UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 5, 2006
ONE LIBERTY PROPERTIES, INC.
----------------------------
(Exact name of Registrant as specified in charter)
Maryland 001-09279 13-3147497
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(State or other (Commission file No.) (IRS Employer
jurisdiction of I.D. No.)
incorporation)
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
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(Address of principal executive offices) (Zip code)
516-466-3100
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Registrant's telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
__ Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
__ Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
__ Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
__ Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.01. Completion of Acquisition or Disposition of Assets.
On October 5, 2006 eight entities wholly-owned by two joint ventures of
the registrant (the registrant holds a 50% equity interest in each joint
venture) and a wholly-owned subsidiary of the registrant consummated, in one
transaction with a single purchaser, the sale of nine real properties. Each
property is improved with a movie theater. The aggregate sales price of
$151,885,000 was paid in cash at the closing, of which $136,658,000 is
attributable to the eight properties owned by entities wholly-owned by the two
joint ventures, and $15,227,000 to the one property owned by registrant's
wholly-owned subsidiary. The registrant estimates that the joint ventures will
realize a gain on sale, after expenses, fees and brokerage commissions, of
approximately $49,315,000 (of which 50%, or approximately $24,657,000, will be
attributable to the registrant). Registrant will also realize a gain, after
expenses, fees and brokerage commissions, of approximately $3,678,000 on the one
property sold by its wholly-owned subsidiary. The joint ventures paid a
prepayment premium of $9,683,000 (of which 50%, or approximately $4,842,000 will
be attributable to the registrant) on the outstanding mortgages secured by the
properties which were sold. The prepayment premiums will be reported as interest
expense for financial reporting purposes and are not reflected as an expense or
fees in calculating the gains reported above.
The registrant anticipates that it will defer the taxable gain of
approximately $3,800,000 on the one property sold by its wholly-owned subsidiary
through a tax deferred exchange under Section 1031 of the Internal Revenue Code
using the sales proceeds to acquire one or more replacement properties. There
can be no assurance that the registrant will be able to locate suitable
replacement properties to effectuate such tax deferred exchange.
The two joint ventures will pay a broker's commission in connection
with the sale of the eight movie theaters in an amount estimated to be
$1,367,000 to Majestic Property Management Corp. (a company wholly-owned by the
registrant's Chairman of the Board and Chief Executive Officer and in which
certain of registrant's officers are officers), 50% of which will be borne by
the registrant and 50% by the joint venture partner. The commission is included
as an expense in calculating the gain reported above. Included in the expenses
related to the sale of the property by the registrant's wholly-owned subsidiary
is a broker's commission estimated to be $152,000 to be paid to Majestic
Property Management Corp., which is included as an expense in calculating the
gain reported above.
The sale was effectuated pursuant to a Contract of Sale reported by the
registrant in a Current Report on Form 8-K filed with the Securities and
Exchange Commission on June 16, 2006. The purchaser is ECM Diversified Income
and Growth Fund, LLC, which is unrelated to the registrant.
On September 14, 2006, the registrant reported on a Current Report on
Form 8-K the consummation of the sale by a 50% owned joint venture of a movie
theater property located in Brooklyn, New York for a consideration of
$16,000,000. After closing expenses and brokerage commissions to an unrelated
third party, the joint venture will recognize a gain of approximately
$6,588,000, of which $3,294,000 will be attributable to the registrant. The
joint venture paid a premium of $831,000 (of which $415,000 will be attributable
to the registrant) in connection with the prepayment of the mortgage secured by
this property, which will be reported as interest expense for financial
reporting purposes and is not reflected as an expense or fees in calculating the
gains reported above.
The amounts estimated or approximated in this Current Report on Form
8-K are based upon information currently available and is subject to change
based upon further analysis, including final calculation of expenses and closing
fees and other adjustments that may be required.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro Forma Financial Information.
(i) Pro Forma Consolidated Balance Sheet (Unaudited)
as of June 30, 2006.
(ii) Pro Forma Consolidated Income Statement (Unaudited)
for the year ended December 31, 2005.
(iii) Pro Forma Consolidated Income Statement (Unaudited)
for the six months ended June 30, 2006.
(iv) Notes to Pro Forma Consolidated Balance Sheet and Income
Statements (Unaudited).
(c) Shell Company Transactions.
Not applicable.
(d) Exhibits.
99.1 Press release of registrant dated October 5, 2006.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ONE LIBERTY PROPERTIES, INC.
