Breaking Down One Liberty Properties, Inc. (OLP) Financial Health: Key Insights for Investors

You're looking at One Liberty Properties, Inc. (OLP) because the triple-net lease model, especially in industrial real estate, offers stability, but honestly, the near-term picture has a few speed bumps you need to understand before you commit capital. The direct takeaway is that while the strategic pivot to industrial assets is defintely a long-term tailwind-with approximately 80% of Annual Base Rent now coming from that sector-investors must reconcile the high dividend yield with cash flow coverage, as the Q2 2025 Dividend Payout to FFO (Funds From Operations) hit a concerning 1.16, meaning the dividend is not fully covered by FFO. Still, the firm is executing on its strategy, with nearly $189 million in acquisitions completed or slated for 2025, which should drive the full-year consensus Revenue estimate of around $96.95 million and FFO per share in the $1.87 to $2.00 range. Here's the quick math: that high AFFO payout ratio of around 96.7% suggests any macro headwind, like delayed interest rate cuts, could pressure the dividend, but the strong 98.2% occupancy rate and $109.4 million in available liquidity as of October 2025 offer a decent margin of safety for now. So, is this a high-yield opportunity or a dividend trap? You need to dig into the details of that industrial transformation.

Revenue Analysis

You need a clear picture of where the money is coming from at One Liberty Properties, Inc. (OLP), and the direct takeaway is this: OLP is successfully executing a pivot, with revenue growth accelerating as it transforms into a pure-play industrial real estate investment trust (REIT). The primary revenue stream is, of course, rent from its portfolio of properties, but the mix has changed dramatically.

For the nine months ended September 30, 2025, OLP reported total revenue of $72.49 million, a solid increase from the $66.71 million reported for the same period a year prior. That's a strong sign of momentum. Looking at the trailing twelve months (TTM) ending in mid-2025, the company's revenue totaled $94.78 million, representing a year-over-year growth rate of approximately 4.66% over the 2024 annual revenue of $90.56 million. Honestly, for a REIT in this environment, that's defintely a respectable jump.

The Industrial Segment Dominance

The biggest story in OLP's revenue is the strategic shift toward industrial assets. This isn't just a minor adjustment; it's a full portfolio transformation. This move is designed to capture the stability and higher growth potential of the logistics and distribution sector.

• Industrial properties now generate approximately 80% of the company's Annual Base Rent (ABR) as of the end of the third quarter of 2025.
• This segment's contribution is up significantly, meaning less exposure to retail and other non-core property types.
• The focus on industrial assets provides a more predictable and durable cash flow stream, which is exactly what you want to see.

Growth Drivers and Portfolio Recycling

The revenue growth isn't accidental; it's the direct result of disciplined capital recycling (selling older, lower-growth properties to fund new, higher-growth acquisitions). Here's the quick math on their recent activity:

The sale of non-core assets, like the four properties sold in Q3 2025 that generated $16.3 million in net proceeds, is critical. This capital is being immediately redeployed into industrial properties, which will further solidify the 80% ABR contribution and drive future rent growth. What this estimate hides is the one-time gain from sales, which boosts net income but isn't a recurring revenue stream, so focus on the ABR percentage for long-term health. For a deeper dive into who is betting on this strategy, you should look at Exploring One Liberty Properties, Inc. (OLP) Investor Profile: Who's Buying and Why?

Profitability Metrics

You want to know if One Liberty Properties, Inc. (OLP) is converting its rental income efficiently into bottom-line profit, and the short answer is yes, they are, but the trend shows a slight squeeze. The company's latest trailing twelve months (TTM) data, which is the closest to the 2025 fiscal year end, shows remarkably high margins compared to the broader Real Estate Investment Trust (REIT) sector, yet a multi-year decline in gross profitability suggests rising property-level costs.

A Deep Dive into One Liberty Properties, Inc. (OLP)'s Profitability

For the latest annual period, which is a strong proxy for the 2025 fiscal year, One Liberty Properties, Inc. generated $96.34 million in revenue and a $30.42 million net income. Here's the quick math on their core margins, which tell a compelling story of operational strength, especially in a high-interest-rate environment where every basis point matters.

The Gross Profit Margin of 79.55% is excellent, especially when compared to a major Industrial REIT competitor's 73.0%. This high figure reflects the nature of their triple-net lease model, where the tenant covers most property expenses, minimizing One Liberty Properties, Inc.'s cost of revenue.

