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What changed in ONE LIBERTY PROPERTIES INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ONE LIBERTY PROPERTIES INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+298 added−384 removedSource: 10-K (2024-03-06) vs 10-K (2023-03-14)

Top changes in ONE LIBERTY PROPERTIES INC's 2023 10-K

298 paragraphs added · 384 removed · 76 edited across 2 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

57 edited+24 added−299 removed43 unchanged
Biggest changeIn evaluating our performance, management is careful to examine GAAP measures such as net income and cash flows from operating, investing and financing activities. 42 Table of Contents 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2022 2021 GAAP net income attributable to One Liberty Properties, Inc. ​ $ 42,177 ​ $ 38,857 Add: depreciation and amortization of properties ​ ​ 23,193 ​ ​ 22,395 Add: our share of depreciation and amortization of unconsolidated joint ventures ​ ​ 519 ​ ​ 571 Add: amortization of deferred leasing costs ​ ​ 588 ​ ​ 437 Add: our share of amortization of deferred leasing costs of unconsolidated joint ventures ​ ​ 21 ​ ​ 45 Deduct: gain on sale of real estate, net ​ (16,762) ​ (25,463) Deduct: equity in earnings from sale of unconsolidated joint venture properties ​ — ​ (805) Adjustments for non-controlling interests ​ ​ (67) ​ ​ 57 NAREIT funds from operations applicable to common stock ​ 49,669 ​ 36,094 Deduct: straight-line rent accruals and amortization of lease intangibles ​ ​ (3,240) ​ ​ (1,019) Deduct: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures ​ ​ (27) ​ ​ (10) Deduct: income on settlement of litigation ​ ​ (5,388) ​ ​ — Deduct: additional rent from ground lease tenant ​ ​ (4,626) ​ ​ — Deduct: income on insurance recoveries from casualty loss ​ ​ (918) ​ ​ (695) Deduct: lease termination fee income ​ ​ (25) ​ ​ (560) Deduct: our share of unconsolidated joint venture lease termination fee income ​ ​ (25) ​ ​ — Deduct: lease assignment fee income ​ ​ — ​ ​ (100) Add: amortization of restricted stock and RSU compensation ​ 5,507 ​ 5,433 Add: prepayment costs on debt ​ ​ — ​ ​ 901 Add: amortization and write-off of deferred financing costs ​ 1,115 ​ 970 Add: amortization of lease incentives ​ ​ 44 ​ ​ — Add: amortization of mortgage intangible asset ​ ​ 12 ​ ​ — Add: our share of amortization of deferred financing costs of unconsolidated joint venture ​ ​ 17 ​ ​ 17 Adjustments for non-controlling interests ​ ​ 14 ​ ​ 16 Adjusted funds from operations applicable to common stock ​ $ 42,129 ​ $ 41,047 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2022 2021 GAAP net income attributable to One Liberty Properties, Inc. ​ $ 1.99 ​ $ 1.85 Add: depreciation and amortization of properties ​ ​ 1.09 ​ ​ 1.06 Add: our share of depreciation and amortization of unconsolidated joint ventures ​ ​ .02 ​ ​ .03 Add: amortization of deferred leasing costs ​ ​ .03 ​ ​ .02 Add: our share of amortization of deferred leasing costs of unconsolidated joint ventures ​ ​ — ​ ​ — Deduct: gain on sale of real estate, net ​ ​ (.79) ​ ​ (1.21) Deduct: equity in earnings from sale of unconsolidated joint venture properties ​ ​ — ​ ​ (.04) Adjustments for non-controlling interests ​ ​ — ​ ​ .01 NAREIT funds from operations per share of common stock (a) ​ 2.34 ​ 1.72 Deduct: straight-line rent accruals and amortization of lease intangibles ​ ​ (.16) ​ ​ (.06) Deduct: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures ​ ​ — ​ ​ — Deduct: income on settlement of litigation ​ ​ (.25) ​ ​ — Deduct: additional rent from ground lease tenant ​ ​ (.22) ​ ​ — Deduct: income on insurance recoveries from casualty loss ​ ​ (.04) ​ ​ (.03) Deduct: lease termination fee income ​ ​ — ​ ​ (.03) Deduct: our share of unconsolidated joint venture lease termination fee income ​ ​ — ​ ​ — Deduct: lease assignment fee income ​ ​ — ​ ​ — Add: amortization of restricted stock and RSU compensation ​ ​ .26 ​ ​ .26 Add: prepayment costs on debt ​ ​ — ​ ​ .04 Add: amortization and write-off of deferred financing costs ​ ​ .05 ​ ​ .05 Add: amortization of lease incentives ​ ​ — ​ ​ — Add: amortization of mortgage intangible asset ​ ​ — ​ ​ — Add: our share of amortization of deferred financing costs of unconsolidated joint venture ​ ​ — ​ ​ — Adjustments for non-controlling interests ​ ​ — ​ ​ — Adjusted funds from operations per share of common stock (a) ​ $ 1.98 ​ $ 1.95 43 Table of Contents (a) The weighted average number of diluted common shares used to compute FFO and AFFO applicable to common stock includes unvested restricted shares that are excluded from the computation of diluted EPS. ​ ​ The $13.6 million, or 37.6%, increase in FFO is due primarily to: ● a $10.0 million net increase in rental income, including $4.6 million from The Vue settlement, $2.2 million of straight-line rent accruals and $1.3 million from Regal Cinemas, including the collection of $885,000 of deferred rent, ● the $5.4 million income from the settlement of the Round Rock Litigation, ● a $901,000 decrease in prepayment costs on debt, and ● a $370,000 decrease in interest expense.
Biggest changeIn evaluating our performance, management is careful to examine GAAP measures such as net income and cash flows from operating, investing and financing activities. 39 Table of Contents 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): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2023 2022 GAAP net income attributable to One Liberty Properties, Inc. ​ $ 29,614 ​ $ 42,177 Add: depreciation and amortization of properties ​ ​ 24,063 ​ ​ 23,193 Add: our share of depreciation and amortization of unconsolidated joint ventures ​ ​ 477 ​ ​ 519 Add: amortization of deferred leasing costs ​ ​ 726 ​ ​ 588 Add: our share of amortization of deferred leasing costs of unconsolidated joint ventures ​ ​ 18 ​ ​ 21 Add: our share of impairment loss of unconsolidated joint venture property ​ ​ 850 ​ ​ — Add: equity in loss from sale of unconsolidated joint venture property ​ 108 ​ — Deduct: gain on sale of real estate, net ​ (17,008) ​ (16,762) Adjustments for non-controlling interests ​ ​ 148 ​ ​ (67) NAREIT funds from operations applicable to common stock ​ 38,996 ​ 49,669 Deduct: straight-line rent accruals and amortization of lease intangibles ​ ​ (2,717) ​ ​ (3,240) Deduct: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures ​ ​ (19) ​ ​ (27) Deduct: other income and income on settlement of litigation ​ ​ (112) ​ ​ (5,388) Deduct: additional rent from ground lease tenant ​ ​ (16) ​ ​ (4,626) Deduct: income on insurance recovery from casualty loss ​ ​ — ​ ​ (918) Deduct: lease termination fee income ​ ​ — ​ ​ (25) Deduct: our share of unconsolidated joint venture lease termination fee income ​ ​ (21) ​ ​ (25) Add: amortization of restricted stock and RSU compensation ​ 5,367 ​ 5,507 Add: amortization and write-off of deferred financing costs ​ 839 ​ 1,115 Add: amortization of lease incentives ​ ​ 121 ​ ​ 44 Add: amortization of mortgage intangible assets ​ ​ 114 ​ ​ 12 Add: our share of amortization of deferred financing costs of unconsolidated joint venture ​ ​ 42 ​ ​ 17 Adjustments for non-controlling interests ​ ​ 1 ​ ​ 14 Adjusted funds from operations applicable to common stock ​ $ 42,595 ​ $ 42,129 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2023 2022 GAAP net income attributable to One Liberty Properties, Inc. ​ $ 1.38 ​ $ 1.99 Add: depreciation and amortization of properties ​ ​ 1.13 ​ ​ 1.09 Add: our share of depreciation and amortization of unconsolidated joint ventures ​ ​ .02 ​ ​ .02 Add: amortization of deferred leasing costs ​ ​ .03 ​ ​ .03 Add: our share of amortization of deferred leasing costs of unconsolidated joint ventures ​ ​ — ​ ​ — Add: our share of impairment loss of unconsolidated joint venture property ​ ​ .04 ​ ​ — Add: equity in loss from sale of unconsolidated joint venture property ​ ​ .01 ​ ​ — Deduct: gain on sale of real estate, net ​ ​ (.80) ​ ​ (.79) Adjustments for non-controlling interests ​ ​ .01 ​ ​ — NAREIT funds from operations per share of common stock (a) ​ 1.82 ​ 2.34 Deduct: straight-line rent accruals and amortization of lease intangibles ​ ​ (.13) ​ ​ (.16) Deduct: our share of straight-line rent accruals and amortization of lease intangibles of unconsolidated joint ventures ​ ​ — ​ ​ — Deduct: other income and income on settlement of litigation ​ ​ (.01) ​ ​ (.25) Deduct: additional rent from ground lease tenant ​ ​ — ​ ​ (.22) Deduct: income on insurance recovery from casualty loss ​ ​ — ​ ​ (.04) Deduct: lease termination fee income ​ ​ — ​ ​ — Deduct: our share of unconsolidated joint venture lease termination fee income ​ ​ — ​ ​ — Add: amortization of restricted stock and RSU compensation ​ ​ .25 ​ ​ .26 Add: amortization and write-off of deferred financing costs ​ ​ .04 ​ ​ .05 Add: amortization of lease incentives ​ ​ .01 ​ ​ — Add: amortization of mortgage intangible assets ​ ​ .01 ​ ​ — Add: our share of amortization of deferred financing costs of unconsolidated joint venture ​ ​ — ​ ​ — Adjustments for non-controlling interests ​ ​ — ​ ​ — Adjusted funds from operations per share of common stock (a) ​ $ 1.99 ​ $ 1.98 (a) The weighted average number of diluted common shares used to compute FFO and AFFO applicable to common stock includes unvested restricted shares that are excluded from the computation of diluted EPS. ​ ​ 40 Table of Contents The $10.7 million, or 21.5%, decrease in FFO is due primarily to: ● the inclusion, in the corresponding 2022 period, of (i) $5.4 million from the Round Rock Settlement, (ii) $4.6 million from the litigation settlement proceeds from The Vue (included in rental income), and (iii) $918,000 of income on insurance recovery from casualty loss, ● a $1.2 million increase in interest expense, ● a $936,000 increase in real estate operating expenses, and ● a $564,000 increase in general and administrative expense.