Date: October 11, 2006 By: /s/ Simeon Brinberg
-----------------------
Simeon Brinberg
Senior Vice President
One Liberty Properties, Inc.
Pro Forma Consolidated Financial Statements
(Unaudited)
On September 13, 2006, a joint venture in which One Liberty Properties, Inc.
(the "Company") holds a 50% equity interest, sold its Brooklyn, New York theater
to a third party. On October 5, 2006, the Company sold one theater and the
Company's two 50% owned theater joint ventures sold eight theaters to a single
purchaser, a different third party than the one to whom the Brooklyn, New York
property was sold. After the sales, the two joint ventures do not own any
operating theaters. A wholly-owned subsidiary of the Company continues to own
one movie theater in its portfolio.
The unaudited pro forma consolidated balance sheet of the Company as of June 30,
2006, has been prepared as if the Company's sale of all ten theater properties
(the "Properties") had been consummated on June 30, 2006. The unaudited pro
forma consolidated statements of income for the year ended December 31, 2005 and
the six months ended June 30, 2006 are presented as if the Company's sale of the
Properties had occurred on January 1, 2005 and the effect was carried forward
through June 30, 2006.
The pro forma consolidated financial statements do not purport to represent what
the Company's financial position or results of operations would have been
assuming the completion of the Company's sale of the Properties had occurred on
January 1, 2005, nor do they purport to project the Company's financial position
or results of operations at any future date or for any future period. The pro
forma consolidated financial statements should be read in conjunction with the
Company's 2005 annual report on Form 10-K and the Company's Quarterly Report on
Form 10-Q for the period ended June 30, 2006.
One Liberty Properties, Inc.
Pro Forma Consolidated Balance Sheet (Unaudited)
As of June 30, 2006
(Amounts in thousands)
Pro Forma Adjustments
---------------------
Nine Brooklyn, NY The
The Company Movie Movie Company
Historical Theaters Theater Pro Forma
(A) (B) (C) (F) as Adjusted
---------- ----------- ---------- -----------
Assets
Real estate investments, at cost:
Land $ 62,829 $ - $ - $ 62,829
Buildings 266,306 - - 266,306
--------- --------- --------- ---------
329,135 - - 329,135
Less accumulated depreciation 24,664 - - 24,664
--------- --------- --------- ---------
304,471 - - 304,471
Investment in unconsolidated joint ventures 27,311 (18,879) (D) (1,121) (G) 7,311
Cash and cash equivalents 7,433 44,100 (D) 4,000 (G) 55,533
Unbilled rent receivable 7,447 (142) (C) - 7,305
Property held for sale 11,097 (11,097) (C) - -
Escrow, deposits and other receivables 1,530 - - 1,530
Investment in BRT Realty Trust (related party) 771 - - 771
Deferred financing costs 3,059 (78) (C) - 2,981
Other assets 1,345 - - 1,345
Unamortized intangible lease assets 4,337 (36) (C) - 4,301
--------- --------- -------- ---------
$ 368,801 $ 13,868 $ 2,879 $ 385,548
========= ========= ======== =========
Liabilities and stockholders' equity
Mortgages payable $ 198,020 $ (6,716) (D) $ - $ 191,304
Line of credit 2,000 (2,000) (D) - -
Dividends payable 3,277 - - 3,277
Accrued expenses and other liabilities 4,047 - - 4,047
Unamortized intangible lease liabilities 5,632 - - 5,632
--------- --------- -------- ---------
Total liabilities 212,976 (8,716) - 204,260
--------- --------- -------- ---------
Commitments and contingencies - - - -
Stockholders' equity:
Preferred stock - - - -
Common stock 9,789 - - 9,789
Paid-in capital 133,957 - - 133,957
Accumulated other comprehensive income 833 - 833
Accumulated undistributed net income 11,246 22,584 (E) 2,879 (H) 36,709
--------- --------- -------- ---------
Total stockholders' equity 155,825 22,584 2,879 181,288
--------- --------- -------- ---------
$ 368,801 $ 13,868 $ 2,879 $ 385,548
========= ========= ======== =========
See accompanying notes.
One Liberty Properties, Inc.
