial condition.
Legislative or regulatory tax changes could have an adverse effect on us.
There are a number of issues associated with an investment in a REIT that are related to the Federal income tax laws, including, but not limited to, the consequences of our failing to continue to qualify as a REIT. At any time, the Federal income tax laws governing REITs or the administrative interpretations of those laws may be amended or modified. Any new laws or interpretations may take effect retroactively and could adversely affect us or our stockholders.
Risks Related to OLP’s Organization, Structure and Ownership of Stock
Our transactions with affiliated entities involve conflicts of interest.
From time to time we have entered into transactions with persons and entities affiliated with us and with certain of our officers and directors. Such transactions involve a potential conflict of interest, and entail a risk that we could have obtained more favorable terms if we had entered into such transaction with an unaffiliated third party. We are a party to a compensation and services agreement with Majestic Property effective as of January 1, 2007, as amended. Majestic Property is wholly-owned by the vice chairman of our board of directors and it provides compensation to certain of our part-time senior executive officers and other individuals performing services on our behalf. Pursuant to the compensation and services agreement, we pay an annual fee to Majestic Property which provides us with the Services. See “Item 1. Business - Human Capital Resources”. In 2021 we paid, and in 2022 we anticipate paying, Majestic Property, (i) a fee of $3.1 million and $3.0 million, respectively, and (ii) $295,000 and $317,000, respectively, for our share of all direct office expenses, including rent, telephone, postage, computer services, supplies, and internet usage. We also obtain our property insurance in conjunction with Gould Investors L.P., our affiliate, and in 2021, reimbursed Gould Investors $1.4 million for our share of the insurance premiums paid by Gould Investors. At December 31, 2021, Gould Investors beneficially owns approximately 9.2% of our outstanding common stock and certain of our senior executive officers are also executive officers of the managing general partner of Gould Investors. See Note 10 of our consolidated financial statements for information regarding equity awards to individuals performing services on our behalf pursuant to the compensation and services agreement.
Our senior management and other key personnel, including those performing services on a part-time basis, are critical to our business and our future success depends on our ability to retain them.
We depend on the services of Matthew J. Gould, chairman of our board of directors, Fredric H. Gould, vice chairman of our board of directors, Patrick J. Callan, Jr., our president and chief executive officer, Lawrence G. Ricketts, Jr., our executive vice president and chief operating officer, and David W. Kalish, our senior vice president and chief financial officer, and other members of senior management to carry out our business and investment strategies. Of the foregoing executive officers, only Messrs. Callan and Ricketts, devote all of their business time to us. Other members of senior management provide services to us either on a full-time or part-time, as-needed basis. The loss of the services of any of our senior management or other key personnel, the inability or failure of the members of senior management providing services to us on a part-time basis to devote sufficient time or attention to our activities or our inability to recruit and retain qualified personnel in the future, could impair our ability to carry out our business and investment strategies.
Certain provisions of our charter, our Bylaws, as amended, and Maryland law may inhibit a change in control that stockholders consider favorable and could also limit the market price of our common stock.
Certain provisions of our charter (the “Charter”), our Bylaws and Maryland law may impede, or prevent, a third party from acquiring control of us without the approval of our board of directors. These provisions:
● provide for a staggered board of directors consisting of three classes, with one class of directors being elected each year and each class being elected for three-year terms and until their successors are duly elected and qualify;
● impose restrictions on ownership and transfer of our stock (such provisions being intended to, among other purposes, facilitate our compliance with certain requirements under the Code, relating to our qualification as a REIT under the Code); and
● provide that directors may be removed only for cause and only by the vote of at least a majority of all outstanding shares entitled to vote.
Certain provisions of the Maryland General Corporation Law (the “MGCL”) may impede a third party from making a proposal to acquire us or inhibit a change of control under circumstances that otherwise could be in the best interest of holders of shares of our common stock, including:
● “control share” provisions that provide that, subject to certain exceptions, holders of “control shares” of our company (defined as voting shares which, when aggregated with other shares controlled by the stockholder, entitle the holder to exercise voting power in the election of directors within one of three increasing ranges) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares,” subject to certain exceptions) have no voting rights with respect to the control shares except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares; and
● additionally, Title 3, Subtitle 8 of the MGCL permits our board of directors, without stockholder approval and regardless of what is currently provided in the Charter or the Bylaws, to implement certain corporate governance provisions.
Ownership of less than 9.9% of our outstanding stock could violate the restrictions on ownership and transfer in our Charter, which would result in the shares owned or acquired in violation of such restrictions being designated as “excess shares” and transferred to a trust for the benefit of a charitable beneficiary and loss of the right to receive dividends and other distributions on, and the economic benefit of any appreciation of, such shares, and you may not have sufficient information to determine at any particular time whether an acquisition of our shares will result in a loss of the economic benefit of such shares.
In order for us to qualify as a real estate investment trust under the Code, no more than 50% of the value of the outstanding shares of our stock may be owned, directly or indirectly or through application of certain attribution rules, by five or fewer “individuals” (as defined in the Code) at any time during the last half of a taxable year. To facilitate our qualification as a REIT under the Code, among other purposes, the Charter generally prohibits any person other than Fredric H. Gould, currently vice chairman of our board of directors, from actually or constructively owning more than 9.9% of the outstanding shares of all classes and series of our stock, which we refer to as the “ownership limit.” In addition, the Charter prohibits any person from beneficially or constructively owning shares of our stock that would result in more than 50% of the value of the outstanding shares of our stock to be beneficially owned by five or fewer individuals, regardless of whether such ownership is during the last half of any taxable year, which we refer to as the “Five or Fewer Limit.” Shares transferred in violation of either of these restrictions will be designated automatically as “excess shares” and transferred to a trust for the benefit of a charitable beneficiary selected by us. The person that attempted to acquire the shares of our stock in violation of the restrictions in the Charter will not be entitled to any dividends or distributions paid after the date of the transfer to the trust and, upon a sale of such shares by the trust, will generally be entitled to receive only the lesser of the market value on the date of the event that resulted in the transfer to the trust or the net proceeds of the sale by the trust to a person who could own the shares without violating the ownership limits.
Pursuant to the attribution rules under the Code, Fredric H. Gould, is our only stockholder that beneficially owned in excess of 9.9% of our capital stock on June 14, 2005, when the ownership limit became effective, and is the only person permitted to own and acquire shares of our capital stock, directly or indirectly, in excess of the ownership limit. Based on information supplied to us, as of December 31, 2021, Mr. Gould beneficially owns approximately 11.698% of the outstanding shares of our stock. As a result of Mr. Gould’s beneficial ownership of our stock, compliance with the 9.9% ownership limit will not ensure that your ownership of shares of our stock will not violate the Five or Fewer Limit or prevent shares of stock that you intended to acquire from being designated as “excess shares” and transferred to a charitable trust.
At December 31, 2021, if three other individuals unrelated to Mr. Gould were to beneficially own exactly 9.9% of our outstanding stock, no other individual may beneficially own 8.602% or more of our outstanding stock without violating the Five or Fewer Limit and causing the newly-acquired shares to be designated as “excess shares” and transferred to the charitable trust. However, there is no limitation on Mr. Gould acquiring additional shares of our stock or otherwise increasing his percentage of ownership of our stock, meaning that the amount of our stock that other persons or entities may acquire without potentially violating the Five or Fewer Limit could be reduced in the future and without notice. Our Board has exempted from the 9.9% ownership limit the ownership by Mr. Gould’s direct and indirect heirs of shares of our stock that they inherit from him, subject to the same conditions and limitations as apply to Mr. Gould.
Fredric H. Gould and his heirs will be required by the Exchange Act and regulations promulgated thereunder to report, with certain exceptions, their acquisition of additional shares of our stock within two days of such acquisitions, and all holders of our stock will be required to file reports of their acquisition of beneficial ownership (as defined in the Exchange Act) of more than 5% of our outstanding stock. However, beneficial ownership for purposes of the reporting requirements under the Exchange Act is calculated differently than beneficial ownership for purposes of determining compliance with the Five or Fewer Limit. As a result, you may not have enough information currently available to you at any time to determine the percentage of ownership of our stock that you can acquire without violating the Five or Fewer Limit and losing the economic benefit of the ownership of such newly-acquired shares.
Failure to qualify as a REIT could result in material adverse tax consequences and could significantly reduce cash available for distributions.
We operate so as to qualify as a REIT under the Code. Qualification as a REIT involves the application of technical and complex legal provisions for which there are limited judicial and administrative interpretations. The determination of various factual matters and circumstances not entirely within our control may affect our ability to qualify as a REIT. In addition, no assurance can be given that legislation, new regulations, administrative interpretations or court decisions will not significantly change the tax laws with respect to qualification as a REIT or the federal income tax consequences of such qualification. If we fail to quality as a REIT, we will be subject to federal, certain additional state and local income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates and would not be allowed a deduction in computing our taxable income for amounts distributed to stockholders. In addition, unless entitled to relief under certain statutory provisions, we would be disqualified from treatment as a REIT for the four taxable years following the year during which qualification is lost. The additional tax would reduce significantly our net income and the cash available to pay dividends.
We are subject to certain distribution requirements that may result in our having to borrow funds at unfavorable rates.
To obtain the favorable tax treatment associated with being a REIT, we generally are required, among other things, to distribute to our stockholders at least 90% of our ordinary taxable income (subject to certain adjustments) each year. To the extent that we satisfy these distribution requirements, but distribute less than 100% of our taxable income we will be subject to Federal and state corporate tax on our undistributed taxable income.
As a result of differences in timing between the receipt of income and the payment of expenses, and the inclusion of such income and the deduction of such expenses in arriving at taxable income, and the effect of nondeductible capital expenditures and the timing of required debt service (including amortization) payments, we
may need to borrow funds in order to make the distributions necessary to retain the tax benefits associated with qualifying as a REIT, even if we believe that then prevailing market conditions are not generally favorable for such borrowings. Such borrowings could reduce our net income and the cash available to pay dividends.