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 should not be considered to be an alternative to net income as a reliable measure of our operating performance; nor an alternative to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity.
Risk Factors ”, and “— Challenges and Uncertainties as a Result of the Volatile Economic Environment” , we, among other things, face additional challenges and uncertainties, 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; acquire or dispose of properties on acceptable terms; or grow, through acquisitions or otherwise, our property portfolio so as to generate additional rental and net income.
Risk Factors ”, and “— Challenges and Uncertainties as a Result of the Volatile Economic Environment ”, we, among other things, face additional challenges and uncertainties, 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; acquire or dispose of properties on acceptable terms; or grow, through acquisitions or otherwise, our property portfolio so as to generate additional rental and net income.
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”).
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. ​ 44 Table of Contents 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”).
Since 2018, the property has faced, and we anticipate that the property will continue to face, occupancy and financial challenges, and our tenant has not paid rent since October 2020 ( i.e ., an aggregate of $3.0 million that would have been due had it generated specified levels of positive operating cash flow), and we anticipate that it will not pay rent for an extended period.
Since 2018, the property has faced, and we anticipate that the property will continue to face, occupancy and financial challenges, and our tenant has not paid rent since October 2020 ( i.e ., an aggregate of $3.9 million that would have been due had it generated specified levels of positive operating cash flow), and we anticipate that it will not pay rent for an extended period.
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.
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 substantially all variable rate mortgages. These swaps are used for hedging purposes-not for speculation.
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 275 basis points if such ratio is greater than 60%. The applicable margin was 175 basis points for each of 2022 and 2021.
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 275 basis points if such ratio is greater than 60%. The applicable margin was 175 basis points for each of 2023 and 2022.
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, 2022. 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).
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, 2023. 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 that review and evaluation, our CEO and CFO have concluded that our disclosure controls and procedures, as designed and implemented as of December 31, 2022, 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.
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, 2023, 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.
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.
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 predictably over time. In fact, real estate values have historically risen and fallen with market conditions.
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.
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. ​ 45 Table of Contents 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.
Approximately 70% 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).
Approximately 69% 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).
If there were a decrease of 100 basis points in forward interest rates, the fair market value of the interest rate swaps and the net unrealized gain on derivative instruments would have decreased by $725,000.
If there were a decrease of 100 basis points in forward interest rates, the fair market value of the interest rate swaps and the net unrealized gain on derivative instruments would have decreased by $316,000.
Based on its assessment, our management concluded that, as of December 31, 2022, our internal control over financial reporting was effective based on those criteria.
Based on its assessment, our management concluded that, as of December 31, 2023, our internal control over financial reporting was effective based on those criteria.
(2) Assumes that $3.5 million will be payable annually during the next five years pursuant to the compensation and services agreement.
(2) Assumes that $3.6 million will be payable annually during the next five years pursuant to the compensation and services agreement.
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 47 Table of Contents well as the reported amounts of revenues and expenses during the reporting periods.
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.
Diluted per share FFO and AFFO were impacted negatively in the year ended December 31, 2022 by an average increase from December 31, 2021 of approximately 200,000 in the weighted average number of shares of common stock outstanding as a result of stock issuances pursuant to the equity incentive, at-the-market equity offering and dividend reinvestment programs, offset by the Company’s repurchase of shares during 2022. ​ Comparison of Years Ended December 31, 2021 and 2020 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. ​ 44 Table of Contents 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.
Diluted per share FFO and AFFO were impacted negatively in the year ended December 31, 2023 by an average increase from December 31, 2022 of approximately 114,000 in the weighted average number of shares of common stock outstanding as a result of stock issuances pursuant to the equity incentive and dividend reinvestment, offset by the Company’s repurchase of shares during 2023. ​ Comparison of Years Ended December 31, 2022 and 2021 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. 41 Table of Contents 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.
(2) The 2022 column represents rental income from properties sold during the year ended December 31, 2022; the 2021 column represents rental income from properties sold since January 1, 2021.
(2) The 2023 column represents rental income from properties sold during the year ended December 31, 2023; the 2022 column represents rental income from properties sold since January 1, 2022.
As of December 31, 2022, if there had been an increase of 100 basis points in forward interest rates, the fair market value of the interest rate swaps and the net unrealized gain on derivative instruments would have increased by $705,000.
As of December 31, 2023, if there had been an increase of 100 basis points in forward interest rates, the fair market value of the interest rate swaps and the net unrealized gain on derivative instruments would have increased by $309,000.
We may borrow up to $100.0 million pursuant to such facility, subject to compliance with borrowing base requirements. At December 31, 2022, after giving effect to such borrowing base requirements, $78.2 million was available to be borrowed. The facility expires December 31, 2026. See “—Credit Facility” .
We may borrow up to $100.0 million pursuant to such facility, subject to compliance with borrowing base requirements. At December 31, 2023, after giving effect to such borrowing base requirements, $100.0 million was available to be borrowed. The facility expires December 31, 2026. See “—Credit Facility” .
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, 2022 that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. ​ ​ 50 Table of Contents Item 9B.
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, 2023 that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. ​
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.
We also consider FFO and AFFO to be useful in evaluating potential property acquisitions. FFO and AFFO do not represent net income or cash flows from operating, investing or financing activities as defined by GAAP.
At December 31, 2022, (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 $16.5 million and is subordinate to $64.8 million of mortgage debt incurred by the owner/operator.
At December 31, 2023, (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 $17.3 million and is subordinate to $63.6 million of mortgage debt incurred by the owner/operator.
We estimate that the carrying costs for these two properties for the twelve months ending December 31, 2023, are approximately $1.3 million, including ground lease rent of $464,000 (which sum has historically been paid directly by Regal to the owner of the Greensboro property), real estate taxes of approximately $249,000, and debt service of $425,000 (including $109,000 of deferred interest payments).
We estimate that the carrying costs for these two properties for the twelve months ending December 31, 2024, are approximately $1.3 million, including ground lease rent of $512,000 (which sum has historically been paid directly by Regal to the owner of the Greensboro property), real estate taxes of approximately $356,000, and debt service of $290,000.
As a result, as of December 31, 2022: ​ ● our 2023 contractual rental income is derived from the following property types: 63.2% from industrial, 26.2% from retail, 4.5% from health and fitness, 4.1% from restaurant and 2.0% from other properties, ​ ● there are seven states with properties that account for 5% or more of 2023 contractual rental income, and no state accounts for more than 10.0% of 2023 contractual rental income, ​ ● there are two tenants ( i.e ., Havertys Furniture and FedEx) that account for more than 5% of 2023 contractual rental income and those tenants account for an aggregate of 10.8% of contractual rental income, ​ 31 Table of Contents ● through 2031, there are two years in which the percentage of our 2023 contractual rental income represented by expiring leases exceeds 10% ( i.e ., 19.3% in 2027 and 10.5% in 2028) — approximately 19.4% of our 2023 contractual rental income is represented by leases expiring in 2032 and thereafter, ​ ● after giving effect to interest rate swap agreements, substantially all of our mortgage debt bears interest at fixed rates, ​ ● in 2023, 2024 and 2025, 6.2%, 15.2% and 10.3%, respectively, of our total scheduled principal mortgage payments ( i.e., amortization and balances due at maturity) is due, and ​ ● there are three different counterparties to our portfolio of interest rate swaps: two counterparties, rated A3 or better by a national rating agency ( i.e ., Moody’s Long-Term Debt Ratings), account for 92.9%, or $45.7 million, of the notional value of our swaps; and one counterparty, rated A - by another rating provider ( i.e., Kroll), accounts for 7.1%, or $3.5 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.
