One Liberty Properties (OLP) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01If we are unable to re-rent properties upon the expiration of our leases or if our tenants default or seek bankruptcy protection, our revenues and operating cash flows will be reduced and we would incur additional costs
2. 02(1)Eight leases accounting for 2.1% of contractual rental income expire in 2025, and we believe or have been advised that tenants with respect to $560,000 of 2025 contractual rental income intend to allow their leases to expire
3. 03Approximately 21.1% of our 2025 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, would significantly reduce our revenues
4. 04The concentration of our properties in certain states makes our revenues and the value of our portfolio vulnerable to adverse changes in local economic conditions
5. 05Our 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
6. 06Write-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
7. 07Declines in the value of our properties could result in impairment charges
8. 08Our ability to fully control the maintenance of our net-leased properties may be limited
9. 09Traditional retail tenants account for 21.1% of our 2025 contractual rental income and the competition that such tenants face from e-commerce retail sales could adversely affect our business

Risks Related to Our Financing Activities, Indebtedness and Capital Resources

1. 10If 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
2. 11Volatile or increasing interest rates, or credit market tightening, may make it 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
3. 12If our borrowings increase, the risk of default on our repayment obligations and our debt service requirements will also increase
4. 13A 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
5. 14Certain of our leases require us to pay property related expenses that are not the obligations of our tenants
6. 15Our 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

Risks Related to Real Estate Investments

1. 16Our revenues and the value of our portfolio are affected by a number of factors that affect investments in leased real estate generally
2. 17Real estate investments are relatively illiquid and their values may decline
3. 18Uninsured 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
4. 19We have been, and will continue to be, subject to significant competition and we may not be able to compete successfully for investments

Regulatory and Tax Risks

1. 20Compliance with environmental regulations and associated costs could adversely affect our results of operations and liquidity
2. 21Compliance with the Americans with Disabilities Act could be costly
3. 22Legislative or regulatory tax changes could have an adverse effect on us

Risks Related to OLP’s Organization, Structure and Ownership of Stock

1. 23Our transactions with affiliated entities involve conflicts of interest
2. 24Our 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
3. 25Certain 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
4. 26Failure to qualify as a REIT could result in material adverse tax consequences and could significantly reduce cash available for distributions
5. 27We are subject to certain distribution requirements that may result in our having to borrow funds at unfavorable rates
6. 28Compliance with REIT requirements may hinder our ability to maximize profits
7. 29If we reduce or do not increase our dividend, the market value of our common stock may decline
8. 30The stock market is volatile, and fluctuations in our operating results, removal from various indices and other factors could cause our stock price to decline

General Business Risks

1. 31Enhanced market and economic volatility due to adverse economic and geopolitical conditions, health crises or dislocations in the credit markets, could have a material adverse effect on our results of operations, financial condition and ability to pay dividends
2. 32Breaches of information technology systems could materially harm our business and reputation
3. 33Actual or threatened epidemics, pandemics, outbreaks, or other public health crises may adversely affect our tenants’ financial condition and the profitability of our properties
4. 34The failure of any bank in which we deposit our funds could have an adverse impact on our financial condition
5. 35We are dependent on third party software for our financial reporting processes and systems