Compliance with REIT requirements may hinder our ability to maximize profits.
In order to qualify as a REIT for Federal income tax purposes, we must continually satisfy tests concerning, among other things, our sources of income, the amounts we distribute to our stockholders and the ownership of our stock. We may also be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution. Accordingly, compliance with REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.
In order to qualify as a REIT, we must also ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and real estate assets. Any investment in securities cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, no more than 5% of the value of our assets can consist of the securities of any one issuer, other than a qualified REIT security. If we fail to comply with these requirements, we must dispose of such portion of these securities in excess of these percentages within 30 days after the end of the calendar quarter in order to avoid losing our REIT status and suffering adverse tax consequences. This requirement could cause us to dispose of assets for consideration that is less than their true value and could lead to an adverse impact on our results of operations and financial condition.
If we reduce or do not increase our dividend, the market value of our common stock may decline.
The level of our dividend is established by our board of directors from time to time based on a variety of factors, including our cash available for distribution, funds from operations, adjusted funds from operations and maintenance of our REIT status. Various factors could cause our board of directors to decrease or not increase our dividend, including tenant defaults or bankruptcies resulting in a material reduction in our funds from operations, a material loss resulting from an adverse change in the value of one or more of our properties, or insufficient income to cover our dividends. In 2020 and 2019, approximately 8.1% and 27.0%, respectively, of our dividends exceeded our “earnings and profits” (as determined pursuant to the Code) and therefor constituted a return of capital; accordingly, we were not required to pay dividends that exceeded such earnings and profits to maintain our REIT status. It is possible that a portion of the dividends we would pay in 2022 would constitute a return of capital and in such event we would not be required to pay such sum to maintain our REIT status. If our board of directors determines to reduce or not increase our dividend for the foregoing or any other reason, the market value of our common stock could be adversely affected.
General Business Risks
Breaches of information technology systems could materially harm our business and reputation
We collect and retain on information technology systems, certain financial, personal and other sensitive information provided by third parties, including tenants, vendors and employees. We also rely on information technology systems for the collection and distribution of funds. We have been, and continue to be, subject to cybersecurity attacks though we have not incurred any significant loss therefrom. There can be no assurance that we will be able to prevent unauthorized access to sensitive information or the unauthorized distribution of funds. Any loss of this information or unauthorized distribution of funds as a result of a cybersecurity attack may result in loss of funds to which we are entitled, legal liability and costs (including damages and penalties), as well as damage to our reputation, that could materially and adversely affect our business.
Actual or threatened epidemics, pandemics, outbreaks, or other public health crises may adversely affect our tenants’ financial condition and the profitability of our properties.
Our business and the businesses of our tenants could be materially and adversely affected by the risks, or the public perception of the risks, related to an epidemic, pandemic, outbreak, or other public health crisis, such as the COVID-19 pandemic. The risk, or public perception of the risk, of a pandemic or media coverage of infectious diseases could cause customers to avoid retail properties, and with respect to our properties generally,
could cause temporary or long-term disruptions in our tenants’ supply chains and/or delays in the delivery of our tenants’ inventory. Moreover, an epidemic, pandemic, outbreak or other public health crisis, such as COVID-19, could cause the on-site employees of our tenants to avoid our tenants’ properties, which could adversely affect our tenants’ ability to adequately manage their businesses. Risks related to an epidemic, pandemic or other health crisis, such as COVID-19, could also lead to the complete or partial closure of one or more of our tenants’ stores or facilities. Such events could adversely impact our tenants’ sales and/or cause the temporary closure of our tenants’ businesses, which could severely disrupt their operations and the rental revenue we generate from our leases with them. The ultimate extent of the impact of any epidemic, pandemic or other health crisis on our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of such epidemic, pandemic or other health crisis and actions taken to contain or prevent their further spread, among others. These and other potential impacts of an epidemic, pandemic or other health crisis, such as COVID-19, could therefore materially and adversely affect our business, financial condition and results of operations.
The failure of any bank in which we deposit our funds could have an adverse impact on our financial condition.
We have diversified our cash and cash equivalents between several banking institutions in an attempt to minimize exposure to any one of these entities. However, the Federal Deposit Insurance Corporation only insures accounts in amounts up to $250,000 per depositor per insured bank. We currently have cash and cash equivalents deposited in certain financial institutions significantly in excess of federally insured levels. If any of the banking institutions in which we have deposited funds ultimately fails, we may lose our deposits over $250,000. The loss of our deposits may have an adverse effect on our financial condition.
We are dependent on third party software for our billing and financial reporting processes.
We are dependent on third party software, and in particular Yardi’s property management software, for generating tenant invoices and financial reports. If the software fails (including a failure resulting from such parties unwillingness or inability to maintain or upgrade the functionality of the software), our ability to bill tenants and prepare financial reports could be impaired which would adversely affect our business.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments.
None.

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ITEM 2. PROPERTIES
Item 2. Properties.
As of December 31, 2021, we own 118 properties with an aggregate net book value of $678.2 million. Our occupancy rate, based on square footage, was 99.2%, 98.4% and 98.1% as of December 31, 2021, 2020 and 2019, respectively.
At December 31, 2021, we participated in joint ventures that owned three properties and at such date, our investment in these unconsolidated joint ventures is $10.2 million. The occupancy rate of our joint venture properties, based on square footage, was 59.1%, 59.1% and 59.3% as of December 31, 2021, 2020 and 2019, respectively. For further information about the Manahawkin Property, including information about the related mortgage debt and re-development activities, see “-Properties Owned by Joint Ventures”, “-Mortgage Debt” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Our executive office is located at 60 Cutter Mill Road, Suite 303, Great Neck, New York. We believe that this facility is satisfactory for our current and projected needs.
Our Properties
The following table details, as of December 31, 2021, certain information about our properties (except as otherwise indicated, each property is tenanted by a single tenant):
Percentage of
Approximate
2022 Contractual
2022 Contractual
Square Footage
Rental Income
Location
Type of Property
Rental Income
of Building
per Square Foot
Fort Mill, SC
Industrial
4.4
701,595
$
4.27
Hauppauge, NY
Industrial
4.1
201,614
13.91
Baltimore, MD
Industrial
3.5
367,000
6.59
Royersford, PA(1)
Retail
3.4
194,600
12.16
El Paso, TX
Industrial
3.1
419,821
5.02
Lebanon, TN
Industrial
3.0
540,200
3.86
Secaucus, NJ
Health & Fitness
2.2
44,863
33.43
Delport, MO(2)
Industrial
2.2
339,094
4.36
Littleton, CO(3)
Retail
2.0
101,618
16.54
El Paso, TX(4)
Retail
2.0
110,179
12.44
St. Louis Park, MN(2)
Retail
1.9
131,710
9.86
McCalla, AL
Industrial
1.9
294,000
4.39
Brooklyn, NY
Office
1.9
66,000
19.24
Lowell, AR
Industrial
1.8
248,370
4.95
Fort Mill, SC
Industrial
1.8
303,188
3.99
Greensboro, NC
Theater
1.7
61,213
19.02
Joppa, MD
Industrial
1.7
258,710
4.42
Ankeny, IA(2)
Industrial
1.6
208,234
5.26
Moorestown, NJ(2)
Industrial
1.6
219,881
4.92
Englewood, CO
Industrial
1.5
63,882
15.68
Tucker, GA
Health & Fitness
1.4
58,800
16.16
Pennsburg, PA(2)
Industrial
1.4
291,203
3.23
Hamilton, OH
Health & Fitness
1.2
38,000
20.75
Greenville, SC(5)
Industrial
1.1
142,200
5.44
Indianapolis, IN
Theater
1.1
57,688
12.75
Bakersfield, CA
Industrial
1.1
218,116
3.36
Green Park, MO
Industrial
1.1
119,680
6.02
Ronkonkoma, NY(2)
Industrial
1.0
90,599
7.79
Greenville, SC(5)
Industrial
1.0
128,000
5.44
Indianapolis, IN
Industrial
1.0
125,622
5.45
Lehigh Acres, FL(2)
Industrial
1.0
103,044
6.35
Lake Charles, LA(6)
Retail-Office Supply
1.0
54,229