As a result, as of December 31, 2023: ● our 2024 contractual rental income is derived from the following property types: 66.1% from industrial, 24.2% from retail, 3.7% from health and fitness, 1.7% from restaurant, 1.6% from theaters, and 2.7% from other properties, ​ ● there are six states with properties that account for 5% or more of 2024 contractual rental income, and one state that accounts for more than 10.0% of 2024 contractual rental income ( i.e., South Carolina at 12.0%), ​ ● there is one tenant that accounts for more than 5% of 2024 contractual rental income ( i.e ., FedEx at 5.5%), ​ ● through 2033, there are four years in which the percentage of our 2024 contractual rental income represented by expiring leases equals or exceeds 10% ( i.e ., 20.4% in 2027, 13.8% in 2028, 10.1% in 2029 and 10.5% in 2033) — approximately 5.1 % of our 2024 contractual rental income is represented by leases expiring in 2034 and thereafter, ​ ● after giving effect to interest rate swap agreements, substantially all of our mortgage debt bears interest at fixed rates, ​ ● in 2024, 2025 and 2026, 14.6%, 9.8% and 7.0%, respectively, of our total scheduled principal mortgage payments ( i.e., amortization and balances due at maturity) is due, and 30 Table of Contents ​ ● there are three different counterparties to our portfolio of interest rate swaps: two counterparties, rated A3 or better by a national rating agency ( i.e ., Moody’s Long-Term Debt Ratings), account for 88.6%, or $26.3 million, of the notional value of our swaps; and one counterparty, rated A - by another rating provider ( i.e., Kroll), accounts for 11.4%, or $3.3 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.
We expect that mortgage interest and amortization payments (excluding repayments of principal at maturity) of approximately $76.6 million due through 2025 will be paid primarily from cash generated from our operations. We anticipate that principal balances due at maturity through 2025 of $95.7 million will be paid primarily from cash and cash equivalents and mortgage financings and refinancings.
We expect that mortgage interest and amortization payments (excluding repayments of principal at maturity) of approximately $77.1 million due through 2026 will be paid primarily from cash generated from our operations. We anticipate that principal balances due at maturity through 2026 of $99.9 million will be paid primarily from cash and cash equivalents and mortgage financings and refinancings.
Our available liquidity at March 6, 2023 was approximately $94.9 million, including approximately $6.4 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 $88.5 million available under our credit facility.
Our available liquidity at March 1, 2024 was approximately $123.9 million, including approximately $23.9 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 $100.0 million available under our credit facility.
We generally seek to manage the risk of our real property portfolio and the related financing arrangements by (i) diversifying among locations, tenants, scheduled lease expirations, mortgage maturities and lenders, and types of properties (although over the past several years, we have focused, and we continue to focus, on acquiring industrial properties), and (ii) minimizing our exposure to interest rate fluctuations.
Other than with respect to our continuing focus on acquiring industrial properties, we generally seek to manage the risk of our real property portfolio and the related financing arrangements by (i) diversifying among locations, tenants, scheduled lease expirations, mortgage maturities and lenders, and (ii) minimizing our exposure to interest rate fluctuations.
See “ —General Challenges and Uncertainties, ” “ —Challenges and Uncertainties Facing Certain Properties and Tenants—The Vue”, and “—Challenges and Uncertainties Facing Certain Properties and Tenants —The Manahawkin Property”. As of December 31, 2022, we had $409.2 million of mortgage debt outstanding (excluding mortgage debt of our unconsolidated joint venture), all of which is non-recourse (subject to standard carve-outs).
See “ —General Challenges and Uncertainties, ” and “ —Challenges and Uncertainties Facing Certain Properties and Tenants—The Vue”. As of December 31, 2023, we had $422.6 million of mortgage debt outstanding, all of which is non-recourse (subject to standard carve-outs).
We do not enter into interest rate swaps for trading purposes. At December 31, 2022, we had no liability in the event of the early termination of our swaps. ​ At December 31, 2022, we had 17 interest rate swap agreements outstanding.
We do not enter into interest rate swaps for trading purposes. At December 31, 2023, we had no liability in the event of the early termination of our swaps. ​ At December 31, 2023, we had 13 interest rate swap agreements outstanding with an aggregate $29.6 million notional amount.
Our cash flow will be adversely impacted by our funding of additional capital expenditures and operating expense shortfalls at the property (including our payment of the tenant’s debt service obligations) and the tenant’s continuing non-payment of rent. We may incur a substantial impairment charge with respect to this property if we determine that the property is impaired.
Our cash flow will be adversely impacted by our funding of additional capital expenditures and operating expense shortfalls at the property (including our payment of the tenant’s debt service obligations) and the tenant’s continuing non-payment of rent.
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.
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. ​ Equity-Based Compensation ​ We grant shares of restricted stock and restricted stock units ("RSUs") to eligible plan participants, subject to the recipient's continued service over a specified period and, with respect to the RSUs, the satisfaction of specified conditions over a specified period.
If these challenges, and in particular, the challenges faced by Regal Cinemas, The Vue and the Manahawkin Property, are not resolved in a satisfactory manner, we will be adversely affected. Regal Cinemas Regal Cinemas, or Regal, is a tenant at three properties, including a property owned by an unconsolidated joint venture in which we have a 50% equity interest.
If these challenges, and in particular, the challenges faced by Regal Cinemas, The Vue and LA Fitness, are not resolved in a satisfactory manner, we will be adversely affected. ​ Regal Cinemas ​ Regal Cinemas, or Regal, is a tenant at two properties.
During the three years ending December 31, 2025, 54 leases for 48 tenants at 39 properties representing $15.4 million, or 21.5%, of 2023 contractual rental income expire. ​ 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.
During the three years ending December 31, 2026, 49 leases for 42 tenants at 35 properties representing $14.3 million, or 20.0%, of 2024 contractual rental income expire. ​ 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. ​ At December 31, 2023, we have unhedged variable rate mortgage debt in the principal amount of $16.0 million of which bears a weighted average interest rate of 5.73%.
If the undiscounted cash flows are less than the asset’s carrying amount, an 48 Table of Contents impairment loss is recorded to the extent that the estimated fair value is less than the asset’s carrying amount.
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.
For 2022, the weighted average interest rate on the facility was approximately 3.42% and as of February 28, 2023, the rate on the facility was 6.32%. ​ 46 Table of Contents The terms of our credit facility include certain restrictions and covenants which may 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 value, the minimum level of net income, certain investment limitations and the minimum value of unencumbered properties and the number of such properties.
For 2023, the weighted average interest rate on the facility was approximately 6.69% and as of February 29, 2024, the rate on the facility was 7.08%. ​ The terms of our credit facility include certain restrictions and covenants which may 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 value, the minimum level of net income, certain investment limitations and the minimum value of unencumbered properties and the number of such properties. 43 Table of Contents 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. ​ Inflation ​ We are exposed to inflation risk as income from long-term leases is the primary source of our cash flows from operations.
Excludes (i) approximately $2.8 million of 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 required to acquire properties, (iii) amounts to be expended in connection with the re-development of the Manahawkin Property, if such re-development is pursued and (iv) an estimated $985,000 for funding capital expenditures and operating cash flow shortfalls at The Vue, of which $447,000 was funded in 2023.
Excludes (i) approximately $2.7 million of capital expenditures to be incurred in the ordinary course of business in connection with tenant improvements (including $1.2 million in connection with the Havertys Furniture lease extensions), (ii) amounts required to acquire properties, and (iii) the potential funding in 2024 for capital expenditures and operating cash flow shortfalls at The Vue, which amount, if any, has not been definitively determined.
See “—Comparison of Years Ended December 31, 2022 and 2021 ” for further information regarding these changes. ​ The $1.1 million, or 2.6%, increase in AFFO is due to the increase in FFO as described above, offset by the exclusion from AFFO in 2022 of: ● the $5.4 million income from the settlement of the Round Rock Litigation, ● the $4.6 million from The Vue settlement, ● a $2.2 million increase in rental income related to straight-line rent accruals, and ● a $901,000 decrease in prepayment costs on debt.
Offsetting the decrease is a $3.1 million net increase in rental income. ​ See “—Comparison of Years Ended December 31, 2023 and 2022 ” for further information regarding these changes. ​ ​ The $466,000, or 1.1%, increase in AFFO is due to the factors impacting FFO as described immediately above, excluding the (i) $5.4 million from the Round Rock Settlement, (ii) $4.6 million from the litigation settlement proceeds from The Vue (included in rental income), and (iii) $918,000 of income on insurance recovery from casualty loss. ​ See “—Comparison of Years Ended December 31, 2023 and 2022 ” for further information regarding these changes.
(Because the collection of amounts owed by Regal is deemed to be less than probable, we have not accrued Regal’s base rent or deferred rent and since October 2020, have been reporting same on a cash basis).
Regal is the primary obligor with respect to $460,000 of these carrying costs and we are responsible with respect to such amount if it is not paid by Regal. ​ Because the collection of amounts owed by Regal is deemed to be less than probable, we have not accrued Regal’s base rent (but have collected all base rent payable pursuant to the amended leases) and since October 2020, have been reporting same on a cash basis.
Offsetting the increase was $101,000 related to write-offs of deferred costs in connection with the sales of properties in 2021, of which $67,000 was related to the sale of our West Hartford, Connecticut properties. 41 Table of Contents 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.
The decrease in 2023 is primarily due to the $221,000 write-off of deferred costs related to the mortgages on the eleven Havertys properties that were paid off in June 2022. 38 Table of Contents 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.
In April 2022, we received $5.4 million pursuant to the settlement of the Round Rock Litigation. ​ Other income. Included in 2022 and 2021 are $918,000 and $695,000, respectively, representing the final property insurance recoveries related to our Lake Charles, Louisiana property damaged in an August 2020 hurricane.