Pro Forma Consolidated Income Statement (Unaudited)
For the Year Ended December 31, 2005
(Amounts in thousands, except per share data)
Pro Forma Adjustments
---------------------
The
The Company Nine Brooklyn, NY Company
Historical Movie Movie Pro Forma
(A) Theaters Theater as Adjusted
---------- -------- ------- -----------
Revenues:
Rental income $ 28,445 $ (1,213)(B) $ - $ 27,232
--------- --------- --------- ---------
Operating expenses:
Depreciation and amortization 5,664 (232) (B) - 5,432
General and administrative 4,140 - - 4,140
Real estate expenses 352 (8) (B) - 344
Leasehold rent 308 - - 308
--------- --------- --------- ---------
10,464 (240) - 10,224
--------- --------- --------- ---------
Operating income 17,981 (973) - 17,008
Other income and expenses:
Equity in earnings (loss) of unconsol-
idated joint ventures 2,102 (2,292) (C) (572) (D) (762)
Interest and other income 314 - - 314
Interest:
Expense (10,192) 708 (B) - (9,484)
Amortization of deferred
financing costs (732) 6 (B) - (726)
Gain on sale of air rights 10,248 - - 10,248
--------- --------- --------- --------
Income from continuing operations $ 19,721 $ (2,551) $ (572) $ 16,598
========= ========= ========= ========
Income from continuing operations
per common share
basic and diluted: (E) $2.00 $1.69
===== =====
See accompanying notes.
One Liberty Properties, Inc.
Pro Forma Consolidated Income Statement (Unaudited)
For the Six Months Ended June 30, 2006
(Amounts in thousands, except per share data)
Pro Forma Adjustments
---------------------
The
The Company Nine Brooklyn, NY Company
Historical Movie Movie Pro Forma
(A) Theaters (B) Theater as Adjusted
---------- ------------ ------------ -----------
Revenues:
Rental income $ 15,843 $ - $ - $ 15,843
--------- --------- -------- ---------
Operating expenses:
Depreciation and amortization 3,263 - - 3,263
General and administrative 2,687 - - 2,687
Real estate expenses 135 - - 135
Leasehold rent 154 - - 154
--------- --------- --------- ---------
6,239 - - 6,239
--------- --------- --------- ---------
Operating income 9,604 - - 9,604
Other income and expenses:
Equity in earnings of unconsol-
idated joint ventures 1,678 (1,226)(C) (235) (E) 217
Interest and other income 260 - - 260
Interest:
Expense (5,907) 36 (D) - (5,871)
Amortization of deferred
financing costs (290) - - (290)
Gain on sale of option to
purchase property 227 - - 227
--------- --------- --------- --------
Income from continuing operations $ 5,572 $ (1,190) $ (235) $ 4,147
========= ========= ========= =========
Income from continuing operations
per common share
basic and diluted: (F) $.56 $.42
==== ====
See accompanying notes.
One Liberty Properties, Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
1. Notes to Pro Forma Consolidated Balance Sheet as of June 30, 2006
(A) To reflect the unaudited consolidated balance sheet of One Liberty
Properties, Inc. (the "Company") as of June 30, 2006, as reported on the
Company's Quarterly Report on Form 10-Q.
(B) To reflect the sale of eight movie theaters owned by entities wholly-owned
by two joint ventures of the Company, in which the Company holds a 50% equity
interest. After the sale, one of the joint ventures will not own any assets and
the other joint venture will own one parcel of vacant land and marketable
securities. The Company still owns an investment in four other unconsolidated
joint ventures which each own one property.
(C) To reflect the sale of the Company's movie theater located in Chula Vista,
California, which was held for sale at June 30, 2006 and the corresponding other
assets relating thereto.
(D) To reflect the cash proceeds from the sale of the Company's wholly-owned
movie theater ("Chula Vista, California Theater") and the sale of the eight
movie theater properties owned by the joint ventures ("Joint Venture Theaters").
(Amounts in thousands.)
Chula Vista,
California Joint Venture
Theater Theaters
------- --------
Sales price $ 15,227 $136,658
Repayment of mortgage (6,716) (51,313)
Broker's commission (1) (152) (1,367)
Other transactional fees (44) (488)
Prepayment premium and fees (10) (9,683)
Pay off line of credit (2,000) -
-------- --------
Remaining cash proceeds 6,305 $ 73,807
========
Company's anticipated share of
proceeds from Joint Venture
Theaters, including its share of
excess cash held at the joint ventures 37,795 $ 37,795
--------
Net cash proceeds $ 44,100
========
Company's anticipated equity in net
earnings on sale of theaters 18,916 (E)
--------
Reduction in investment in
unconsolidated joint ventures $ 18,879
========
(1) Estimated broker's commission of $1,519,000 (1% of the gross
sales price) to be paid to a company wholly-owned by the Chairman of the Board
of Directors and Chief Executive Officer and in which certain executive offices
of the Company are officers.