12.07
Huntersville, NC
Industrial
0.9
78,319
8.27
Ashland, VA
Industrial
0.9
88,003
7.29
Tyler, TX
Retail-Furniture
0.9
50,810
12.43
Memphis, TN
Industrial
0.9
224,749
2.77
Chandler, AZ
Industrial
0.9
62,121
9.84
Kennesaw, GA
Retail
0.9
32,138
18.90
Chicago, IL
Retail-Office Supply
0.9
23,939
24.37
Moorestown, NJ
Industrial
0.8
64,000
9.05
Nashville, TN(2)
Industrial
0.8
99,500
5.81
Melville, NY
Industrial
0.8
51,351
10.89
Omaha, NE
Industrial
0.8
101,584
5.37
New Hope, MN(7)
Industrial
0.8
123,892
4.89
Shakopee, MN
Industrial
0.8
114,000
4.65
Wichita, KS
Retail-Furniture
0.8
88,108
5.94
Monroe, NC
Industrial
0.7
93,170
5.53
Saco, ME
Industrial
0.7
131,400
3.77
Greenville, SC
Industrial
0.7
88,800
5.55
Cary, NC
Retail-Office Supply
0.7
33,490
14.62
Louisville, KY
Industrial
0.7
125,370
3.81
New Hyde Park, NY
Industrial
0.7
38,000
12.37
Ft. Myers, FL
Retail
0.7
29,993
15.43
Bensalem, PA(5)
Industrial
0.7
85,663
5.33
Cedar Park, TX
Retail-Furniture
0.6
72,000
6.08
Champaign, IL(2)
Retail
0.6
50,530
8.65
Rincon, GA
Industrial
0.6
95,000
4.60
Percentage of
Approximate
2022 Contractual
2022 Contractual
Square Footage
Rental Income
Location
Type of Property
Rental Income
of Building
per Square Foot
Plymouth, MN
Industrial
0.6
82,565
$
5.26
Eugene, OR
Retail-Office Supply
0.6
24,978
16.37
Deptford, NJ
Retail
0.6
25,358
15.98
Newark, DE
Other
0.6
23,547
17.00
Highland Ranch, CO(2)
Retail
0.6
42,920
9.27
El Paso, TX
Retail-Office Supply
0.5
25,000
15.20
Amarillo, TX
Retail-Furniture
0.5
72,027
5.14
Woodbury, MN
Retail
0.5
49,406
7.25
Lexington, KY
Retail-Furniture
0.5
30,173
11.69
Richmond, VA
Retail-Furniture
0.5
38,788
8.98
Virginia Beach, VA
Retail-Furniture
0.5
58,937
5.74
LaGrange, GA
Industrial
0.5
80,000
4.14
Newport, VA
Retail-Furniture
0.5
49,865
6.45
Durham, NC
Industrial
0.5
46,181
6.95
Duluth, GA
Retail-Furniture
0.5
50,260
6.19
Greensboro, NC
Retail
0.5
12,950
24.00
Fayetteville, GA
Retail-Furniture
0.4
65,951
4.64
Gurnee, IL
Retail-Furniture
0.4
22,768
13.43
Wauconda, IL
Industrial
0.4
53,750
5.65
Naples, FL
Retail-Furniture
0.4
15,912
18.70
Selden, NY
Retail
0.4
14,555
20.25
Somerville, MA
Retail
0.4
12,054
23.23
Carrollton, GA
Restaurant
0.4
6,012
46.10
Pinellas Park, FL
Industrial
0.4
53,064
5.03
Cartersville, GA
Restaurant
0.4
5,635
46.41
Hauppauge, NY
Restaurant
0.4
7,000
36.11
Richmond, VA
Restaurant
0.4
9,367
26.35
Greensboro, NC
Restaurant
0.4
6,655
36.92
Hyannis, MA
Retail
0.4
9,750
24.85
Chandler, AZ
Industrial
0.3
25,035
8.79
Kennesaw, GA
Restaurant
0.3
4,051
53.00
Myrtle Beach, SC
Restaurant
0.3
6,734
31.68
Bluffton, SC
Retail-Furniture
0.3
35,011
6.09
Everett, MA
Retail
0.3
18,572
11.43
Lawrenceville, GA
Restaurant
0.3
4,025
51.12
Bolingbrook, IL
Retail
0.3
33,111
6.10
Concord, NC
Restaurant
0.3
4,749
42.04
Cape Girardeau, MO
Retail
0.3
13,502
14.71
Miamisburg, OH
Industrial
0.3
35,707
5.48
Marston, MA
Retail
0.3
8,775
21.00
Indianapolis, IN
Restaurant
0.3
12,820
14.14
Pittston, PA(8)
Industrial
0.2
249,600
0.67
West Palm Beach, FL
Industrial
0.2
10,361
14.54
Batavia, NY
Retail
0.2
23,483
6.00
Palmyra, PA(9)
Restaurant
0.2
2,944
47.00
Reading, PA(9)
Restaurant
0.2
2,702
50.59
Reading, PA(9)
Restaurant
0.2
2,798
48.09
Trexlertown, PA(9)
Restaurant
0.2
3,004
43.89
Monroeville, PA
Retail
0.2
6,051
20.18
Cuyahoga Falls, OH
Retail
0.2
6,796
17.21
South Euclid, OH
Retail
0.2
11,672
9.94
Hilliard, OH
Retail
0.2
6,751
15.55
Port Clinton, OH
Retail
0.1
6,749
15.19
Lawrence, KS
Retail
0.1
8,600
10.17
Seattle, WA
Retail
0.1
3,053
26.06
Rosenberg, TX
Retail
0.1
8,000
9.61
Louisville, KY
Industrial
0.1
9,642
4.58
Columbus, OH(10)
Retail-Furniture
-
96,924
0.33
Crystal Lake, IL(11)
Retail
-
32,446
-
Beachwood, OH(12)
Land
-
349,999
-
Columbus, OH(13)
Industrial
-
105,191
-
100.0
10,493,169
(1) This property, a community shopping center, is leased to 11 tenants. Contractual rental income per square foot excludes 3,125 vacant square feet.
(2) This property has two tenants.
(3) This property, a community shopping center, is leased to 21 tenants. Contractual rental income per square foot excludes 26,013 vacant square feet and $150,000 of contractual rental income from a ground lease.
(4) This property has four tenants. Contractual rental income per square foot excludes 2,395 vacant square feet.
(5) This property has three tenants.
(6) This property has three tenants. Approximately 43.4% of the square footage is leased to a retail office supply operator.
(7) This property has two tenants. Contractual rental income excludes 15,128 vacant square feet.
(8) In February 2022, we entered into a 20-year lease for this property providing for an annual base rent of $1.4 million through February 2023 and increasing 3% annually thereafter.
(9) It is anticipated that this property will be sold in April 2022. See Note 5 to our consolidated financial statements.
(10) The tenant’s lease expired in January 2022 and the property is currently vacant.
(11) This property has been vacant since 2017.
(12) This property is ground leased to a multi-unit apartment complex owner/operator. 2022 contractual rental income excludes $1.3 million of variable rent as there is uncertainty as to whether and when the tenant will resume paying rent. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Challenges and Uncertainties Facing The Vue - Beachwood, Ohio” and Note 6 of our consolidated financial statements.
(13) It is anticipated that this property will be sold in April 2022. See Note 5 to our consolidated financial statements.
Properties Owned by Joint Ventures
The following table sets forth, as of December 31, 2021, information about the properties owned by joint ventures in which we are a venture partner:
Percentage of
Base Rent Payable
in 2022
Contributed by
Approximate
Type of
the Applicable
Square Footage
Base Rent
Location
Property
Joint Venture(1)
of Building
per Square Foot
Manahawkin, NJ(2)
Retail
85.3
319,349
$
8.12
Savannah, GA
Retail
12.9
46,058
4.52
Savannah, GA(3)
Restaurant
1.8
-
-
100.0
365,407
(1) Represents our share of the base rent payable in 2022 with respect to such joint venture property, expressed as a percentage of the aggregate base rent payable in 2022 with respect to all of our joint venture properties. Base rent payable in 2022 excludes $121,000 of COVID-19 rent deferral payments due from Regal Cinemas, a tenant at our Manahawkin, New Jersey property, which was not accrued to rental income.
(2) The Manahawkin Property, a community shopping center, is leased to 23 tenants. Base rent per square foot excludes 149,447 vacant square feet. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Re-development of the Manahawkin Property.”
(3) This property is used as a parking lot.
Geographic Concentration
As of December 31, 2021, the 118 properties owned by us are located in 31 states. The following table sets forth information, presented by state, related to our properties as of December 31, 2021:
Percentage of
Contractual
Contractual
Approximate
Number of
Rental
Rental
Building
State
Properties
Income
Income
Square Feet
South Carolina
$
6,592,772
9.7
1,405,528
New York
6,497,295
9.5
492,602
Texas
5,344,846
7.8
757,837
Pennsylvania
4,557,275
6.7
838,565
Georgia
3,902,187
5.7
401,872
North Carolina
3,894,843
5.7
336,727
New Jersey
3,567,078
5.2
354,102
Maryland
3,563,171
5.2
625,710
Tennessee
3,283,211
4.8
864,449
Minnesota
3,153,669
4.6
501,573
Colorado
2,800,305
4.1
208,420
Missouri
2,397,761
3.5
472,276
Virginia
1,896,260
2.8
244,960
Florida
1,832,532
2.7
212,374
Illinois
1,831,923
2.7
216,544
Indiana
1,601,233
2.3
196,130
Ohio
1,456,671
2.1
657,789
Alabama
1,289,979
1.9
294,000
Arkansas
1,230,498
1.8
248,370
Iowa
1,095,346
1.6
208,234
Massachusetts
918,849
1.3
49,151
Kentucky
874,438
1.3
165,185
Arizona
830,969
1.2
87,156
California
733,260
1.1
218,116
Louisiana
654,718
1.0
54,229
Kansas
611,119
0.9
96,708
Nebraska
545,916
0.8
101,584
Other (1)
1,383,464
2.0
182,978
$
68,341,588
100.0
10,493,169
(1) These properties are located in four states.
The following table sets forth information, presented by state, related to the properties owned by our joint ventures as of December 31, 2021:
Our Share
of the
Base Rent
Payable in 2022
Approximate
Number of
to these
Building
State
Properties
Joint Ventures
Square Feet
New Jersey
$
1,379,562
319,349
Georgia
238,156
46,058
$
1,617,718
365,407
Mortgage Debt
At December 31, 2021, we had:
● 69 first mortgages secured by 79 of our 118 properties; and
● $399.7 million of mortgage debt outstanding with a weighted average interest rate of 4.18% and a weighted average remaining term to maturity of approximately 6.4 years. Substantially all of such mortgage debt bears fixed interest at rates ranging from 3.02% to 5.50% and contains prepayment penalties.
The following table sets forth scheduled principal mortgage payments due on our properties as of December 31, 2021 (dollars in thousands):
PRINCIPAL
YEAR
PAYMENTS DUE
$
44,843
25,774
62,634
42,615
29,277
Thereafter
194,517
Total
$
399,660
At December 31, 2021, the first mortgage on the Manahawkin Property, the only joint venture property with mortgage debt, had an outstanding principal balance of $22.1 million, carries an annual interest rate of 4% and matures in July 2025. This mortgage contains a prepayment penalty. The following table sets forth the scheduled principal mortgage payments due for this property as of December 31, 2021 (dollars in thousands):
PRINCIPAL
YEAR
PAYMENTS DUE
$
19,601
-
Total
$
22,105
The mortgages on our properties (including properties owned by joint ventures) are generally non-recourse, subject to standard carve-outs.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings.
