UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-KA
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 16, 2005
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ONE LIBERTY PROPERTIES, INC.
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(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)
Registrant's telephone number, including area code 516-466-3100
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Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
(i) Report of Independent Registered Public Accounting Firm 1
(ii) Statement of Revenues and Certain Expenses 2
(iii) Notes to Statement of Revenues and Certain Expenses 3-4
(b) Pro Forma Financial Information Statements (Unaudited).
(i) Pro Forma Consolidated Financial Statements (Unaudited) 5
(ii) Pro Forma Consolidated Balance Sheet (Unaudited) 6
(iii) Pro Forma Consolidated Income Statements (Unaudited) 7-8
(iv) Notes to Pro Forma Consolidated Income Statements (Unaudited) 9-10
(c) Shell Company Transactions.
Not Applicable
(d) Exhibits.
Not Applicable
SIGNATURES
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 thereunto duly authorized.
ONE LIBERTY PROPERTIES, INC.
Dated: Great Neck, NY By: /s/ David W. Kalish
November 3, 2005 -----------------------
David W. Kalish
Senior Vice President and
Chief Financial Officer
Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
One Liberty Properties, Inc.
We have audited the statement of revenues and certain expenses of 45 Waterview
Boulevard as described in Note 1 to be acquired by OLP Parsippany LLC, a wholly
owned subsidiary of One Liberty Properties, Inc. (the "Company") for the year
ended December 31, 2004. The statement of revenues and certain expenses is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this statement of revenues and certain expenses based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the statement
of revenues and certain expenses is free of material misstatement. We were not
engaged to perform an audit of the Company's internal control over financial
reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues and certain expenses, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall statement
of revenues and certain expenses presentation. We believe that our audit
provides a reasonable basis for our opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with Rule 3-14 of Regulation S-X of the Securities and
Exchange Commission for inclusion in Form 8-K/A of One Liberty Properties, Inc.
and is not intended to be a complete presentation of 45 Waterview Boulevard's
revenues and certain expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses of
45 Waterview Boulevard as described in Note 1 for the year ended December 31,
2004, in conformity with U.S. generally accepted accounting principles.
New York, New York /s/ Ernst & Young LLP
August 26, 2005
1
45 Waterview Boulevard
Statement of Revenues and Certain Expenses
Six months ended For the year ended
June 30, December 31,
2005 2004
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(unaudited)
Revenues:
Base rents $1,027,967 $2,053,590
Tenant reimbursements 607,886 1,178,887
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Total revenues 1,635,853 3,232,477
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Certain expenses:
Property operating expenses 607,886 1,178,887
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Total certain expenses 607,886 1,178,887
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Revenues in excess of certain expenses $1,027,967 $2,053,590
========== ==========
See accompanying notes.
2
45 Waterview Boulevard
Notes to Statement of Revenues and Certain Expenses
December 31, 2004
1. Organization and Basis of Presentation
Presented herein is the statement of revenues and certain expenses related to
the operation of 45 Waterview Boulevard (the "Property"), a four-story, Class A
office building located in Parsippany, New Jersey for the year ended December
31, 2004. The Property, which has approximately 106,680 square feet of leaseable
space, is leased in its entirety by DSM Nutritional Products, Inc. ("DSM"),
which is a United States based subsidiary of Kininkijke DSM, N.V. ("Royal DSM"),
who guarantees the lease and is headquartered in the Netherlands. The Property,
which is currently owned by Falk US Property Income Fund, LP, is not a legal
entity, but rather a property which is under contract for purchase by OLP
Parsippany LLC, a wholly owned subsidiary of One Liberty Properties, Inc. (the
"Company").
The accompanying statement of revenues and certain expenses has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for the acquisition of real estate properties. Accordingly,
the statement of revenues and certain expenses exclude certain expenses that may
not be comparable to those expected to be incurred in the future operations of
the aforementioned property. Items excluded consist of interest, depreciation,
and amortization.
2. Use of Estimates
The preparation of the statement of revenues and certain expenses in conformity
with U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the statement of
revenues and certain expenses and accompanying notes. Actual results could
differ from those estimates.
3. Revenue Recognition
The lease with the tenant is accounted for as an operating lease. Base rent is
recognized on a straight-line basis over the lease term. For the year ended
December 31, 2004, the contractual rent amount due pursuant to the underlying
lease exceeded the amount of rent recognized by $133,350, and for the
(unaudited) six months ended June 30, 2005, the rent recognized exceeded the
contractual rent amount due pursuant to the underlying lease by $35,844.
4. Risks and Uncertainties
The Property is leased to a single tenant, DSM Nutritional Products, Inc. ("the
Tenant"), which occupies 100% of the Property's total gross leaseable area under
a triple-net lease. Therefore, the Property's results of operations are
significantly dependent on the overall health of the Tenant and their
engineering plastics, resins and additive operations.
