In a recent development, One Liberty Properties Inc . (NYSE:OLP), a real estate investment trust (REIT) specializing in acquiring, owning, and managing a diverse portfolio of properties, has announced its entry into an agreement to purchase two industrial properties in Theodore, Alabama. The transaction, valued at $49 million, was reported on November 19, 2024, and disclosed in a Form 8-K filing with the Securities and Exchange Commission (SEC).
The acquisition involves two properties, encompassing a total of 371,586 square feet of industrial space situated on approximately 31 acres. Each property is leased to two tenants, generating an aggregate annual base rent of around $3.1 million. The leases include annual rent increases ranging from 2.3% to 3.5%, with a weighted average remaining lease term of about seven years.
The REIT plans to finance the purchase with a combination of cash on hand and a ten-year $29 million mortgage. The mortgage is structured with interest-only payments for the first five years, followed by amortization over a 30-year schedule, at an interest rate of 6.12%. The completion of the acquisition is subject to customary closing conditions, which include a satisfactory due diligence investigation by One Liberty Properties.
The company anticipates that the transaction will be finalized in early 2025, although it cautions that there can be no assurance of this timeline being met. This disclaimer is part of the cautionary statement concerning forward-looking statements included in the filing, which advises investors that actual results may differ due to various risks and uncertainties.
In other recent news, One Liberty Properties, Inc. has declared a quarterly dividend of $0.45 per share, marking its 127th consecutive quarterly dividend. This reaffirms the company's commitment to shareholder returns. Recent developments also show One Liberty Properties actively managing its real estate portfolio with a focus on industrial assets. Analyst firm B.Riley maintained a Buy rating on the company's stock and increased the shares target to $26.00, citing active capital recycling as a beneficial strategy.
The company reported $23.0 million in property dispositions during the recent quarter, alongside the acquisition of two industrial properties for a total of $11.7 million. One Liberty also sold a vacant retail property in Georgia for $6.7 million, a net gain of $2.1 million.
This aligns with the company's strategy of selling retail properties to fund the acquisition of industrial assets. In terms of leasing activities, One Liberty renegotiated a lease with Fitness International, LLC, extending it through 2040 and increasing annual rent.
InvestingPro Insights
One Liberty Properties' recent acquisition aligns well with its strategic focus on industrial properties, which is reflected in the company's financial metrics and market performance. According to InvestingPro data, OLP has a market capitalization of $623.01 million and is trading near its 52-week high, with the current price at 97.75% of its peak. This suggests investor confidence in the company's growth strategy.
InvestingPro Tips highlight that OLP has maintained dividend payments for 34 consecutive years, demonstrating a commitment to shareholder returns. This is particularly relevant given the company's current dividend yield of 6.25%, which may attract income-focused investors. Additionally, OLP's liquid assets exceed short-term obligations, indicating financial stability as it undertakes this significant $49 million acquisition.
The company's strong market performance is evident in its impressive price total returns, with a 55.58% return over the past year and a 28.96% return over the last six months. These figures support the InvestingPro Tip that OLP has shown high returns over the last year, potentially making it an attractive option for growth-oriented investors.
For those interested in a deeper analysis, InvestingPro offers 5 additional tips that could provide further insights into OLP's investment potential.
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