Not applicable.

---

ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures.
Not applicable.
Part II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Our common stock is listed on the New York Stock Exchange under the symbol “OLP.” As of March 1, 2022, there were approximately 243 holders of record of our common stock.
We qualify as a REIT for Federal income tax purposes. In order to maintain that status, we are required to distribute to our stockholders at least 90% of our annual ordinary taxable income. The amount and timing of future distributions will be at the discretion of our board of directors and will depend upon our financial condition, earnings, business plan, cash flow and other factors. We intend to make distributions in an amount at least equal to that necessary for us to maintain our status as a real estate investment trust for Federal income tax purposes.
Issuer Purchases of Equity Securities
We did not repurchase any shares of our outstanding common stock in 2021. We are authorized to repurchase up to $7.5 million in shares of our common stock.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. [Reserved.]

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
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 of industrial, retail, restaurant, health and fitness and theater properties, many of which are subject to long-term leases. Most of our leases are “net leases” under which the tenant, directly or indirectly, is responsible for paying the real estate taxes, insurance and ordinary maintenance and repairs of the property. As of December 31, 2021, we own, in 31 states, 121 properties, including three properties owned by consolidated joint ventures and three properties owned through unconsolidated joint ventures.
Challenges and Uncertainties Related to the COVID-19 Pandemic
The COVID-19 pandemic had, and continues to have, a significant impact on the global economy, the U.S. economy, and the economies of the local markets in which our properties are located. The preventative measures taken to address the pandemic, and the economic consequences resulting therefrom, have affected, and will continue to affect, our tenants to varying degrees depending on, among other things, the location of the subject property, the nature of the tenant and use of the property (i.e., industrial or non-industrial), with theater, health and fitness, restaurant and retail properties having been, and continuing to be, significantly adversely affected.
The pandemic and its impact on the economic, financial, and capital markets environments present material risks and uncertainties. We are unable to predict the ultimate impact that the pandemic and its direct and indirect consequences will have on us, which will depend largely on future developments relating to many factors outside of our control. Our business, income, cash flow, results of operations, financial condition, liquidity, prospects, ability to service our debt, and ability to pay cash dividends to our stockholders, has been and may continue to be adversely affected by the pandemic.
General Challenges and Uncertainties
In addition to the challenges and uncertainties presented by the pandemic, and as also described under “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors”, we, among other things, face additional challenges and uncertainties, which are heightened by the pandemic, 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; or acquire or dispose of properties on acceptable terms. Over the past several years, we have sold more properties than we have acquired, the rental income generated by the acquired properties have not fully replaced the income generated by the sold properties and the return on investment on acquired properties has been less than that generated by the sold properties. Furthermore, many of the properties we have sold have been retail properties which generally have generated greater returns than the industrial properties we have been acquiring. As a result of, among other things, the foregoing, the portion of our dividends allocated to ordinary income (as opposed to capital gain and return of capital) has decreased from 88% in 2018 to 43% for 2021. See Note 15 to our consolidated financial statements. If these trends continue over the longer-term, we may be unable to sustain our current level of dividend payments.
We generally seek to manage the risk of our real property portfolio and the related financing arrangements by (i) diversifying among industries, locations, tenants, scheduled lease expirations, mortgage maturities and lenders, and types of properties (for example, industrial, retail, theaters, health and fitness, although over the past several years, we have focused on acquiring industrial properties), and (ii) minimizing our exposure to interest rate fluctuations. As a result, as of December 31, 2021:
● our 2022 contractual rental income is derived from the following property types: 57.8% from industrial, 27.4% from retail, 4.9% from restaurant, 4.7% from health and fitness, 2.8% from theater and 2.4% from other properties,
● there are eight states with properties that account for five percent or more of 2022 contractual rental income, and no state accounts for more than 9.7% of 2022 contractual rental income,
● there are two tenants (i.e., Havertys Furniture and FedEx) that account for more than five percent of 2022 contractual rental income and those tenants account for 11.3% of contractual rental income.
● through 2030, there are two years in which the percentage of our 2022 contractual rental income represented by expiring leases exceeds 10% (i.e., 14.6% in 2023 and 18.2% in 2027)-approximately 20.9% of our 2022 contractual rental income is represented by leases expiring in 2030 and thereafter,
● after giving effect to interest rate swap agreements, substantially all of our mortgage debt bears interest at fixed rates,
● in 2022, 2023 and 2024, 11.2%, 6.4% and 15.7% of our total scheduled principal mortgage payments (i.e., amortization and balances due at maturity) is due, respectively, and
● there are three different counterparties to our portfolio of interest rate swaps: two counterparties, rated A- or better by a national rating agency, account for 93.6%, or $53.2 million, of the notional value of our swaps; and one counterparty, rated A- by another rating provider, accounts for 6.4%, or $3.7 million, of the notional value of such swaps.
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, 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, 2024, 58 leases for 55 tenants at 40 properties representing $16.6 million, or 24.2%, of 2022 contractual rental income expire. The following table provides information, as of December 31, 2021, regarding the leases that expire during the three years ending December 31, 2024 (with respect to the multi-tenant shopping center in Lakewood, Colorado, which have both retail and restaurant tenants, we have allocated the property count and associated mortgage debt to the retail (and not restaurant) categories because this is a mixed-use property):
Weighted Average
Remaining
Percentage of
Percentage of
Percentage of
Mortgage
Number of
Number of
Lease Term to
2022 Contractual
2021 Rental
2020 Rental
Debt
Type of Property
Properties
Tenants
Maturity (months)
Rental Income
Income (1)
Income (1)
Outstanding
Industrial
14.4
14.6
14.1
$
85,690
Retail (2)
6.3
7.9
7.8
60,059
Restaurant
0.5
0.5
0.5
n/a
Health & Fitness
1.1
1.0
1.0
4,282
Theater
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Other
1.9
1.6
1.6
n/a
24.2
25.6
25.0
$
150,031
__________
(1) For 2021 and 2020, the percentage of rental income excludes tenant reimbursement income of $10.9 million and $10.5 million, respectively.
(2) Retail includes all our retail subcategories.
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 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.
We are sensitive to the risks facing the retail industry as a result of the growth of e-commerce. Over the past several years, we have been addressing our exposure to the retail industry by focusing on acquiring industrial properties (including warehouse and distribution facilities) and properties that we believe capitalize on e-commerce activities - since September 2016, we have not acquired any retail properties and have sold 16 retail properties. As a result of the focus on industrial properties and the sale of retail properties, retail properties generated 30.2%, 32.9%, 35.2% and 41.9%, of rental income, net, in 2021, 2020, 2019 and 2018, respectively, and industrial properties generated 57.0%, 55.4%, 48.7% and 40.1%, of rental income, net, in 2021, 2020, 2019, and 2018, respectively.
At December 31, 2021, we have variable rate debt in the principal amount of $68.6 million (i.e., $56.9 million of mortgage debt and $11.7 million of credit facility debt) that bear interest at the one-month LIBOR rate plus a negotiated spread. This mortgage debt is hedged through interest rate swaps and the credit facility debt is not hedged. The authority regulating LIBOR announced it intends to stop compelling banks to submit rates for the circulation of LIBOR after June 2023 and it is possible that LIBOR will become unavailable at an earlier date. As approximately $51.2 million of this mortgage debt and the related notional amount of the interest rate swaps mature after June 2023, there is uncertainty as to how the interest rate on this variable rate debt and the related swaps will be determined when LIBOR is unavailable.
Challenges and Uncertainties Facing Certain Properties and Tenants
The Vue - Beachwood, Ohio
A multi-family complex, which we refer to as The Vue, ground leases from us the underlying land located in Beachwood, Ohio. For the past several years, the property has faced, and we anticipate that the property will continue to face, occupancy and financial challenges. As a result, the rental income generated by the property has declined significantly over the past several years (i.e., from $1.4 million in 2018 to $0 in 2021). After giving effect to debt service, the property is operating on a negative cash flow basis, and we anticipate that such trend will continue for an extended period. The tenant has not paid the aggregate $1.7 million of rent for October 2020 through March 2022 that would have been due had it generated specified levels of positive operating cash flow and we anticipate this non-payment of rent trend will continue for an extended period. As a result of the challenges faced by this property, in November 2020, we agreed, subject to our discretion, to fund 78% of any operating expense shortfalls (including the tenant’s debt service payments) and capital expenditures required at the property. We estimate that in 2022, we will provide approximately $700,000 in funding for this property. During 2021 (through March 1, 2022), we provided The Vue with $2.0 million to cover, among other things, operating cash flow shortfalls and capital expenditures. At December 31, 2021, (i) there are no unbilled rent receivables, intangibles or tenant origination costs associated with this property and (ii) the net book value of our land subject to this ground lease is $15.8 million and is subordinate to $66.0 million of mortgage debt incurred by the owner/operator. Our cash flow will be adversely impacted by our funding of additional capital expenditures and operating expense shortfalls (including the tenant’s debt service payments) at the property, the tenant’s continuing non-payment of rent or, if the tenant does not pay its debt service, our payment of the tenant’s debt service obligation. We may incur a substantial impairment charge with respect to this property if we determine that the property is impaired. See Note 6 to our consolidated financial statements.