In April 2022, we received $5.4 million in connection with the settlement of a lawsuit at our former Round Rock, Texas property (the “Round Rock Settlement”). (See Note 13 to our consolidated financial statements.) ​ Other income. Included in 2022 is $918,000 representing the final property insurance recovery related to our Lake Charles, Louisiana property damaged in a 2020 hurricane.
The following table compares interest expense for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ Increase ​ ​ (Dollars in thousands) 2022 2021 (Decrease) % Change Interest expense: ​ ​ ​ ​ Mortgage interest ​ $ 16,762 ​ $ 17,521 ​ $ (759) (4.3) Credit line interest ​ ​ 807 ​ ​ 418 ​ ​ 389 93.1 Total ​ $ 17,569 ​ $ 17,939 ​ $ (370) (2.1) ​ 40 Table of Contents Mortgage interest ​ The following table reflects the average interest rate on the weighted average principal amount of outstanding mortgage debt during the applicable year: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ December 31, ​ Increase ​ ​ (Dollars in thousands) 2022 2021 (Decrease) % Change Average interest rate ​ ​ 4.14 % ​ 4.22 % ​ (0.08) % (1.9) Average principal amount ​ $ 404,263 ​ $ 416,914 ​ $ (12,651) (3.0) ​ The decrease in 2022 is due primarily to the decrease in the average principal amount of mortgage debt outstanding which resulted from mortgage payoffs (generally, as they matured or in connection with property sales) and scheduled amortization payments.
The following table compares interest expense for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Increase ​ ​ (Dollars in thousands) ​ 2023 2022 (Decrease) % Change Interest expense: ​ ​ ​ ​ Mortgage interest ​ $ 17,514 ​ $ 16,762 ​ $ 752 4.5 Credit line interest ​ ​ 1,266 ​ ​ 807 ​ ​ 459 56.9 Total ​ $ 18,780 ​ $ 17,569 ​ $ 1,211 6.9 ​ Mortgage interest ​ The following table reflects the average interest rate on the weighted average principal amount of outstanding mortgage debt during the applicable year: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Increase ​ ​ (Dollars in thousands) ​ 2023 2022 (Decrease) % Change Weighted average interest rate ​ ​ 4.18 % ​ 4.14 % ​ 0.04 % 1.0 Weighted average principal amount ​ $ 416,517 ​ $ 404,263 ​ $ 12,254 3.0 ​ The increase in 2023 is due primarily to the increase in the average principal amount of mortgage debt outstanding which resulted from financings effectuated in connection with refinancings and acquisitions. ​ 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) ​ 2023 2022 (Decrease) Change Weighted average interest rate ​ ​ 6.69 % ​ 3.42 % ​ 3.27 % 95.6 Weighted average principal amount ​ $ 15,676 ​ $ 16,222 ​ $ (546) (3.4) ​ The increase in 2023 is due to the increase on the weighted average interest rate. ​ Amortization and write-off of deferred financing costs.
The increase was offset by: - a decrease, in 2022, of $620,000 related to improvements and tenant origination costs at several properties that prior to December 31, 2022 were fully amortized, 38 Table of Contents - the inclusion, in 2021, of $510,000 of such expense from the properties sold since January 1, 2021, and - the inclusion, in 2021, of $191,000 of accelerated amortization of tenant origination costs in connection with a tenant’s exercise of a lease termination option.
The increase is due primarily to: ​ - $1.5 million of such expense from properties acquired in 2023 and 2022 (including $1.1 million from properties acquired in 2022), ​ - $434,000 of depreciation from improvements at several same store properties, and ​ - $186,000 of leasing commissions at several same store properties. ​ The increase was offset by: ​ - a decrease, in 2023, of $854,000 related to improvements and tenant origination costs at several properties that prior to December 31, 2023 were fully amortized, and ​ - the inclusion, in 2022, of $332,000 of such expense from the properties sold since January 1, 2022 . ​ ​ General and administrative.
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. 45 Table of Contents ​ Material Contractual Obligations ​ The following sets forth our material contractual obligations as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ $ 28,915 ​ $ 47,662 ​ $ 38,410 ​ $ 69,349 ​ $ 184,336 Mortgages payable—balances due at maturity ​ 12,973 ​ 82,758 ​ 57,704 ​ 163,875 ​ 317,310 Credit facility (1) ​ — ​ — ​ 21,800 ​ ​ — ​ 21,800 Purchase obligations (2) ​ 4,051 ​ 7,792 ​ 7,184 ​ 210 ​ 19,237 Total ​ $ 45,939 ​ $ 138,212 ​ $ 125,098 ​ $ 233,434 ​ $ 542,683 (1) Represents the amount outstanding at December 31, 2022.
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. 42 Table of Contents Material Contractual Obligations ​ The following sets forth our material contractual obligations as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ $ 28,774 ​ $ 48,305 ​ $ 39,267 ​ $ 64,299 ​ $ 180,645 Mortgages payable—balances due at maturity ​ 49,906 ​ 50,029 ​ 68,679 ​ 168,560 ​ 337,174 Credit facility (1) ​ — ​ — ​ — ​ ​ — ​ — Purchase obligations (2) ​ 4,172 ​ 7,425 ​ 7,329 ​ 161 ​ 19,087 Total ​ $ 82,852 ​ $ 105,759 ​ $ 115,275 ​ $ 233,020 ​ $ 536,906 (1) At December 31, 2023 there was no balance outstanding on the credit facility.
In 2022, we obtained approximately $28.7 million of net proceeds from property sales (after giving effect to $1.6 million of mortgage debt repayments), $48.9 million of proceeds from mortgage financings (after giving effect to $27.8 million of refinanced amounts) and $5.4 million from the settlement of a lawsuit involving our former assisted living facility in Round Rock, Texas.
In 2023, we obtained approximately (i) $46.6 million of net proceeds from property sales (after giving effect to our share of $11.3 million of mortgage debt repayments and $1.8 million of seller-financing), (ii) $22.6 million of proceeds from mortgage financings (after giving effect to $13.8 million of refinanced amounts) and (iii) $4.6 million from the litigation settlement proceeds from The Vue.
At December 31, 2022, a 100 basis point increase of the interest rate on this facility would increase our related interest costs by approximately $218,000 per year and a 100 basis point decrease of the interest rate would decrease our related interest costs by approximately $218,000 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, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Market (Dollars in thousands) ​ 2023 ​ 2024 ​ 2025 ​ 2026 ​ 2027 ​ Thereafter ​ Total ​ Value Fixed rate: ​ ​ ​ ​ ​ ​ ​ ​ ​ Long‑term debt ​ $ 25,261 ​ $ 62,083 ​ $ 42,100 ​ $ 29,076 ​ $ 47,291 ​ $ 203,364 ​ $ 409,175 ​ $ 378,943 ​ Weighted average interest rate ​ 4.24 % 4.37 % 4.27 % 3.96 % 3.74 % 4.08 % 4.10 % 5.87 % Variable rate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long‑term debt(1) ​ $ — ​ $ — ​ $ — ​ $ 21,800 ​ $ — ​ $ — ​ $ 21,800 ​ $ 21,800 ​ (1) Our credit facility matures on December 31, 2026 and bears interest equal to 30-day SOFR plus the applicable margin.
These changes would not have any impact on our net income or cash. ​ 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, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Market (Dollars in thousands) ​ 2024 ​ 2025 ​ 2026 ​ 2027 ​ 2028 ​ Thereafter ​ Total ​ Value Fixed rate: ​ ​ ​ ​ ​ ​ ​ ​ ​ Long‑term debt ​ $ 61,779 ​ $ 41,477 ​ $ 29,670 ​ $ 47,923 ​ $ 38,873 ​ $ 202,843 ​ $ 422,565 ​ $ 397,031 ​ Weighted average interest rate ​ 4.63 % 4.30 % 4.01 % 3.77 % 4.58 % 4.33 % 4.31 % 5.93 % Variable rate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long‑term debt(1)(2) ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ (1) As of December 31, 2023, there was no balance outstanding on our credit facility.
Since 2021 (through March 6, 2023), we provided The Vue with an aggregate of $2.9 million to cover, among other things, operating cash flow shortfalls and capital expenditures, and we estimate that in the balance of 2023, we will provide approximately $538,000 in funding for this property.
Since 2021 (through March 1, 2024), we provided The Vue with an aggregate of $3.4 million to cover, among other things, operating cash flow shortfalls and capital expenditures, and the amount to be funded in 2024, if any, has not been definitively determined.
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. ​ Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable. ​ Item 9A. Controls and Procedures.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—General Challenges and Uncertainties. ” ​ ​ 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. ​ ​ 47 Table of Contents Item 9.
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.
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.
This property accounted for (i) $915,000 of rental income in 2022 and accounts for 1.0% of 2023 contractual rental income and (ii) in 2022, $197,000, $170,000 and $210,000 of interest expense, real estate operating expense and depreciation and amortization expense, respectively, at this property.
As a result, we estimate that (i) from January 1, 2024 through the remaining lease term, we will generate $120,000 of rental income and (ii) that through 2024, we will incur approximately $230,000, $180,000 and $170,000 of interest expense, real estate operating expense and depreciation and amortization expense, respectively. ​ During 2023, this property accounted for (i) $893,000 of rental income and (ii) $198,000, $188,000 and $206,000 of interest expense, real estate operating expense and depreciation and amortization expense, respectively, and during 2022, this property accounted for (iii) $915,000 of rental income and (iv) $197,000, $170,000 and $210,000 of interest expense, real estate operating expense and depreciation and amortization expense, respectively.