3
45 Waterview Boulevard
Notes to Statement of Revenues and Certain Expenses (Continued)
5. Base Rents
On January 1, 1997, Hoffman-La Roche, Inc. entered into a ten-year triple-net
lease agreement and subsequently assigned the lease to its subsidiary, Roche
Vitamins. Effective as of September 30, 2003, Royal DSM acquired Roche Vitamins
and assumed the obligations of Hoffman-La Roche, Inc. and Roche Vitamins under
the lease. By the first amendment to the lease effective April 1, 2005, DSM
agreed to extend the lease term for an additional ten years, expiring on August
31, 2017 with annual base rent ranging from $1,781,556 to $2,378,964 and an
improvement allowance of $853,440, which was paid outside the property.
6. Future Minimum Rents
Future minimum lease payments to be received by the Property as of December 31,
2004 under a noncancellable operating lease are as follows:
2005 $ 1,882,902
2006 1,821,561
2007 1,874,901
2008 1,928,241
2009 1,981,581
Thereafter 16,947,896
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$26,437,082
7. Interim Unaudited Financial Information
The statement of revenues and certain expenses for the six months ended June 30,
2005 is unaudited, however, in the opinion of management, all adjustments
(consisting solely of normal, recurring adjustments) necessary for the fair
presentation of the statement of revenues and certain expenses for the interim
period have been included. The results of the interim period are not necessarily
indicative of the results to be obtained for a full fiscal year.
8. Real Estate Management Agreement
The partnership paid management fees calculated at 2.5% of rents to The Gale
Company and paid asset management fees calculated at 1% of assets to Daniel
Borger during the year ended December 31, 2004 and six months ended June 30,
2005.
4
One Liberty Properties, Inc.
Pro Forma Consolidated Financial Statements
(Unaudited)
On September 16, 2005, OLP Parsippany LLC, a wholly-owned subsidiary of One
Liberty Properties, Inc. (the "Company") acquired real estate, in an arms length
transaction, which is leased in its entirety by DSM Nutritional Products, Inc.
(DSM), a supplier of engineering plastics, resins, and additives for the beauty
and cosmetics, beverage packaging, food packaging, and healthcare markets
located in Parsippany, New Jersey (the "Property").
The unaudited pro forma consolidated balance sheet of the Company as of June 30,
2005, has been prepared as if the Company's acquisition of the Property had been
consummated on June 30, 2005. The unaudited pro forma consolidated income
statements for the year ended December 31, 2004 and for the six months ended
June 30, 2005, are presented as if the Company's acquisition of the Property had
occurred on January 1, 2004 and the effect was carried forward through the year
ended December 31, 2004 and six month period ended June 30, 2005.
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 acquisition of the Property had
occurred on January 1, 2004, nor do they purport to project the Company's
financial position or results of operations at any future date or for any future
period. These pro forma consolidated financial statements should be read in
conjunction with (a) the Company's 2004 annual report on Form 10-K and the
Company's Quarterly report on Form 10-Q for the period ended June 30, 2005 and
(b) the Company's Form 8-K filed on September 16, 2005.
5
One Liberty Properties, Inc.
Pro Forma Consolidated Balance Sheet (Unaudited)
As of June 30, 2005
(Amounts in thousands)
The
The Company Purchase Company
Historical of Pro Forma
(A) Property as Adjusted
----------- -------- -----------
Assets
Real estate investments, at cost:
Land $ 49,131 $ 6,000 (B) $ 55,131
Buildings 206,186 24,000 (B) 230,186
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255,317 30,000 285,317
Less accumulated depreciation 20,736 - 20,736
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234,581 30,000 264,581
Investment in unconsolidated joint ventures 28,664 - 28,664
Cash and cash equivalents 29,025 (22,000)(B) 7,025
Unbilled rent receivable 5,822 - 5,822
Escrow, deposits and other receivables 1,454 - 1,454
Investment in BRT Realty Trust (related party) 694 - 694
Deferred financing costs 2,759 - 2,759
Other assets 2,807 - 2,807
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$ 305,806 $ 8,000 $ 313,806
========== ========= ==========
Liabilities and stockholders' equity
Mortgages payable $ 143,233 $ - $ 143,233
Line of credit - 8,000(C) 8,000
Dividends payable 3,250 - 3,250
Accrued expenses and other liabilities 3,195 - 3,195
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Total liabilities 149,678 8,000 157,678
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Commitments and contingencies - - -
Stockholders' equity:
Common stock 9,746 - 9,746
Paid-in capital 134,385 - 134,385
Accumulated other comprehensive income 783 - 783
Unearned compensation (1,554) - (1,554)
Accumulated undistributed net income 12,768 - 12,768
---------- --------- -----------
Total stockholders' equity 156,128 - 156,128
---------- --------- ----------
$ 305,806 $ 8,000 $ 313,806
========== ========= ==========
See accompanying notes.
6
One Liberty Properties, Inc.