Re-development of the Manahawkin Property
We continue to refine our efforts, which commenced in 2018, to re-develop the Manahawkin Property, which is owned by an unconsolidated joint venture in which we have a 50% equity interest. As a result, the income and cash flow from this property is currently significantly less than it was several years ago and at December 31, 2021, the occupancy rate was 53.2%. In 2021, the property’s carrying costs (including debt service payments) exceeded the property’s operating cash flow by approximately $142,000. To date, no construction has begun in connection with the re-development and there is significant uncertainty as to the form the re-development will take, whether and when the re-development will be completed, the costs to complete the re-development and as to the prospects for this property because of, among other things, the (i) decrease in rent and occupancy, (ii) possibility that co-tenancy clauses could be triggered if certain significant tenants vacate or otherwise cease operations, (iii) possibility that tenants that have informally agreed to participate in the re-development may abandon the project in light of, among other things, the extended delay in completing a re-development or challenges facing the retail environment, (iv) difficulty in obtaining financing for the project, (v) significantly greater labor and material costs than those projected at the time the re-development was initiated due, among other things, to inflation and supply chain delivery issues, and (vi) the continuing delay in completing the re-development. As of December 31, 2021, our share of the capitalized costs, (primarily soft costs) related to the re-development is $571,000. Our net income and cash flow have been negatively impacted by the re-development and our net income, cash flow and financial condition will be adversely affected if significant tenants such as Regal Cinemas do not continue paying rent or the re-development is further delayed or not completed. See “-Liquidity and Capital Resources.”
Round Rock Guaranty Litigation
In 2019, we sued the guarantor of the lease at our former property in Round Rock, Texas, which we refer to as the “Round Rock Property”, at which the tenant obtained bankruptcy protection and terminated its lease. (The lawsuit (the “Lawsuit”) is captioned: OLP Wyoming Springs, LLC, Plaintiff, v. Harden Healthcare, LLC, Defendant, v Benjamin Hanson, Intervenor, District Court of Williamson County, Texas, Cause No. 18-1511-C368). On February 21, 2022, we and the defendant entered into a settlement agreement with respect to the Lawsuit which provides that if we receive approximately $5.4 million (the “Settlement Amount”) by April 15, 2022, the parties to such agreement, among other things, will (i) seek to dismiss with prejudice all of the claims by and between the parties to the agreement, (ii) seek dismissal of the Lawsuit with prejudice and (iii) release each other and certain other persons from claims and liabilities with respect to matters pertaining to the Lawsuit. If the Settlement Amount is not paid by April 15, 2022, we and the defendant may continue to pursue and assert all of our respective rights, claims and defenses against each other.
2021 and Recent Developments
In 2021:
● we acquired three industrial properties for an aggregate purchase price of $24.3 million. These properties account for $1.7 million, or 2.5%, of our 2022 contractual rental income.
● we sold five properties (i.e., three retail and two restaurant), for an aggregate net gain on sale of real estate of $25.5 million, without giving effect to $848,000 of mortgage prepayment costs. The properties sold accounted for $1.1 million, or 1.3%, and $2.1 million, or 2.5%, of 2021 and 2020 rental income, net, respectively.
● as the lease is expiring in June 2022, we entered into an agreement to sell an industrial property in Columbus, Ohio for a sale price of $8.5 million and anticipate this transaction will be completed in April 2022. This property generated $749,000 of rental income, net, and incurred operating expenses of $164,000 (including depreciation and amortization expense of $66,000) in 2021. We anticipate that we will recognize a $6.9 million gain from this sale in the quarter ending June 30, 2022.
● we entered into, amended or extended 35 leases with respect to approximately 2.4 million square feet, including:
- leases with Havertys Furniture, our most significant tenant, which extended for four-to-nine-years from the August 2022 expiration date, the lease term on ten of the eleven properties (after giving effect to a lease entered into in February 2022 with respect to one property (the “February Lease”)), it leases from us. (In January 2022, we entered into a contract to sell the eleventh property, subject to the satisfaction of, among other things, the purchaser’s due diligence review). We also agreed to invest up to $3.1 million for tenant improvements, of which $1.5 million was funded through March 1, 2022. As of December 31, 2021, after giving effect to the February Lease, the weighted average remaining lease term is 6.2 years and rental income from this tenant is anticipated to be approximately $4.6 million, $4.1 million and $4.1 million in 2022, 2023 and 2024, respectively.
- lease amendments with Regal Cinemas pursuant to which (i) we deferred an aggregate of $1.4 million of rent (which was originally payable from September 2020 through August 2021) and the tenant agreed to pay such sum in equal monthly installments from January 2022 through June 2023 (and through February 2022, all such payments had been made), (ii) the tenant agreed to pay, and paid, an aggregate of $441,000 of rent from September 2020 through August 2021, and (iii) the parties extended the lease for the Indianapolis, Indiana property for two years from December 2030 to December 2032.
- a five-year lease extension (through 2027) with a property tenanted by FedEx, which property accounts for 1.3% of 2022 contractual rental income, for an annual base rent of $868,000 through August 2022, $848,000 through August 2023, and increasing 2.5% annually thereafter.
- a six-year lease extension (through 2028) with The Toro Company, which accounts for 3.1% of 2022 contractual rental income, for annual base rent of $2.0 million through June 2022, $2.2
million through June 2023, and increasing 3% annually thereafter.
● we collected $2.7 million, or 99.7%, of the rent that we deferred in response to the pandemic and that was due in 2021.
Subsequent to December 31, 2021, we:
● acquired a 53,000 square foot industrial property in Fort Myers, Florida for a purchase price of $8.1 million and after the acquisition, obtained $4.9 million nine-year mortgage debt with an interest rate of 3.09% and amortizing over 25 years. The property is leased through 2030 and provides for an annual base rent of $443,000, with annual increases of 3.8% beginning in 2023. We anticipate that in 2022, this property will contribute $438,000 of base rent.
● entered into an agreement to sell four restaurant properties in Pennsylvania for a sales price of $10.0 million and anticipate this transaction will be completed in April 2022. These properties generated $525,000 of rental income, net, and incurred operating expenses of $100,000 (including depreciation and amortization expense of $59,000) and mortgage interest expense of $116,000 in 2021. We anticipate that we will recognize a $4.7 million gain from this sale in the quarter ending June 30, 2022.
● in connection with the expiration of the lease in February 2022, re-leased our industrial property in Pittston, Pennsylvania to The Lion Brewery for 20-years for an annual base rent of $1.4 million through February 2023, and increasing 3% annually thereafter.
● collected $189,000, or 99.8%, of the deferred rent that was due and payable in January and February 2022.
Comparison of Years Ended December 31, 2021 and 2020
Results of Operations -
Revenues
The following table compares total revenues for the periods indicated:
Year Ended
December 31,
Increase
(Dollars in thousands)
(Decrease)
% Change
Rental income, net
$
82,180
$
81,888
$
0.4
Lease termination fees
3,633.3
Total revenues
$
82,740
$
81,903
$
1.0
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)
(Decrease)
% Change
Acquisitions (1)
$
2,761
$
1,811
$
52.5
Dispositions (2)
1,108
3,457
(2,349)
(67.9)
Same store (3)
78,311
76,620
1,691
2.2
Rental income, net
$
82,180
$
81,888
$
0.4
(1) The 2021 column represents rental income from properties acquired since January 1, 2020; the 2020 column represents rental income from properties acquired during the year ended December 31, 2020.
(2) The 2021 column represents rental income from properties sold during the year ended December 31, 2021; the 2020 column represents rental income from properties sold since January 1, 2020.
(3) Represents rental income from 113 properties that were owned for the entirety of the periods presented.
Changes due to acquisitions and dispositions
The year ended December 31, 2021 reflects a decrease of $2.3 million due to the inclusion, in 2020, of rental income from properties sold during 2020 and 2021 (including $1.4 million from four properties sold in 2020). This decrease was offset by a $950,000 increase generated by properties acquired in 2020 and 2021 (including $313,000 from two properties acquired in 2020).
Changes at same store properties
The increase is due to:
● the inclusion, in 2020, of a $1.1 million non-cash write-off against rental income of the entire unbilled rent receivable balance related to the two Regal Cinema properties,
● a $1.1 million increase in collections of rent income (of which $218,000 was due in 2020 but unpaid and unaccrued and $96,000 was deferred from 2020) from the two Regal Cinema properties, at which rent has been recorded on a cash basis since October 2020 (see Note 3 to our consolidated financial statements),
● a $377,000 increase in tenant reimbursements, of which $324,000 relates to operating expenses and $53,000 represents a net increase in real estate taxes generally incurred in the same period, after giving effect to a $148,000 real estate tax refund we received and that is payable to the tenant,
● a $369,000 increase in rental income from leasing vacant space at our Greenville, South Carolina industrial property, and
● an increase, net of various decreases, of $173,000 from various tenants, primarily due to new tenants and lease amendments and extensions.
Offsetting the increase are decreases of:
● $729,000 in variable rent from The Vue,
● $385,000 due to the inclusion, in 2020, of an increase in straight-line rental income related to lease extensions at the two Regal Cinema properties, and
● $200,000 resulting from a lease amendment for a Men’s Wearhouse distribution center at our Bakersfield, California property.
Lease termination fees.
In 2021, we recognized $560,000 in connection with the exercise by three tenants of lease termination options.
Operating Expenses
The following table compares operating expenses for the periods indicated:
Year Ended
December 31,
Increase
(Dollars in thousands)
(Decrease)
% Change
Operating expenses:
Depreciation and amortization
$
22,832
$
22,964
$
(132)
(0.6)
General and administrative
14,310
13,671
4.7
Real estate expenses
13,802
13,634
1.2
State taxes
(19)
(6.1)
Impairment due to casualty loss
-
(430)
n/a
Total operating expenses
$
51,235
$
51,009
$
0.4
Depreciation and amortization. The decrease is due primarily to the inclusion in 2020 of (i) $518,000 from the properties sold since January 1, 2020 and (ii) $247,000 of improvements and tenant origination costs at several properties that prior to December 31, 2021 were fully amortized. The decrease was offset primarily from (i) $490,000 of depreciation and amortization expense on the properties acquired in 2021 and 2020 (including
$344,000 from properties acquired in 2021) and (ii) $120,000 of depreciation in 2021 from improvements at several properties.