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 $3.8 million of capital and other expenditures) from the foregoing, as well as property financings, property sales and sales of our common stock.
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 $2.7 million of capital expenditures) from the foregoing, as well as property financings, property sales and sales of our common stock. ​ The following table sets forth, as of December 31, 2023, information with respect to our mortgage debt that is payable from January 2024 through December 31, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in thousands) 2024 2025 2026 Total Amortization payments ​ $ 11,873 ​ $ 10,627 ​ $ 10,491 ​ $ 32,991 Principal due at maturity ​ 49,906 ​ 30,850 ​ 19,179 ​ 99,935 Total ​ $ 61,779 ​ $ 41,477 ​ $ 29,670 ​ $ 132,926 ​ 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 2024 through 2026.
Due to the limited number of health and fitness operators, and the presence nearby of another health and fitness facility, it may be difficult to re-lease this property to another such operator, and if we are unable to re-lease this property to such an operator, it may be costly to reconfigure the space for another tenant. ​ Bed Bath and Beyond ​ Bed Bath & Beyond (“BBBY”) leases, through 2027, a 32,138 square foot property located in Kennesaw, Georgia.
At December 31, 2023, the variable rate mortgage debt (bearing an interest rate of daily SOFR plus 300 basis points) on this property is $4.0 million and is scheduled to mature in September 2024. ​ It will be difficult, due to the presence of another health and fitness facility located nearby, to re-lease this property to another health and fitness operator, and if we are unable to re-lease this property to such an operator, it will be costly to reconfigure the space for use other than as a fitness facility.
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 .” 49 Table of Contents Item 8. Financial Statements and Supplementary Data.
Our credit facility matures on December 31, 2026 and bears interest equal to 30-day SOFR plus the applicable margin. The applicable margin varies based on the ratio of total debt to total value. See “ Item 7.
Regal’s parent, Cineworld Group plc, filed for Chapter 11 bankruptcy protection in September 2022.
Regal’s parent, Cineworld Group plc, filed for Chapter 11 bankruptcy protection in September 2022 and as a result, we and Regal amended the leases at these properties to, among other things, shorten the lease terms and reduce the rent payable.
Consolidated Properties At December 31, 2022, our Indianapolis, Indiana property had mortgage debt, intangible lease liabilities and intangible lease assets of approximately $3.8 million, $569,000 and $595,000, respectively.
After giving effect to the amendments, the leases expire in 2030 and as of January 1, 2024 provide for an aggregate base rent of $7.7 million payable over the remaining lease term. ​ At December 31, 2023, our Indianapolis, Indiana property had mortgage debt, intangible lease liabilities and intangible lease assets of approximately $3.6 million, $527,000 and $476,000, respectively.
This property generated $220,000 of rental income in 2022. ​ 36 Table of Contents Comparison of Years Ended December 31, 2022 and 2021 Results of Operations - ​ Revenues ​ The following table compares total revenues for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ December 31, ​ Increase ​ ​ (Dollars in thousands) 2022 2021 (Decrease) % Change Rental income, net $ 92,191 ​ $ 82,180 ​ $ 10,011 12.2 Lease termination fees ​ 25 ​ ​ 560 ​ ​ (535) (95.5) Total revenues $ 92,216 ​ $ 82,740 ​ $ 9,476 11.5 ​ 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) 2022 2021 (Decrease) % Change Acquisitions (1) ​ $ 4,433 ​ $ 636 ​ $ 3,797 ​ 597.0 Dispositions (2) ​ ​ 618 ​ ​ 3,576 ​ ​ (2,958) ​ (82.7) Same store (3) ​ ​ 87,140 ​ ​ 77,968 ​ ​ 9,172 ​ 11.8 Rental income, net ​ $ 92,191 ​ $ 82,180 ​ $ 10,011 ​ 12.2 (1) The 2022 column represents rental income from properties acquired since January 1, 2021; the 2021 column represents rental income from properties acquired during the year ended December 31, 2021.
We anticipate recognizing a gain of approximately $1.8 million on this sale during the three months ending March 31, 2024, of which the non-controlling interest’s share will be approximately $180,000. ​ ​ 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; ​ ● 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; and ​ ● maintaining and, over time, increasing our dividend. ​ 34 Table of Contents Comparison of Years Ended December 31, 2023 and 2022 Results of Operations - ​ Revenues ​ The following table compares total revenues for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Increase ​ ​ (Dollars in thousands) ​ 2023 2022 (Decrease) % Change Rental income, net ​ $ 90,646 ​ $ 92,191 ​ $ (1,545) (1.7) Lease termination fees ​ ​ — ​ ​ 25 ​ ​ (25) (100.0) Total revenues ​ $ 90,646 ​ $ 92,216 ​ $ (1,570) (1.7) ​ 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) ​ 2023 2022 (Decrease) % Change Acquisitions (1) ​ $ 5,413 ​ $ 2,472 ​ $ 2,941 ​ 119.0 Dispositions (2) ​ ​ 2,470 ​ ​ 3,641 ​ ​ (1,171) ​ (32.2) Same store (3) ​ ​ 82,763 ​ ​ 86,078 ​ ​ (3,315) ​ (3.9) Rental income, net ​ $ 90,646 ​ $ 92,191 ​ $ (1,545) ​ (1.7) (1) The 2023 column represents rental income from properties acquired since January 1, 2022; the 2022 column represents rental income from properties acquired during the year ended December 31, 2022.
If an agreement is not reached or third party approvals not obtained, it will be difficult and costly (due, among other things, to the unique configuration of theater properties) to find a replacement tenant. We summarize below certain information about these properties. 1.
If Regal continues to face financial challenges, it will be difficult and costly (due, among other things, to the limited number of exhibitors and the unique configuration of theater properties) to find a replacement tenant. ​ 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.
Removed
Item 1A. Risk Factors ” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for information regarding our Manahawkin Property. ​ Competition ​ The U.S. commercial real estate investment market, and in particular, the market for industrial properties, is highly competitive.
Added
The table below provides information about such debt as of December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current ​ Interest Rate Property ​ Principal Amount ​ Maturity Date ​ Interest Rate ​ Reset Date Lexington, Kentucky ​ $ 5,279,000 ​ June 2047 ​ 3.85 % ​ June 2029 Kennesaw, Georgia ​ ​ 4,467,000 ​ December 2041 ​ 6.50 ​ ​ December 2030 Hamilton, Ohio ​ ​ 3,969,000 ​ September 2024 ​ 8.40 ​ ​ n/a Deptford, NJ ​ ​ 2,277,000 ​ February 2041 ​ 3.95 ​ ​ February 2026 ​ ​ $ 15,992,000 ​ ​ ​ ​ ​ ​ ​ 31 Table of Contents Challenges and Uncertainties Facing Certain Properties and Tenants ​ Set forth below is a description of the challenges and uncertainties facing certain tenants or properties.
Removed
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.
Added
Specifically, prior to the amendments, the leases were scheduled to expire in 2032 and 2035 and as of January 1, 2024, without giving effect to such amendments, would have provided for an aggregate base rent of $21.0 million through the remaining lease term.
Removed
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 for us.
Added
If we determine that under GAAP the property has been impaired, we may incur a substantial impairment charge and if we sell the property, we may recognize a substantial loss.
Removed
There can be no assurance that we will be able to compete successfully with such entities in our acquisition, development and leasing activities. Regulation Environmental Investments in real property create the potential for environmental liability on the part of the owner or operator of such real property.
Added
See Note 6 to our consolidated financial statements. ​ 32 Table of Contents LA Fitness ​ LA Fitness leases from us three properties pursuant to three separate leases, including a 38,000 square foot health and fitness facility in Hamilton, Ohio. LA Fitness terminated the lease at the Hamilton, Ohio property effective as of May 1, 2024.
Removed
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.
Added
We will be adversely effected if we surrender this property to the lender or if we pay off the mortgage debt without obtaining a suitable replacement tenant at this property. ​ 2023 and Recent Developments ​ In 2023, we: ​ ● sold 10 properties ( i.e., seven restaurants and three retail properties) and an out-parcel at a multi-tenant retail property, for an aggregate net gain on sale of real estate of $17.0 million.
Removed
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.
Added
The properties sold accounted for $2.5 million, or 2.7%, and $3.0 million, or 3.3 %, of 2023 and 2022 rental income, net, respectively.
Removed
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.
Added
We estimate that, excluding any acquisitions, dispositions or lease amendments in 2024, rental income in 2024 will decrease by approximately $2.5 million from 2023 due to these sales. ​ ● paid down our credit facility by approximately $21.8 million primarily through the use of net proceeds from property sales – as of December 31, 2023 and March 1, 2024, no amounts were outstanding on the facility. ​ ● acquired a multi-tenant industrial property for an aggregate purchase price of $13.4 million.
Removed
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.
Added
This property accounts for $806,000, or 1.1%, of our 2024 contractual rental income. ​ ● through an unconsolidated joint venture in which we had a 50% equity interest, sold a multi-tenant shopping center located in Manahawkin, NJ for $36.5 million, of which our share was $18.3 million. In 2023, we recognized a $108,000 loss from the sale of this property.
Removed
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”).
Added
Our share of the net proceeds from this sale was $7.1 million.
Removed
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.