(E) To reflect the anticipated net earnings and equity in net earnings resulting
from the sale of all nine movie theaters. (Amounts in thousands.)
Joint Venture Theaters:
-----------------------
Sales price $ 136,658
Broker's commission (1,367) (2)
Other transactional fees (488)
Basis of assets sold (85,488)
---------
Total gain before prepayment premium and fees 49,315
Prepayment premium and fees (9,683)
---------
Net 39,632
Company's equity share 50%
---------
19,816
Adjustment to remaining basis in investment
in unconsolidated joint venture (900) (3)
---------
Anticipated equity in net earnings - Joint Venture Theaters 18,916
Anticipated net earnings - Chula Vista, California Theater 3,668 (1)
---------
Anticipated net earnings and equity
in net earnings on sale of theaters $ 22,584 (4)
=========
(1) Chula Vista, California Theater:
--------------------------------
Sales price $ 15,227
Broker's commission (152) (2)
Other transactional fees (44)
Basis of assets sold (11,353)
---------
Total gain before prepayment premium and fees 3,678
Prepayment premium and fees (10)
---------
Anticipated net earnings on sale of theater $ 3,668
=========
(2) Estimated broker's commission of $1,519,000 (1% of the gross
sales price) to be paid to a company wholly-owned by the Chairman of the Board
of Directors and Chief Executive Officer and in which certain executive offices
of the Company are officers.
(3) To reflect the adjustment for the difference between the
carrying amount of the Company's investment in one joint venture and the
underlying equity in net assets of such joint venture.
(4) To be reflected in Company's fourth fiscal quarter.
(F) To reflect the sale of the Brooklyn, New York movie theater ("Brooklyn, New
York Theater") owned by one of the Company's 50% owned joint ventures.
(G) To reflect the cash proceeds from the sale of the Brooklyn, New York movie
theater. (Amounts in thousands.)
Brooklyn, New York Theater:
--------------------------
Sales price $ 16,000
Repayment of mortgage (5,135)
Broker's commission (400) (1)
Other transactional fees (484)
Prepayment premium and fees (831)
---------
Remaining cash proceeds -
Brooklyn, New York Theater $ 9,150
=========
Company's share of proceeds $ 4,000
Company's anticipated equity in net
earnings on sale of theater 2,879 (2) (H)
---------
Reduction in investment in
unconsolidated joint venture $ 1,121
=========
(1) Paid to an unrelated third party.
(2) To be reflected in Company's third fiscal quarter.
(H) To reflect the anticipated equity in net earnings resulting from the sale of
the Brooklyn, New York movie theater. (Amounts in thousands.)
Brooklyn, New York Theater:
---------------------------
Sales price $ 16,000
Broker's commission (400) (1)
Other transactional fees (484)
Basis of assets sold (8,528)
---------
Total gain before prepayment premium 6,588
Prepayment premium (831)
---------
Net 5,757
Company's equity share 50%
---------
Anticipated equity in net earnings on sale of theater $ 2,879 (2)
=========
(1) Paid to an unrelated third party.
(2) To be reflected in Company's third fiscal quarter.
2. Notes to Pro Forma Consolidated Income Statement for the Year Ended December
31, 2005
(A) To reflect the consolidated historical income statement of the Company for
the year ended December 31, 2005, as reported on the Company's Form 10-K.
(B) To reflect the removal of the results of operations for the Company's movie
theater property in Chula Vista, California, as if it was sold on January 1,
2005. In addition, to adjust for interest expense which would be avoided as a
result of the sale had the sale occurred on January 1, 2005.
(C) To reflect the removal of the Company's equity share of the income derived
from the eight movie theaters sold by two of the Company's joint ventures as if
they were sold on January 1, 2005.
(D) To reflect the removal of the Company's equity share of income derived from
the Brooklyn, New York movie theater sold by one of the Company's joint ventures
as if it was sold on January 1, 2005.
(E) Basic net income per common share is calculated based on approximately
9,838,000 weighted average common shares outstanding and diluted net income per
common share is calculated based on approximately 9,843,000 weighted average
common shares and common share equivalents outstanding.