General and administrative. The increase in 2021 is primarily due to increases in non-cash compensation expense of (i) $542,000 due to the re-assessment of the achievability of market and performance metrics related to the RSUs and (ii) $205,000, of which $157,000 was due to the retirement of a non-management director in June 2021 and the related accelerated vesting of such director’s restricted stock awards. The increase was offset due to the inclusion, in 2020, of $152,000 of professional fees primarily related to changes to our charter, offering of securities and compensation determinations.
Real estate expenses.
The increase is due primarily to increases at same store properties of :
● $297,000 in real estate operating expense for several properties, including a $102,000 increase in snow removal expense and a $100,000 increase in management fees paid to Majestic Property, a related party, due to the collection of deferred rent,
● $249,000 in real estate tax expense for several properties, none of which were individually significant, and
● $162,000 in insurance expense for several properties, which represents expense reimbursed to Gould Investors, a related party, none of which were individually significant.
In addition, there was a $107,000 increase from properties acquired in 2020 and 2021, including $82,000 from a property acquired in 2021.
Offsetting the increase are decreases of:
● $415,000 in the Round Rock litigation expense, and
● $148,000 due to a real estate tax refund (see “- Revenues - Changes at same store properties” ).
A substantial portion of real estate expenses are rebilled to tenants and are included in Rental income, net, on the consolidated statements of income, other than the expenses related to the Round Rock litigation.
Impairment due to casualty loss.
In August 2020, a building at our Lake Charles, Louisiana property was damaged due to a hurricane and we wrote-off $430,000, representing the carrying value of the damaged portion of the building. See “- Other income” for information about the insurance recoveries received, and to be received, with respect to this impairment.
Gain on sale of real estate, net
The following table compares gain on sale of real estate, net:
Year Ended
December 31,
Increase
(Dollars in thousands)
(Decrease)
% Change
Gain on sale of real estate, net
$
25,463
$
17,280
$
8,183
47.4
See “-2021 and Recent Developments” and Note 5 to our consolidated financial statements for information regarding our sales of real estate.
Other Income and Expenses
The following table compares other income and expenses for the periods indicated:
Year Ended
December 31,
Increase
(Dollars in thousands)
(Decrease)
% Change
Other income and expenses:
Equity in earnings of unconsolidated joint ventures
$
$
$
431.6
Equity in earnings from sale of unconsolidated joint venture properties
565.3
Prepayment costs on debt
(901)
(1,123)
(222)
(19.8)
Other income
75.2
Interest:
Expense
(17,939)
(19,317)
(1,378)
(7.1)
Amortization and write-off of deferred financing costs
(970)
(976)
(6)
(0.6)
Equity in earnings of unconsolidated joint ventures. The increase in 2021 is primarily due to an increase at our Manahawkin Property resulting from (i) higher rent income from several tenants for which there were abatements and unaccrued deferrals in 2020 and (ii) a decrease in real estate taxes, net of amounts rebilled to tenants, due to a lower assessment. These increases were offset by an increase in depreciation and amortization expense primarily for improvements to the property.
Equity in earnings from sale of unconsolidated joint venture properties. The 2021 results represent a gain of $805,000 from the sale of a portion of a joint venture’s property in Savannah, Georgia. The 2020 results represent a gain of $121,000 from the sale of another joint venture’s property in Savannah, Georgia.
Prepayment costs on debt. The 2021 expense includes $799,000 incurred in connection with the sale of the West Hartford, Connecticut property. The 2020 expense includes $833,000 incurred in connection with the sale of the Knoxville, Tennessee property and $290,000 incurred in connection with the sale of the Onalaska, Wisconsin property.
Other income. Other income in 2021 and 2020 include $695,000 and $430,000, respectively, of property insurance recoveries related to our Lake Charles, Louisiana property damaged in an August 2020 hurricane. In February 2022, we received a final payment of $918,000 of additional insurance proceeds related to this property. In addition, 2021 includes a $100,000 fee obtained in connection with an assignment of a lease.
Interest expense. The following table summarizes interest expense for the periods indicated:
Year Ended
December 31,
Increase
(Dollars in thousands)
(Decrease)
% Change
Interest expense:
Mortgage interest
$
17,521
$
18,580
$
(1,059)
(5.7)
Credit line interest
(319)
(43.3)
Total
$
17,939
$
19,317
$
(1,378)
(7.1)
Mortgage interest
The following table reflects the average interest rate on the average principal amount of outstanding mortgage debt during the applicable year:
Year Ended
December 31,
Increase
(Dollars in thousands)
(Decrease)
% Change
Average interest rate
4.22
%
4.20
%
0.02
%
0.5
Average principal amount
$
416,914
$
441,529
$
(24,615)
(5.6)
The decrease in mortgage interest in 2021 is due to the net decrease in the principal amount of mortgage debt outstanding which resulted from scheduled amortization payments, and, primarily in connection with property sales, the payoff of mortgages.
Credit facility interest
The following table reflects the average interest rate on the average principal amount of outstanding credit line debt during the applicable year:
Year Ended
December 31,
Increase
%
(Dollars in thousands)
(Decrease)
Change
Average interest rate
1.86
%
2.53
%
(0.67)
%
(26.5)
Average principal amount
$
10,179
$
22,505
$
(12,326)
(54.8)
The decrease in credit line interest in 2021 is primarily due to a decrease of $12.3 million in the weighted average balance outstanding under our line of credit and, to a lesser extent, a 67 basis point decrease in the weighted average interest rate due to decreases in the one month LIBOR rate.
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 from FFO for our straight-line rent accruals and amortization of lease intangibles, deducting lease termination and certain other non-recurring fees and adding back amortization of restricted stock and restricted stock unit compensation expense, amortization of costs in connection with our financing activities (including our share of our unconsolidated joint ventures), income on insurance recoveries from casualties and debt prepayment costs. Since the NAREIT White Paper does not provide guidelines for computing AFFO, the computation of AFFO may vary 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 predictability 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 to us in evaluating potential property acquisitions.
FFO and AFFO do not represent net income or cash flows from operations as defined by GAAP. FFO and AFFO and should not be considered to be an alternative to net income as a reliable measure of our operating performance; nor should FFO and AFFO be considered 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.
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):
GAAP net income attributable to One Liberty Properties, Inc.
$
38,857
$
27,407
Add: depreciation and amortization of properties
22,395
22,558
Add: our share of depreciation and amortization of unconsolidated joint ventures
Add: impairment due to casualty loss
Add: amortization of deferred leasing costs
Add: our share of amortization of deferred leasing costs of unconsolidated joint ventures
Deduct: gain on sale of real estate, net
(25,463)
(17,280)
Deduct: equity in earnings from sale of unconsolidated joint venture properties
(805)
(121)
Adjustments for non-controlling interests
(88)
NAREIT funds from operations applicable to common stock
36,094
33,876
Deduct: straight-line rent accruals and amortization of lease intangibles
(1,019)
(1,408)
Deduct: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures
(10)
(73)
Deduct: lease termination fee income
(560)
(15)
Deduct: lease assignment fee income
(100)
-
Add: amortization of restricted stock and RSU compensation expense
5,433
4,686
Add: prepayment costs on debt
1,123
Deduct: income on insurance recoveries from casualty loss
(695)
(430)
Add: amortization and write-off of deferred financing costs
Add: our share of amortization and write-off of deferred financing costs of unconsolidated joint ventures
Adjustments for non-controlling interests
Adjusted funds from operations applicable to common stock
$
41,047
$
38,755
GAAP net income attributable to One Liberty Properties, Inc.
$
1.85
$
1.33
Add: depreciation and amortization of properties
1.06
1.12
Add: our share of depreciation and amortization of unconsolidated joint ventures
0.03
0.03
Add: impairment due to casualty loss
-
0.02
Add: amortization of deferred leasing costs
0.02
0.02
Add: our share of amortization of deferred leasing costs of unconsolidated joint ventures
-
-
Deduct: gain on sale of real estate, net
(1.21)
(0.85)
Deduct: equity in earnings from sale of unconsolidated joint venture properties
(0.04)
(0.01)
Adjustments for non-controlling interests
0.01
-
NAREIT funds from operations per share of common stock
1.72
1.66
Deduct: straight-line rent accruals and amortization of lease intangibles
(0.06)
(0.08)
Deduct: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures
-
-
Deduct: lease termination fee income
(0.03)
-
Deduct: lease assignment fee income
-
-
Add: amortization of restricted stock and RSU compensation expense
0.26
0.23
Add: prepayment costs on debt
0.04
0.06
Deduct: income on insurance recoveries from casualty loss
(0.03)
(0.02)
Add: amortization and write-off of deferred financing costs
0.05
0.05
Add: our share of amortization and write-off of deferred financing costs of unconsolidated joint ventures
-
-
Adjustments for non-controlling interests
-
-
Adjusted funds from operations per share of common stock
$
1.95
$
1.90
The $2.2 million, or 6.5%, increase in FFO is due to:
●a $1.4 million decrease in interest expense,
●a $545,000 increase in lease termination fee income,
●a $373,000 increase in other income, and
●a $292,000 net increase in rental income.
Offsetting the increase is a $639,000 increase (net of a $152,000 decrease of professional fees from 2020) in general and administrative expense.
See “-Comparison of Years Ended December 31, 2021 and 2020” for further information regarding these changes.
The $2.3 million, or 5.9%, increase in AFFO is due to the increase in FFO as described above and:
●the exclusion from AFFO of a $747,000 increase in general and administrative expense related to non-cash compensation expense of RSUs and restricted stock, and
●the addition to AFFO of $389,000 in rental income (i.e., the straight-line rent accruals in the 2020 period were higher than the accruals in the 2021 period due primarily to a lease extension at a property at which the tenant was provided a rent abatement in the 2020 period).
The increase in AFFO was offset by the exclusion from AFFO of:
●the $545,000 increase in lease termination fee income, and
●$366,000 of the increase in other income.
See “-Comparison of Years Ended December 31, 2021 and 2020” for further information regarding these changes.