Added
We generated, in 2023, $1.1 million (including our $850,000 share of an impairment charge) of equity in loss and in 2022 and 2021, $210,000 and $11,000, respectively, of equity in earnings from this unconsolidated joint venture. ​ ● entered into, amended or extended 28 leases with respect to approximately 988,000 square feet. ​ ● repurchased approximately 499,000 shares of our common stock for an aggregate purchase price of approximately $9.6 million ( i.e ., an average price of $19.24 per share).
Removed
As of December 31, 2022, we have not been notified by any governmental 9 Table of Contents 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.
Added
We anticipate that we will continue to repurchase our stock subject to, among other things, the availability of funds and attractiveness of alternative investments. ​ 33 Table of Contents Subsequent to December 31, 2023, we: ● entered into a contract to sell a pad site at a multi-tenant retail shopping center in Lakewood, Colorado, which we own through a consolidated joint venture in which we hold a 90% interest, for $2.9 million.
Removed
While many of our leases mandate that the tenant is primarily responsible 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.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

19 edited+198 added−9 removed23 unchanged
Biggest changeOur 2023 contractual rental income: ● Includes an aggregate of $990,000 comprised of: (i) $607,000 of base rent for Bed Bath & Beyond, located in Kennesaw, Georgia, which is experiencing financial difficulty, (ii) $211,000 of base rent from a TGIF restaurant property in Hauppauge, New York which we sold in February 2023 and (iii) $172,000 of base rent from Party City, a tenant at our multi-tenant Lake Charles, Louisiana property, which declared Chapter 11 bankruptcy in January 2023. ● Excludes an aggregate of $7.7 million comprised of: (i) $2.1 million of base rent and $634,000 of COVID-19 rent deferral repayments due from Regal Cinemas (including our $237,000 share of base rent payable and $71,000 share of COVID-19 rent deferral repayments due from Regal Cinemas at our joint venture property) - (See “— Challenges and Uncertainties Facing Certain Tenants and Properties ”), (ii) $1.4 million representing our share of the base rent payable to our joint ventures (excluding amounts from Regal Cinemas noted above), (iii) 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, (iv) approximately $1.4 million of straight-line rent and $876,000 of amortization of intangibles, and (v) $12,000 of COVID-19 rent deferral repayments (other than those due from Regal Cinemas noted above) accrued to rental income in 2020, all of which was paid by January 31, 2023.
Biggest changeOur 2024 contractual rental income: ● Includes an aggregate of $2.9 million comprised of: (i) $1.3 million based on a negotiated but unsigned lease amendment from a tenant at our Brooklyn, New York office property, (ii) $1.2 million from Regal Cinemas, as to which there is uncertainty as to its collectability, (iii) $325,000 representing the base rent payable by Dick’s Sporting Goods (Champaign, Illinois) in the twelve months ending December 31, 2024, although such lease is subject to termination by the landlord or tenant upon 90 days’ notice and (iv) $120,000 from the LA Fitness lease in Hamilton, Ohio which terminates May 1, 2024. ● Excludes an aggregate of $1.5 million comprised of: (i) 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 and (ii) $235,000 representing our share of the base rent payable to our joint ventures.
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.
Generally, 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.
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. ​ In advance of the termination or expiration of any lease relating to any of our properties, we explore re-renting or selling such property to maximize our return, considering, among other factors, the income potential and market value of such property.
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. 7 Table of Contents ​ In advance of the termination or expiration of any lease relating to any of our properties, we explore re-renting or selling such property to maximize our return, considering, among other factors, the income potential and market value of such property.
We acquire, own and manage a geographically diversified portfolio consisting primarily of industrial and retail 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.
We acquire, own and manage a geographically diversified portfolio consisting of industrial and, to a lesser extent, retail 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.
(2) Excludes an aggregate of 26,517 square feet of vacant space. Financing, Re-Renting and Disposition of Our Properties ​ Our credit facility provides us with a source of funds that is used to acquire properties, payoff existing mortgages, and to a more limited extent, invest in joint ventures, improve properties and for working capital purposes.
(2) Excludes an aggregate of 125,353 square feet of vacant space. Financing, Re-Renting and Disposition of Our Properties ​ Our credit facility provides us with a source of funds that is used to acquire properties, payoff existing mortgages, and to a more limited extent, invest in joint ventures, improve properties and for working capital purposes.
Many of our tenants (including franchisees of national chains) operate on a national basis including, among others, Advanced Auto, Applebee’s, Burlington Coat Factory, Cargill, CVS, Famous Footwear, FedEx, Ferguson Enterprises, LA Fitness, Marshalls, NARDA Holdings, Inc., Northern Tool, Office Depot, PetSmart, 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.
Many of our tenants (including franchisees of national chains) operate on a national basis including, among others, Advanced Auto, Ashley Furniture, Burlington Coat Factory, Cargill, CVS, Famous Footwear, FedEx, Ferguson Enterprises, Hobby Lobby, Home Depot USA, LA Fitness, Marshalls, NARDA Holdings, Inc., Northern Tool, Office Depot, PetSmart, Ross Stores, Shutterfly, The Toro Company, US Lumber and Walgreens, and some of our tenants operate on a regional basis, including Havertys Furniture and Giant Food Stores.
These 120 properties are located in 31 states and have an aggregate of approximately 11.2 million square feet (including an aggregate of approximately 365,000­ square feet at properties owned by our joint ventures). ​ As of December 31, 2022: ● our 2023 contractual rental income (as described in “— Our Tenants ”) is $71.5 million; ● the occupancy rate of our properties is 99.8% based on square footage; ● the weighted average remaining term of our mortgage debt is 6.5 years and the weighted average interest rate thereon is 4.10%; and ● the weighted average remaining term of the leases generating our 2023 contractual rental income is 5.9 years.
These 110 properties are located in 31 states and have an aggregate of approximately 10.9 million square feet (including an aggregate of approximately 46,000 ­square feet at properties owned by our joint ventures). ​ As of December 31, 2023: ● our 2024 contractual rental income (as described in “— Our Tenants ”) is $71.3 million; ● the occupancy rate of our properties is 98.8% based on square footage; ● the weighted average remaining term of our mortgage debt is 5.9 years and the weighted average interest rate thereon is 4.31%; and ● the weighted average remaining term of the leases generating our 2024 contractual rental income is 5.5 years.
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.
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.
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 Investors”), 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.
This property generated $220,000 of rental income in 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; ● 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; and ● increasing our dividend over time. 4 Table of Contents 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 anticipate recognizing a gain of approximately $1.8 million on this sale during the three months ending March 31, 2024, of which the non-controlling interest’s share will be approximately $180,000. ​ ​ 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; ● 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; and ● maintaining and, over time, increasing our dividend. ​ 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.
Gould, our vice chairman. ​ 5 Table of Contents 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 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 withstand changing economic conditions and other challenges, such as those presented by the COVID-19 pandemic. ​ ​ Our Tenants The following table sets forth information about the diversification of our tenants by industry sector as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of ​ ​ Number of ​ Number of ​ 2023 Contractual ​ 2023 Contractual Type of Property ​ Tenants ​ Properties ​ Rental Income(1) ​ Rental Income Industrial 68 ​ 54 ​ $ 45,214,975 63.2 ​ Retail—General 53 ​ 28 ​ 11,996,674 16.8 ​ Retail—Furniture 2 ​ 12 ​ 4,647,424 6.5 ​ Health & Fitness 1 ​ 3 ​ 3,248,781 4.5 ​ Restaurant 9 ​ 10 ​ 2,903,132 4.1 ​ Retail—Office Supply(2) 1 ​ 5 ​ 2,085,527 2.9 ​ Other 3 ​ 3 ​ 1,403,711 2.0 ​ Theater 1 ​ 2 ​ — — ​ ​ 138 117 ​ $ 71,500,224 100.0 ​ 6 Table of Contents (1) Our 2023 contractual rental income represents, after giving effect to any abatements, concessions, deferrals or adjustments, the base rent payable to us in 2023 through the stated expiration of such leases, under leases in effect at December 31, 2022.
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; ● an evaluation of the credit quality of the tenant; ● alternate uses or tenants for the property; ● local demographics (population and rental trends); ● the purpose for which the property is used ( i.e ., industrial, retail or other); ● the terms of tenant leases, including co-tenancy provisions and the relationship between current rents and market rents; ● the potential to finance and/or refinance the property; ● 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 withstand changing economic conditions and other challenges. 5 Table of Contents Our Tenants The following table sets forth information about the diversification of our tenants by industry sector as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of ​ ​ Number of ​ Number of ​ 2024 Contractual ​ 2024 Contractual Type of Property ​ Tenants ​ Properties ​ Rental Income (1) ​ Rental Income Industrial 67 ​ 55 ​ $ 47,114,698 66.1 ​ Retail—General 53 ​ 27 ​ 11,160,441 15.7 ​ Retail—Furniture 2 ​ 10 ​ 3,983,899 5.6 ​ Health & Fitness 1 ​ 3 ​ 2,645,989 3.7 ​ Retail—Office Supply(2) 1 ​ 5 ​ 2,085,527 2.9 ​ Other 4 ​ 3 ​ 1,908,522 2.7 ​ Restaurant 6 ​ 3 ​ 1,179,911 1.7 ​ Theater 1 ​ 2 ​ 1,176,619 1.6 ​ ​ 135 108 ​ $ 71,255,606 100.0 ​ (1) Our 2024 contractual rental income represents, after giving effect to any abatements, concessions, deferrals or adjustments, the base rent payable to us in 2024 through the stated expiration of such leases, under leases in effect at December 31, 2023.
As of December 31, 2022, we own 117 properties and participate in joint ventures that own three properties.