Pro Forma Consolidated Income Statement (Unaudited)
For the Year Ended December 31, 2004
(Amounts in thousands, except per share data)
The Pro The
Company Purchase Forma Company
Historical of Adjust- Pro Forma
(A) Property (B) ments as Adjusted
---------- ------------ ----------- -----------
Revenues:
Rental income $ 25,792 $ 3,233 $ 40(C) $ 29,065
--------- --------- --------- ---------
Expenses:
Depreciation and amortization 4,758 - 600(D) 5,358
General and administrative 3,127 - - 3,127
Real estate expenses 1,230 1,179 - 2,409
Leasehold rent 119 - - 119
Provision for valuation adjustment of real estate 366 - - 366
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9,600 1,179 600 11,379
--------- --------- --------- ---------
Operating income 16,192 2,054 (560) 17,686
Other income and expenses:
Equity in earnings of unconsolidated joint ventures 2,869 - - 2,869
Interest and other income 735 - - 735
Interest:
Expense (8,394) - (310)(E) (8,704)
Amortization of deferred financing costs (503) - - (503)
Gain on sale of real estate 73 - - 73
Gain on sale of available-for-sale securities 2 - - 2
--------- --------- --------- ---------
Net income $ 10,974 $ 2,054 $ (870) $ 12,158
========= ========= ========= =========
Net income per common share - basic and diluted: (F)
Net income per common share $1.13 $1.25
===== =====
See accompanying notes.
7
One Liberty Properties, Inc.
Pro Forma Consolidated Income Statement (Unaudited)
For the Six Months Ended June 30, 2005
(Amounts in thousands, except per share data)
The Pro The
Company Purchase Forma Company
Historical of Adjust- Pro Forma
(A) Property (B) ments as Adjusted
---------- ------------ --------- -----------
Revenues:
Rental income $ 13,884 $ 1,636 $ 19(C) $ 15,539
--------- --------- --------- ---------
Expenses:
Depreciation and amortization 2,801 - 300(D) 3,101
General and administrative 1,852 - - 1,852
Real estate expenses 265 608 - 873
Leasehold rent 154 - - 154
Provision for valuation adjustment of real estate 469 - - 469
--------- --------- --------- ---------
5,541 608 300 6,449
--------- --------- --------- ---------
Operating income 8,343 1,028 (281) 9,090
Other income and expenses:
Equity in earnings of unconsolidated joint ventures 1,851 - - 1,851
Interest and other income 81 - - 81
Interest:
Expense (5,117) - (200)(E) (5,317)
Amortization of deferred financing costs (313) - - (313)
Gain on sale of air rights 10,248 - - 10,248
Loss on sale of available-for-sale securities (1) - - (1)
--------- --------- --------- ---------
Income from continuing operations $ 15,092 $ 1,028 $ (481) $ 15,639
========= ========= ========= =========
Net income per common share - basic and diluted: (F)
Income from continuing operations $1.54 $1.59
===== =====
See accompanying notes.
8
One Liberty Properties, Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
1. Notes to Pro Forma Consolidated Balance Sheet as of June 30, 2005
(A) To reflect the unaudited consolidated balance sheet of the Company as
of June 30, 2005, as reported on the Company's Quarterly Report on Form
10-Q.
(B) To reflect the September 16, 2005 purchase allocation of the company's
acquisition of the property located in Parsippany, New Jersey (the
"Property"), as of June 30, 2005, for approximately $30 million. There
was no independent valuation performed on the Property. The Company
intends to account for the acquisition in accordance with SFAS 141 and
142 and is currently in the process of analyzing the fair value of the
Property's in-place lease. Consequently, no value has yet been assigned
to the lease in the accompanying pro forma balance sheet and therefore,
the purchase price allocation is preliminary and subject to change.
(C) To reflect the funds borrowed under the Company's line of credit used
to purchase the Property.
2. Notes to Pro Forma Consolidated Income Statement for the Year Ended December
31, 2004
(A) To reflect the consolidated historical income statement of the Company
for the year ended December 31, 2004, as reported on the Company's Form
10-K.
(B) To reflect the historical operations of the Property for the year ended
December 31, 2004.
(C) To reflect incremental straight line rental income amounts for the
period.
(D) To reflect straight line depreciation for the Property based on an
estimated useful life of 40 years for the year ended December 31, 2004.
(E) To reflect the interest expense for the year ended December 31, 2004
for borrowings under the revolving line of credit used to fund a
portion of the purchase price ($8 million at approximately 3.9%).
(F) Basic net income per common share is calculated based on approximately
9,728,000 weighted average common shares outstanding and diluted net
income per common share is calculated based on approximately 9,744,000
weighted average common shares and common share equivalents
outstanding.
9
One Liberty Properties, Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited) - Continued
3. Notes to Pro Forma Consolidated Income Statement for the Six Months Ended
June 30, 2005
(A) To reflect the consolidated historical income statement of the Company
for the six months ended June 30, 2005, as reported on the Company's
Quarterly Report on Form 10-Q.
(B) To reflect the historical operations of the Property for the six months
ended June 30, 2005.
(C) To reflect incremental straight line rental income amounts for the
period.
(D) To reflect straight line depreciation for the Property based on an
estimated useful life of 40 years.
(E) To reflect the interest expense for the six months ended June 30, 2005
for borrowings under the revolving line of credit used to fund a
portion of the purchase price ($8 million at approximately 5.0%).
(F) Basic net income per common share is calculated based on approximately
9,818,000 weighted average common shares outstanding and diluted net
income per common share is calculated based on approximately 9,824,000
weighted average common shares and common share equivalents
outstanding.
10