Diluted per share FFO and AFFO were impacted negatively in the year ended December 31, 2021 by an average increase from December 31, 2020 of approximately 671,000 in the weighted average number of shares of common stock outstanding as a result of issuances of stock in-lieu of a portion of cash dividends and the equity incentive, at-the-market equity offering and dividend reinvestment programs.
Comparison of Years Ended December 31, 2020 and 2019
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.
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 2021, we obtained approximately $31.0 million of net proceeds from property sales (after giving effect to $20.4 million of mortgage debt repayments, $848,000 of debt prepayment costs and $414,000 which represents a non-controlling interest’s share on the net proceeds of a consolidated joint venture property) and $10.6 million of proceeds from mortgage financings. Our available liquidity at March 4, 2022 was approximately $97.9 million, including approximately $12.6 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 $85.3 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 $2.2 million of capital and other expenditures for Havertys Furniture and The Vue) from the foregoing, as well as property financings, property sales and sales of our common stock. We and our joint venture partner are also re-developing the Manahawkin Property - however, because the re-development plan is being refined, we are not providing an estimate of the re-development costs or the time frame within which the re-development will be completed.
The following table sets forth, as of December 31, 2021, information with respect to our mortgage debt that is payable from January 2022 through December 31, 2024 (excluding the mortgage debt of our unconsolidated joint venture):
(Dollars in thousands)
Total
Amortization payments
$
13,253
$
12,801
$
11,940
$
37,994
Principal due at maturity
31,590
12,973
50,694
95,257
Total
$
44,843
$
25,774
$
62,634
$
133,251
At December 31, 2021, an unconsolidated joint venture had a first mortgage on its property (i.e., the Manahawkin Property) with an outstanding balance of approximately $22.1 million, bearing interest at 4.0% per annum and maturing in July 2025.
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 2022 through 2024. We intend to repay the amounts not refinanced or extended from our existing funds and sources of funds, including our available cash, proceeds from 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, since each of our encumbered properties is subject to a non-recourse mortgage (with standard carve-outs), if our in-house evaluation of the market value of such property is less than the principal balance outstanding on the mortgage loan, we may determine to convey, in certain circumstances, such property to the mortgagee in order 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.
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 $30.0 million and 30% of the borrowing base subject to a cap of (i) $10.0 million for renovation purposes and (ii) $20.0 million for operating expense purposes. These limits will apply through June 30, 2022. On July 1, 2022, the maximum amounts we can borrow for renovation expenses and operating expenses will change to $20.0 million and $10.0 million, respectively, and to the extent that either of these maximums is exceeded as of June 30, 2022, such excess must be repaid immediately. See “-Liquidity and Capital Resources”. The facility matures December 31, 2022 and bears interest equal to the one month LIBOR rate 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 300 basis points if such ratio is greater than 65%. The applicable margin was 175 and 200 basis points for 2021 and 2020, respectively. 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 2021, the weighted average interest rate on the facility was approximately 1.86% and as of February 28, 2022, the rate on the facility was 1.88%.
The terms of our credit facility include certain restrictions and covenants which 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 total 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.
Material Contractual Obligations
The following sets forth our material contractual obligations as of December 31, 2021:
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
$
29,605
$
51,897
$
39,224
$
74,700
$
195,426
Mortgages payable-balances due at maturity
31,590
63,667
51,242
145,609
292,108
Credit facility(1)
11,700
-
-
-
11,700
Purchase obligations(2)
3,864
7,780
6,909
18,813
Total
$
76,759
$
123,344
$
97,375
$
220,569
$
518,047
(1) Represents the amount outstanding at December 31, 2021. We may borrow up to $100.0 million pursuant to such facility, subject to compliance with borrowing base requirements. At December 31, 2021, after giving effect to such borrowing base requirements, $88.3 million was available to be borrowed. The facility expires December 31, 2022. See “-Credit Facility”.
(2) Assumes that $3.4 million will be payable annually during the next five years pursuant to the compensation and services agreement. Excludes (i) capital and other expenditures to be incurred in the ordinary course of business in connection with tenant improvements (including $1.5 million in connection with the Havertys Furniture lease extensions), (ii) amounts to be expended in connection with the re-development of the Manahawkin Property, for which we are not providing an estimate and (iii) an estimated $700,000 for funding capital expenditures and operating cash flow shortfalls at The Vue, of which $145,000 was funded in 2022. See “-General Challenges and Uncertainties,” “-Challenges and Uncertainties Facing Certain Properties and Tenants-The Vue”, and “-Challenges and Uncertainties Facing Certain Properties and Tenants -Re-development of the Manahawkin Property”.
As of December 31, 2021, we had $399.7 million of mortgage debt outstanding (excluding mortgage debt of our unconsolidated joint venture), 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 $81.5 million due through 2024 will be paid primarily from cash generated from our operations. We anticipate
that principal balances due at maturity through 2024 of $95.3 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.
Inflation
We are exposed to inflation risk as income from long-term leases is the primary source of our cash flows from operations. Approximately 76% of our leases contain provisions intended to mitigate the impact of inflation. These provisions generally increase rental rates during the terms of the leases either at fixed rates or indexed escalations (based on the Consumer Price Index or other measures). 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 provisions may not adequately offset the effects of inflation.
Inflation may also affect the overall cost of our unhedged debt (i.e., primarily debt incurred pursuant to our credit facility) and mortgage debt we may incur in the future. (The interest rate risk associated with substantially all of our current mortgage debt is either mitigated through long-term fixed interest rate loans and interest rate hedges). Increasing interest rates on acquisition mortgage debt limits the acquisition opportunities we can pursue and reduces the prices at which we sell our properties.
Cash Distribution Policy
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. Even if we qualify for federal taxation as a REIT, we may be 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.
It is our 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.
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, projections of our REIT taxable income, net income, funds from operations, and adjusted funds from operations.
Critical Accounting Estimates
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 accounting principles generally accepted in the United States ("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.
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.
Revenue Recognition
Our main source of revenue is rental income from our tenants. Rental income 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 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.
Purchase Accounting for Acquisition of Real Estate
The fair value of real estate acquired is allocated to acquired tangible assets, consisting of land and building, and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases and other value of in-place leases based in each case on their fair values. The fair value of the tangible assets of an acquired property (which includes land, building and building improvements) 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 relative fair values of these assets. We assess fair value of the lease intangibles 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 likely to be exercised 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.
Carrying Value of Real Estate Portfolio
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 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.

---

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Our primary market risk exposure is the effect of changes in interest rates on the interest cost of draws on our revolving variable rate credit facility and the effect of changes in the fair value of our interest rate swap agreements. Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations and other factors beyond our control.
We use interest rate swaps to limit interest rate risk on variable rate mortgages. These swaps are used for hedging purposes-not for speculation. We do not enter into interest rate swaps for trading purposes. At December 31, 2021, our aggregate liability in the event of the early termination of our swaps was $1.6 million.
At December 31, 2021, we had 19 interest rate swap agreements outstanding. The fair market value of the interest rate swaps is dependent upon existing market interest rates and swap spreads, which change over time. As of December 31, 2021, if there had been an increase of 100 basis points in forward interest rates, the fair market value of the interest rate swaps would have increased by approximately $1.3 million and the net unrealized loss on derivative instruments would have decreased by $1.3 million. If there were a decrease of 100 basis points in forward interest rates, the fair market value of the interest rate swaps would have decreased by approximately $1.3 million and the net unrealized loss on derivative instruments would have increased by $1.3 million. These changes would not have any impact on our net income or cash.
Our variable mortgage debt, after giving effect to the interest rate swap agreements, bears interest at fixed rates and accordingly, the effect of changes in interest rates would not impact the amount of interest expense that we incur under these mortgages.
Our variable rate credit facility is sensitive to interest rate changes. At December 31, 2021, a 100 basis point increase of the interest rate on this facility would increase our related interest costs by approximately $117,000 per year and a 100 basis point decrease of the interest rate would decrease our related interest costs by approximately $12,000 per year.
The fair market value of our long-term debt is estimated based on discounting future cash flows at interest rates that our management believes reflect the risks associated with long-term debt of similar risk and duration.
The following table sets forth our debt obligations by scheduled principal cash flow payments and maturity date, weighted average interest rates and estimated fair market value at December 31, 2021:
For the Year Ended December 31,
Fair
Market
(Dollars in thousands)
Thereafter
Total
Value
Fixed rate:
Long-term debt
$
44,843
$
25,774
$
62,634
$
42,615
$
29,277
$
194,517
$
399,660
$
419,354
Weighted average interest rate
4.02
%
4.29
%
4.39
%
4.30
%
4.01
%
4.13
%
4.18
%
3.20
%
Variable rate:
Long-term debt(1)
$
11,700
$
-
$
-
$
-
$
-
$
-
$
11,700
$
11,700
(1) Our credit facility matures on December 31, 2022 and bears interest at the 30 day LIBOR rate plus the applicable margin. The applicable margin varies based on the ratio of total debt to total value. See “Item 7. Management’s Discussion and Analysis of Financial Conditions and Results of Operations-Liquidity and Capital Resources-Credit Facility.”

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data.
This information appears in Item 15(a) of this Annual Report on Form 10-K, and is incorporated into this Item 8 by reference thereto.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Not applicable.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
A review and evaluation was performed by our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Annual Report on Form 10-K. Based on that review and evaluation, our CEO and CFO have concluded that our disclosure controls and procedures, as designed and implemented as of December 31, 2021, were effective.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, a company’s principal executive and principal financial officers and effected by a company’s board, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:
● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of a company;
● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of a company are being made only in accordance with authorizations of management and the board of directors of a company; and
● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of a company’s assets that could have a material effect on the financial transactions.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this assessment, our management used criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013).
Based on its assessment, our management concluded that, as of December 31, 2021, our internal control over financial reporting was effective based on those criteria.
Changes in Internal Controls over Financial Reporting
There have been no changes in our internal controls over financial reporting, as defined in in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, that occurred during the three months ended December 31, 2021 that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information.