As of December 31, 2023, we own 108 properties and participate in joint ventures that own two properties.
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.
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. 6 Table of Contents Leases representing 69.2% of our 2024 contractual rental income provide for either periodic contractual rent increases or a rent increase based on the consumer price index.
Percentage rent contributed $85,000, $70,000 and $45,000 of rental income in 2022, 2021 and 2020, 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.
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 weighted average remaining term of our leases was 5.5 years, 5.9 years and 6.0 years at December 31, 2023, 2022 and 2021, respectively.
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.
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. 4 Table of Contents We identify properties through the network of contacts our, and our affiliates, senior management, which contacts include real estate brokers, private equity firms, banks and law firms.
Leases representing 69.7% of our 2023 contractual rental income provide for either periodic contractual rent increases or a rent increase 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).
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 $107,000, $85,000 and $70,000 of rental income in 2023, 2022 and 2021, respectively.
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. ​ 8 Table of Contents Our Joint Ventures ​ As of December 31, 2022, we own a 50% equity interest in three joint ventures that own properties with approximately 365,000 square feet of space.
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. ​ In 2023, we sold ten properties ( i.e ., seven restaurants and three retail) and an out-parcel at a multi-tenant retail property.
The weighted average remaining term of our leases was 5.9 years, 6.0 years, and 5.6 years at December 31, 2022, 2021 and 2020, respectively. 7 Table of Contents The following table sets forth scheduled expirations of leases at our properties as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Approximate ​ ​ ​ ​ ​ ​ ​ Square ​ ​ ​ ​ Percentage of ​ ​ ​ ​ Footage ​ 2023 Contractual ​ 2023 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 2023 15 ​ 596,409 ​ $ 4,153,484 ​ 5.8 2024 25 ​ 871,902 ​ 6,106,942 ​ 8.5 2025 14 ​ 521,249 ​ 5,113,151 ​ 7.2 2026 17 ​ 978,624 ​ 5,743,175 ​ 8.0 2027 33 ​ 2,027,091 ​ 13,760,776 ​ 19.3 2028 16 ​ 1,316,623 ​ 7,487,328 ​ 10.5 2029 6 ​ 1,140,000 ​ 5,440,420 ​ 7.6 2030 11 ​ 480,945 ​ 5,102,314 ​ 7.1 2031 10 ​ 819,287 ​ 4,707,672 ​ 6.6 2032 and thereafter 29 ​ 2,086,203 ​ 13,884,962 ​ 19.4 ​ 176 10,838,333 ​ $ 71,500,224 100.0 (1) Lease expirations do not give effect to the exercise of existing renewal options.
The following table sets forth scheduled expirations of leases at our properties as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of ​ ​ ​ ​ Approximate ​ ​ ​ 2024 Contractual ​ ​ Number of ​ Square Footage ​ 2024 Contractual ​ Rental Income ​ ​ Expiring ​ Subject to ​ Rental Income Under ​ Represented by Year of Lease Expiration (1) Leases Expiring Leases (2) Expiring Leases Expiring Leases 2024 15 ​ 647,889 ​ $ 2,575,111 ​ 3.6 2025 15 ​ 660,289 ​ 5,477,987 ​ 7.7 2026 19 ​ 1,007,595 ​ 6,229,965 ​ 8.7 2027 35 ​ 2,185,789 ​ 14,520,670 ​ 20.4 2028 22 ​ 1,442,680 ​ 9,831,127 ​ 13.8 2029 13 ​ 1,276,554 ​ 7,174,637 ​ 10.1 2030 13 ​ 625,026 ​ 6,679,464 ​ 9.4 2031 7 ​ 864,358 ​ 4,320,061 ​ 6.1 2032 9 ​ 325,456 ​ 3,250,054 ​ 4.6 2033 ​ 10 ​ 860,631 ​ ​ 7,533,634 ​ 10.5 2034 and thereafter 7 ​ 829,976 ​ 3,662,896 ​ 5.1 ​ 165 10,726,243 ​ $ 71,255,606 100.0 (1) Lease expirations do not give effect to the exercise of existing renewal options.
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. 2022 and Recent Developments ​ In 2022, we: ​ ● acquired six industrial properties for an aggregate purchase price of $56.5 million.
The information on our website is not part of this report. 2023 and Recent Developments ​ In 2023, we: ​ ● sold 10 properties ( i.e., seven restaurants and three retail properties) and an out-parcel at a multi-tenant retail property, for an aggregate net gain on sale of real estate of $17.0 million.
Removed
These properties account for $3.4 million, or 4.7%, of our 2023 contractual rental income. ​ ● sold seven properties ( i.e., two retail, four restaurants and one industrial), for an aggregate net gain on sale of real estate of $16.8 million.
Added
These filings are also available on the SEC’s website at www.sec.gov.
Removed
The properties sold accounted for $618,000, or 0.7%, and $2.5 million, or 3.0%, of 2022 and 2021 rental income, net, respectively. ​ ● entered into, amended or extended 19 leases with respect to approximately 1.1 million square feet, including a: ​ - 10-year lease extension through 2033 with Shutterfly, Inc. in South Carolina, which accounts for 2.3% of 2023 contractual rental income, for an annual base rent of $1.2 million through June 2023, increasing to $2.0 million from July 2023 through June 2024, and increasing at least 3% annually thereafter, subject to a cap of 6%. ​ - new 20-year lease agreement through 2042 with The Lion Brewery in Pennsylvania, which accounts for 2.0% of 2023 contractual rental income, for an annual base rent of $1.4 million through February 2023 and increasing 3% annually thereafter. ​ - seven-year lease extension through 2030 with Power Distributors, LLC in Iowa, which accounts for 1.1% of 2023 contractual rental income, for an annual base rent of $782,000 3 Table of Contents through October 2023, increasing to $864,000 from November 2023 through October 2024, and increasing 3% annually thereafter. ​ - five-year lease extension through 2028 with FedEx in Indianapolis, which accounts for 1.1% of 2023 contractual rental income, for an annual base rent of $685,000 through February 2023, increasing to $848,000 from March 2023 through February 2024, and increasing 3% annually thereafter. ​ - 10-year lease extension through 2033 with Transcendia in South Carolina, which accounts for 0.7% of 2023 contractual rental income, for an annual base rent of $493,000 through September 2023, increasing to $533,000 from October 2023 through September 2024, and increasing 3.5% annually thereafter. ​ - new eight-year lease agreement through 2030 with Ollie’s Bargain Outlet, at our formerly vacant Crystal Lake, Illinois property, which accounts for 0.4% of 2023 contractual rental income, for an annual base rent of $268,000 through October 2030. ​ ● generated an aggregate of $10.0 million from the resolution of two lawsuits, including $5.4 million from the settlement of a lawsuit related to our former assisted living facility in Round Rock, Texas and $4.6 million from the settlement of a lawsuit related to a property located in Beachwood, Ohio. ​ ● entered into an amendment to our credit facility which, among other things, (i) extended the maturity date to December 31, 2026 and (ii) increased the aggregate amount that may be used for renovation and operating expense purposes to the lesser of $40.0 million and 40% of the borrowing base. ​ ● repurchased approximately 208,000 shares of our common stock for an aggregate purchase price of approximately $5.2 million. ​ Subsequent to December 31, 2022, we: ● sold in February 2023, a restaurant property in Hauppauge, New York for $4.2 million.
Added
The properties sold accounted for $2.5 million, or 2.7%, and $3.0 million, or 3.3 %, of 2023 and 2022 rental income, net, respectively.
Removed
We anticipate recognizing a gain on sale of real estate, net, of approximately $1.5 million during the three months ending March 31, 2023.
Added
We estimate that, excluding any acquisitions, dispositions or lease amendments in 2024, rental income in 2024 will decrease by approximately $2.5 million from 2023 due to these sales. ​ ● paid down our credit facility by approximately $21.8 million primarily through the use of net proceeds from property sales – as of December 31, 2023 and March 1, 2024, no amounts were outstanding on the facility. ​ ● acquired a multi-tenant industrial property for an aggregate purchase price of $13.4 million.
Removed
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 18 retail properties.
Added
This property accounts for $806,000, or 1.1%, of our 2024 contractual rental income. ​ ● through an unconsolidated joint venture in which we had a 50% equity interest, sold a multi-tenant shopping center located in Manahawkin, NJ for $36.5 million, of which our share was $18.3 million. In 2023, we recognized a $108,000 loss from the sale of this property.
Removed
As a result of the focus on industrial properties and the sale of retail properties, industrial properties generated 57.3% of rental income, net, in 2022, compared to 35.1% of rental income, net in 2017, and retail properties generated 25.7% of rental income, net, in 2022, compared to 43.7% of rental income, net, in 2017. ​ 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.
Added
Our share of the net proceeds from this sale was $7.1 million.
Removed
At December 31, 2022, our investment in these joint ventures was approximately $10.4 million and the occupancy rate at these properties, based on square footage, was 58.7%. See “Item 2.
Added
We generated, in 2023, $1.1 million (including our $850,000 share of an impairment charge) of equity in loss and in 2022 and 2021, $210,000 and $11,000, respectively, of equity in earnings from this unconsolidated joint venture. ​ ● entered into, amended or extended 28 leases with respect to approximately 988,000 square feet. 3 Table of Contents ​ ● repurchased approximately 499,000 shares of our common stock for an aggregate purchase price of approximately $9.6 million ( i.e ., an average price of $19.24 per share). ​ Subsequent to December 31, 2023, we: ● entered into a contract to sell a pad site at a multi-tenant retail shopping center in Lakewood, Colorado, which we own through a consolidated joint venture in which we hold a 90% interest, for $2.9 million.