3. Notes to Pro Forma Consolidated Income Statement for the Six Months Ended
June 30, 2006
(A) To reflect the consolidated historical income statement of the Company for
the six months ended June 30, 2006, as reported on the Company's Quarterly
Report on Form 10-Q.
(B) There are no adjustments for the results of operations for the Company's
movie theater in Chula Vista, California since its operations were categorized
as discontinued operations on the Company's Form 10-Q for the six months ended
June 30, 2006.
(C) To reflect the removal of the Company's equity share of the income derived
from the eight movie theaters sold by two of the Company's joint ventures as if
they were sold on January 1, 2005.
(D) To adjust for interest expense which would be avoided as a result of the
sale had the sale occurred on January 1, 2005.
(E) To reflect the removal of the Company's equity share of income derived from
the Brooklyn, New York movie theater sold by one of the Company's joint ventures
as if it was sold on January 1, 2005.
(F) Basic net income per common share is calculated based on approximately
9,912,000 weighted average common shares outstanding and diluted net income per
common share is calculated based on approximately 9,916,000 weighted average
common shares and common share equivalents outstanding.
EXHIBIT 99.1
ONE LIBERTY PROPERTIES, INC.
60 Cutter Mill Road - Suite 303
Great Neck, New York 11021
www.onelibertyproperties.com
Telephone 516.466.3100
Telecopier 516.466.3132
ONE LIBERTY JOINT VENTURES AND ONE LIBERTY
SELL MOVIE THEATER PROPERTIES
Great Neck, New York - October 5, 2006 - One Liberty Properties, Inc. (NYSE:OLP)
announced that eight entities (each wholly-owned by one of two separate joint
ventures in which One Liberty holds a 50% equity interest), and a separate,
wholly-owned subsidiary of One Liberty, closed today on the sale of nine movie
theater properties in a single transaction to one purchaser. The aggregate
purchase price was $151.9 million ($15.2 million of which was allocated to One
Liberty's wholly-owned property and the balance of $136.7 million to the joint
ventures' properties) and was paid in cash. One Liberty estimates that the sale
with respect to its wholly-owned property will result in a gain, net of closing
expenses and brokerage fees, of approximately $3.6 million and One Liberty's net
gain with respect to the sale of the joint ventures' properties is approximately
$24.5 million (a gain to the joint venture of approximately $49 million, net of
closing expenses and brokerage fees). In September 2006, a joint venture in
which One Liberty has a 50% equity interest sold to another purchaser its
Brooklyn, New York movie theater for $16 million, resulting in a gain, after
closing expenses and brokerage fees to One Liberty, of approximately $3.25
million (a net gain to the joint venture of approximately $6.5 million). In
order to consummate these transactions, the joint ventures paid $10.5 million in
prepayment premiums to their mortgage lenders, including a premium related to
the Brooklyn theater. The prepayment premium will be reflected as interest
expense. With the completion of the sale of these movie theaters, the Company
has sold its interest in all but one of the movie theaters in its portfolio,
which is owned by a One Liberty wholly-owned subsidiary. The estimated amounts
indicated above are based upon information currently available to Management and
may be subject to change upon further analysis, including final calculation of
expenses and closing fees and other adjustments that may subsequently be
required.
One Liberty anticipates that the gain of $3.6 million in connection with the
sale of the wholly-owned property will be deferred for income tax purposes
through a 1031 tax-deferred exchange, using the sale proceeds to acquire one or
more replacement properties. However, it can make no assurance that it will be
able to locate suitable replacement properties to effectuate such tax-deferred
exchange.
Patrick J. Callan, Jr., President of One Liberty, commented "this sale bears out
One Liberty's investment strategy of focusing on quality properties that are
well located." One Liberty is a New York-based REIT that specializes in the
acquisition and ownership of a diverse portfolio of real estate properties under
long term net leases. One Liberty's leases generally provide for contractual
rent increases with all operating expenses and most or all other property
related expenses paid by the tenant. For more information on One Liberty, please
visit our website at www.onelibertyproperties.com.
Caution Concerning Forward-Looking Statements: Materials included in this filing
may contain "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that could
cause actual results to be materially different from historical results or from
any future results expressed or implied by such forward-looking statements.
Statements that include the words "may," "will," "would," "could," "should,"
"believes," "estimates," "projects," "potential," "expects," "plans,"
"anticipates," "intends," "continues," "forecast," "designed," "goal," or the
negative of those words or other comparable words should be considered uncertain
and forward-looking.
Contact: Mark Lundy - 516.466.3100