Adoption of 2022 Incentive Plan
In March 2022, our board of directors adopted, subject to stockholder approval, the 2022 Incentive Plan. This plan permits us to grant: (i) stock options, restricted stock, restricted stock units, performance share awards and any one or more of the foregoing, up to a maximum of 750,000 shares; and (ii) cash settled dividend equivalent rights in tandem with the grant of certain awards.
Board Realignment
To more equally balance the membership of our three classes of directors, Karen A. Till on March 10, 2022, resigned as a Class 2 director (with a term expiring at our 2023 annual meeting of stockholders) effective as of the 2022 annual meeting of stockholders (the “Annual Meeting”) and contingent on her nomination and election at the Annual Meeting as a Class 3 director (with a term expiring at our 2025 annual meeting of stockholders). In addition, our board, effective as of the Annual Meeting, reduced (i) the number of members on the board to nine director positions and (ii) the Class 2 director positions (with a term expiring in 2023) to three directors.
Tax Disclosure Update
The section of our prospectus dated August 13, 2020 included in our prospectus supplement dated August 13, 2020 entitled “Federal Income Tax Considerations - Impact of the Tax Cuts and Jobs Act on the Company and its Stockholders- Limitations on Interest Deductibility; Real Property Trades or Businesses Can Elect Out Subject to Longer Asset Cost Recovery Periods:” is hereby superseded, and is amended and restated in its entirety to read as follows:
“Limitations on Interest Deductibility; Real Property Trades or Businesses Can Elect Out Subject to Longer
Asset Cost Recovery Periods: The Tax Cuts and Jobs Act, which was signed into law on December 22, 2017 (the “Tax Act” or the “Act”) limits a taxpayer’s net interest expense deduction to 30% of the sum of adjusted taxable income, business interest, and certain other amounts. Adjusted taxable income does not include items of income or expense not allocable to a trade or business, business interest or expense, the new deduction for qualified business income, NOLs, and for years prior to 2022, deductions for depreciation, amortization, or depletion. For partnerships, the interest deduction limit is applied at the partnership level, subject to certain adjustments to the partners for unused deduction limitation at the partnership level. The Act allows a real property trade or business to elect out of this interest limit so long as it uses a 40-year recovery period for nonresidential real property, a 30-year recovery period for residential rental property (40 year recovery period for residential rental property placed in service before 2018), and a 20-year recovery period for related improvements described below. The Consolidated Appropriations Act, 2021, which was signed into law on December 27, 2020, decreased the 40-year recovery period for residential rental property placed in service before 2018 to a 30-year recovery period. Disallowed interest expense is carried forward indefinitely (subject to special rules for partnerships).”

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance.
Apart from certain information concerning our executive officers which is set forth in Part I of this Annual Report, additional information required by this Item 10 shall be included in our proxy statement for our 2022 annual meeting of stockholders, to be filed with the SEC not later than May 2, 2022, and is incorporated herein by reference.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation.
The information required by this Item 11 will be included in our proxy statement for our 2022 annual meeting of stockholders, to be filed with the SEC not later than May 2, 2022, and is incorporated herein by reference.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Apart from the equity compensation plan information required by Item 201(d) of Regulation S-K which is set forth below, the information required by this Item 12 will be included in our proxy statement for our 2022 annual meeting of stockholders, to be filed with the SEC not later than May 2, 2022 and is incorporated herein by reference.
Equity Compensation Plan Information
As of December 31, 2021, the only equity compensation plan under which equity compensation may be awarded is our 2019 Incentive Plan, which was approved by our stockholders in June 2019. This plan permits us to grant stock options, restricted stock, restricted stock units and performance based awards to our employees, officers, directors, consultants and other eligible participants. The following table provides information as of December 31, 2021 about shares of our common stock that may be issued upon the exercise of options, warrants and rights under our 2019 Incentive Plan:
Number of
securities
remaining available
Number of
for future issuance
securities
Weighted average
under equity
to be issued
exercise price
compensation
upon exercise
of outstanding
plans (excluding
of outstanding
options,
securities
options, warrants
warrants
reflected in
Plan Category
and rights(1)
and rights
column(a))(2)
(a)
(b)
(c)
Equity compensation plans approved by security holders
230,752
-
218,648
Equity compensation plans not approved by security holders
-
-
-
Total
230,752
-
218,648
(1) Represents shares of common stock issuable pursuant to restricted stock units (“RSUs”). The shares of common stock underlying these units vest, if and to the extent specified performance (i.e., average annual return on capital) and/or market (i.e., average annual total stockholder return) conditions are satisfied by June 30, 2022, 2023 and 2024, respectively. Excludes 294,200 shares of restricted stock issued pursuant to our 2019 Incentive Plan as such shares, although subject to forfeiture, are outstanding. See Note 12 to our consolidated financial statements.
(2) Gives effect to the 294,200 shares of restricted stock issued and outstanding pursuant to the 2019 Incentive Plan. Does not give effect to 153,575 shares of restricted stock granted January 12, 2022 pursuant to our 2019 Incentive Plan.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this Item 13 will be included in our proxy statement for our 2022 annual meeting of stockholders, to be filed with the SEC not later than May 2, 2022 and is incorporated herein by reference.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accountant Fees and Services.
The information required by this Item 14 will be included in our proxy statement for our 2022 annual meeting of stockholders, to be filed with the SEC not later than May 2, 2022 and is incorporated herein by reference.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits and Financial Statement Schedules.
(a) Documents filed as part of this Report:
(1) The following financial statements of the Company are included in this Annual Report on Form 10-K:
-Report of Independent Registered Public Accounting Firm (PCAOB ID 00042)
through
-Statements:
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
through
Notes to Consolidated Financial Statements
through
(2) Financial Statement Schedules:
-Schedule III-Real Estate and Accumulated Depreciation
through
All other schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or the notes thereto.
(b) Exhibits:
1.1
Equity Offering Sales Agreement, dated August 19, 2020 by and between One Liberty Properties, Inc., D.A. Davidson & Co. and B. Riley FBR, Inc. (incorporated by reference to Exhibit 1.1 to our Current Report on Form 8-K filed on August 19, 2020).
3.1
Articles of Amendment and Restatement of One Liberty Properties, Inc (incorporated by reference to Exhibit 3.1 to our Annual Report on Form 10-K for the year ended December 31, 2020).
3.2
Amended and Restated By-Laws of One Liberty Properties, Inc. (incorporated by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021).
4.1
Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-2, Registration No. 333-86850, filed on April 24, 2002 and declared effective on May 24, 2002).
4.2*
One Liberty Properties, Inc. 2016 Incentive Plan (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016).
4.3*
One Liberty Properties, Inc. 2019 Incentive Plan (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed June 13, 2019).
4.4
Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.5 to our Annual Report on Form 10-K for the year ended December 31, 2020).
10.1
Third Amended and Restated Loan Agreement dated as of November 9, 2016, between VNB New York, LLC, People’s United Bank, Bank Leumi USA and Manufacturers and Traders Trust Company, as lenders, and One Liberty Properties, Inc. (the “Loan Agreement”) (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed November 10, 2016).
10.2
First Amendment to Loan Agreement dated July 1, 2019 (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019).
10.3
Second Amendment to Loan Agreement dated as of July 8, 2020 (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed July 14, 2020).
10.4
Third Amendment to Loan Agreement dated as of March 3, 2021 (incorporated by reference to Exhibit 10.4 to our Annual Report on Form 10-K for the year ended December 31, 2020).
10.5*
Compensation and Services Agreement effective as of January 1, 2007 between One Liberty Properties, Inc. and Majestic Property Management Corp. (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on March 14, 2007).
10.6*
First Amendment to Compensation and Services Agreement effective as of April 1, 2012 between One Liberty Properties, Inc. and Majestic Property Management Corp. (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012).
10.7*
Form of Restricted Stock Award Agreement for awards granted in 2017 pursuant to the 2016 Incentive Plan (incorporated by reference to Exhibit 10.12 to our Annual Report on Form 10-K for the year ended December 31, 2016).
10.8*
Form of Performance Award Agreement for grants in 2017 pursuant to the 2016 Incentive Plan (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017).
10.9*
Form of Restricted Stock Award Agreement for awards granted in 2018 and 2019 pursuant to the 2016 Incentive Plan (incorporated by reference to Exhibit 10.7 of our Annual Report on Form 10-K for the year ended December 31, 2017).
10.10*
Form of Performance Award Agreement for grants in 2018 pursuant to the 2016 Incentive Plan (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2018).
10.11*
Form of Performance Award Agreement for grants in 2019 and 2020 pursuant to the 2019 Incentive Plan (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019).
10.12*
Form of Restricted Stock Award Agreement for awards granted in 2020 and 2021 pursuant to the 2019 Incentive Plan (incorporated by reference to Exhibit 10.11 to our Annual Report on Form 10-K for the year ended December 31, 2019).
10.13*
Form of Performance Award Agreement for grants in 2021 pursuant to the 2019 Incentive Plan (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2021).
21.1
Subsidiaries of the Registrant
23.1
Consent of Ernst & Young LLP
31.1
Certification of President and Chief Executive Officer
31.2
Certification of Senior Vice President and Chief Financial Officer
32.1
Certification of President and Chief Executive Officer
32.2
Certification of Senior Vice President and Chief Financial Officer
The following financial statements, notes and schedule from the One Liberty Properties, Inc. Annual Report on Form 10-K for the year ended December 31, 2021 filed on March 11, 2022, formatted in Inline XBRL: (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Changes in Equity; (v) Consolidated Statements of Cash Flows; (vi) Notes to the Consolidated Financial Statements; and (vii) Schedule III - Consolidated Real Estate and Accumulated Depreciation.
Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document and included in Exhibit 101).
*
Indicates a management contract or compensatory plan or arrangement.
The file number for all the exhibits incorporated by reference is 001- 09279 other than exhibit 4.1 whose file number is 333-86850.