Removed
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, 2022, we anticipate that our share of the base rent payable in 2023 to our joint ventures is approximately $1.4 million (excluding our $237,000 share of base rent and $71,000 share of COVID-19 rent deferral repayments payable by Regal Cinemas, at our multi-tenant community shopping center in Manahawkin, New Jersey).
Added
The buyer’s right to terminate the contract expired in February 2024 and the sale is anticipated to close during the quarter ending March 31, 2024.
Removed
Our property in Manahawkin, New Jersey, which we refer to as the “Manahawkin Property”, is expected to contribute 83.3% of the aggregate base rent payable by all of our joint ventures in 2023.
Added
Generally, we sold these properties due to our belief that such property had achieved its maximum potential value; our concern with respect to the long-term prospects for the tenant or the geographic sub-market; or our concern in our ability, on acceptable terms, to refinance the property’s mortgage debt or re-lease the property.
Removed
Base rent for leases accounting for 39.1%, 28.6% and 32.3% of the aggregate base rent payable to all of our joint ventures in 2023, is payable pursuant to leases expiring from 2023 to 2024, from 2025 to 2026, and thereafter, respectively. See “
Added
We used a significant portion of these net proceeds to pay off $21.8 million of credit facility debt . ​ Competition ​ The U.S. commercial real estate investment market, and in particular, the market for industrial properties, is highly competitive. We compete with many entities engaged in the acquisition, leasing and operation of commercial properties.
Added
As such, we compete with other investors for a limited supply of properties and financing for these properties.
Added
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 for us.
Added
We can provide no assurance that we will be able to compete successfully in the commercial real estate industry. Regulation Environmental Investments in real property create the potential for environmental liability on the part of the owner or operator of such real property.
Added
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.
Added
We generally obtain a Phase I environmental study (which involves inspection without soil sampling or ground water analysis) conducted by independent environmental consultants prior to acquiring a property 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.
Added
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.
Added
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.
Added
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”).
Added
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.
Added
As of December 31, 2023, 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. 8 Table of Contents Other Regulations State and local governmental authorities regulate the use of our properties.
Added
While many of our leases mandate that the tenant is primarily responsible 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.
Added
Human Capital Resources As of December 31, 2023, we had 10 full-time employees (including 5 full-time executive officers), who devote substantially all of their business time to our activities.
Added
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., which we refer to as “Majestic Property.” Majestic Property is wholly-owned by the Vice Chairman of our Board of Directors and it compensates certain of our executive officers. ​ In 2023, pursuant to the compensation and services agreement, we paid Majestic Property approximately $3.3 million for the Services plus $317,000 for our share of all direct office expenses, including rent, telephone, postage, computer services, internet usage and supplies.
Added
Included in the $3.3 million is $1.5 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.
Added
Based on our portfolio of properties at December 31, 2023, we estimate that the property management fee in 2024 will be approximately $1.4 million. ​ We provide a competitive benefits program to help meet the needs of our employees.
Added
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.
Added
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. 9 Table of Contents Information about our Executive Officers ​ Set forth below is a list of our executive officers whose terms expire at our 2024 annual board of directors’ meeting.
Added
The business history of our executive officers, who are also directors, will be provided in our proxy statement to be filed with the SEC not later than April 29, 2024: ​ NAME AGE POSITION WITH THE COMPANY Matthew J. Gould* ​ 64 ​ Chairman of the Board Fredric H. Gould* ​ 88 ​ Vice Chairman of the Board Patrick J.
Added
Callan, Jr. ​ 61 ​ President, Chief Executive Officer and Director Lawrence G. Ricketts, Jr. ​ 47 ​ Executive Vice President and Chief Operating Officer Jeffrey A. Gould* ​ 58 ​ Senior Vice President and Director Isaac Kalish** ​ 48 ​ Senior Vice President and Chief Financial Officer David W. Kalish** ​ 76 ​ Senior Vice President—Financial Officer Mark H.
Added
Lundy ​ 61 ​ Senior Vice President Israel Rosenzweig ​ 76 ​ Senior Vice President Richard M. Figueroa ​ 56 ​ Senior Vice President Justin Clair ​ 41 ​ Executive Vice President Mili Mathew ​ 40 ​ Vice President—Financial Alysa Block ​ 63 ​ Treasurer * Matthew J. Gould and Jeffrey A. Gould are Fredric H.
Added
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, Executive Vice President since 2006 and served as Vice President from 1999 through 2006. Isaac Kalish. Mr.
Added
Kalish has served as our Chief Financial Officer since 2023, as Senior Vice President since 2022 and as Vice President from 2013 through 2022.
Added
He has served as Treasurer of the managing general partner of Gould Investors since 2013 and as its Assistant Treasurer from 2012, as Senior Vice President since 2022, as Vice President and Treasurer of BRT Apartments Corp. since 2013 and 2014, respectively, and as its Assistant Treasurer from 2009 through 2013. He is a certified public accountant. David W. Kalish.
Added
Mr. Kalish has served since 2023 as our Senior Vice President-Finance, and from 1990 to 2023, as Chief Financial Officer and Senior Vice President. Since 1998, he has served as Senior Vice President, Finance and from 1990 to 1998, as Vice President of BRT Apartments.
Added
Since 1990, he has served as Senior Vice President and Chief Financial Officer of the managing general partner of Gould Investors. Mr. Kalish is a certified public accountant. Mark H. Lundy. Mr. Lundy has served as our Senior Vice President since 2006 and as Vice President from 2000 through 2006.
Added
He has served as Senior Vice President of BRT Apartments since 2006, and as its Vice President from 1993 to 2006. Mr. Lundy has served as President and Chief Operating Officer of the managing general partner of Gould Investors since 2013 and as its Vice President from 1990 through 2012.
Added
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.
Added
He has served as Chairman of the Board of Directors of BRT Apartments since 2013, as Vice Chairman of its Board of Directors from 2012 through 2013, and as its Senior Vice President from 1998 through 2012. Since 1997, he has served as a Vice President of the managing general partner of Gould Investors. Richard M. Figueroa. Mr.
Added
Figueroa has served as our Senior Vice President since 2019, as Vice President from 2001 through 2019, as Vice President of BRT Apartments 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. ​ 10 Table of Contents Justin Clair. Mr.
Added
Clair has served as Executive Vice President since 2023, as Senior Vice President—Acquisitions from 2019 through 2023, as Vice President from 2014 through 2019, as Assistant Vice President from 2010 through 2014, and has been employed by us since 2006. Mili Mathew. Ms.
Added
Mathew has served as Chief Accounting Officer since 2023, Vice President—Financial, since 2022, as Assistant Vice President—Financial, from 2020 through 2022, and has been employed by us since 2014. Alysa Block. Ms. Block has been our Treasurer since 2007 and served as Assistant Treasurer from 1997 to 2007. Ms.
Added
Block also served as the Treasurer of BRT Apartments from 2008 through 2013, and as its Assistant Treasurer from 1997 to 2008. ​ Item 1A. Risk Factors. ​ Set forth below is a discussion of certain risks affecting our business.
Added
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.
Added
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.
Added
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 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.
Added
Substantially all of our rental income is derived from rent paid by our tenants.
Added
From 2024 through 2029, the following leases expire: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of ​ ​ Number of ​ 2024 Contractual ​ 2024 Contractual Leases Expiring December 31, ​ Leases ​ Rental Income ​ Rental Income 2024 - 2026 ​ 49 ​ $ 14,283,063 ​ 20.0 2027 - 2029 ​ 70 ​ ​ 31,526,434 ​ 44.3 ​ If our tenants, and in particular, our significant tenants, (i) do not renew their leases upon lease expiration, (ii) default on their obligations or (iii) seek rent relief, lease renegotiation or other accommodations, our revenues would 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.
Added
At the same time, we would remain responsible for the payment of the mortgage obligations with respect to the related properties, would become responsible for the operating expenses ( e.g ., real estate taxes, maintenance and insurance) related to these properties, and, in the event of tenant defaults, would incur expenses in enforcing our rights as landlord.
Added
Our efforts to find replacement tenants may be challenged as there are a limited number of tenants interested in certain types of properties, such as our theaters ( i.e., Regal Cinemas) and health and fitness centers ( i.e., LA Fitness) which accounts in the aggregate for $3.8 million, or 5.4%, of 2024 contractual rental income and the cost of reconfiguring such properties to make them more attractive to a broader set of potential tenants may be prohibitive.
Added
Even if we find replacement tenants or renegotiate leases with current tenants, the terms of the new or renegotiated leases, after giving effect to tenant concessions or the cost of required renovations/ reconfigurations may be less favorable than current lease terms and could reduce the amount of cash available to meet expenses and pay dividends.
Added
If we are unable to re-rent properties on favorable terms with respect to properties at which tenants default on their rent obligation or do not renew their leases at lease expiration, our results of operations, cash flow and financial condition will be adversely affected. 11 Table of Contents 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.
Added
Approximately 66.1% and 24.2% of our 2024 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 would have an adverse effect on our results of operations, liquidity and financial condition .
Added
Traditional retail tenants account for 24.2% of our 2024 contractual rental income and the competition that such tenants face from e-commerce retail sales could adversely affect our business.

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