Operational Efficiency and Margin Trends

The Operating Profit Margin of 53.25% is defintely a standout, nearly doubling the average TTM Operating Margin for the entire REIT sector, which is about 29.13%. This signals superior control over administrative and general expenses relative to their peers. But, still, a closer look at the trends reveals a challenge.

The Gross Profit Margin has been trending downward over the last few years, from 83.35% in 2021 to 79.55% in the TTM period ending Q3 2025. This is the cost management signal you need to watch. It suggests that while the triple-net structure is strong, the unreimbursed property-level costs or other direct expenses are rising faster than rental income.

The shift in their portfolio-moving toward industrial properties, which now account for approximately 80% of their Annual Base Rent (ABR) as of Q3 2025-is a strategic move to shore up long-term stability. This focus on industrial assets, which you can read more about in their Mission Statement, Vision, & Core Values of One Liberty Properties, Inc. (OLP), should lead to more predictable, long-term cash flows, but it may also come with a different cost structure than their legacy diversified portfolio.

Here's what the recent trend shows us:

• Gross Margin is contracting: The decline from 83.35% (2021) to 79.55% (TTM Q3 2025) is a four-point drop in property-level efficiency.
• Operating Margin is relatively stable: After a spike in 2022, the 53.25% TTM margin is a slight dip from 55.51% in 2023, showing management is keeping a lid on the overhead costs that fall below Gross Profit.
• The 31.57% Net Profit Margin is a solid conversion, but its stability will be tested by rising interest rates, which directly hit the bottom line through higher interest expense.

The opportunity here is that their margins are so far ahead of the industry that they have a significant buffer, but the action is to monitor their operational efficiency (Gross Margin) closely over the next four quarters. If this downward trend continues, it will erode their competitive advantage.

Debt vs. Equity Structure

You're looking at One Liberty Properties, Inc. (OLP) and trying to figure out if their growth is financed smartly or if they're taking on too much risk. As a net-lease Real Estate Investment Trust (REIT), OLP relies heavily on capital, and their structure leans more on debt than equity, which is a key point to understand.

As of September 30, 2025, One Liberty Properties, Inc. reported total debt of approximately $458.7 million. This debt is primarily composed of mortgages payable, which is typical for a REIT, and it's mostly well-laddered, fixed-rate debt. The company's total equity stood at about $305.8 million at the same time. While the balance sheet doesn't explicitly detail short-term debt in a single line item, their overall liabilities, including mortgages, other liabilities, and intangible lease liabilities, totaled $496.5 million. The core of their financing strategy is long-term, secured mortgage debt tied directly to their income-producing properties.

The crucial metric here is the Debt-to-Equity (D/E) ratio, which shows how much debt a company uses to finance its assets relative to the value of shareholders' equity. For One Liberty Properties, Inc., the D/E ratio for the trailing twelve months ending Q3 2025 was approximately 1.55. Here's the quick math: for every dollar of shareholder equity, the company has about $1.55 in debt. This is significantly higher than the average for Industrial REITs, which typically hover around 0.64. This higher ratio signals a more aggressive, debt-fueled growth approach, which can magnify returns but also raises the risk profile, especially in a high-interest-rate environment.

One Liberty Properties, Inc. has defintely been active on the debt side in 2025 to fuel its property acquisition strategy. They are managing this balance by using new mortgage debt to fund purchases, effectively trading a fixed, long-term liability for a new, income-producing asset. This is how they balance debt financing with equity funding-by keeping the debt secured and tied to specific, high-occupancy properties. For a deeper dive into who is investing in OLP, you should check out Exploring One Liberty Properties, Inc. (OLP) Investor Profile: Who's Buying and Why?

Recent debt and financing activity in 2025 highlights this strategy:

• In Q1 2025, they incurred $52.1 million in new mortgage debt at a weighted average rate of 6.2% to acquire four industrial properties.
• In August 2025, a property acquisition was funded with $14.0 million in new mortgage debt at an interest rate of 5.77%.
• In October 2025, they secured $13.8 million in new mortgage debt at 5.10% to close on a purchase.
• They also anticipate obtaining another $32.4 million in new mortgage debt at 5.45% for a property acquisition expected to close by year-end 2025.

What this estimate hides is the fact that most of the company's debt is well-structured with a weighted average interest rate of 4.79% and a long average remaining maturity of about six years. That fixed-rate structure provides a solid hedge against rising short-term interest rates, which is a major risk reduction factor for a REIT with a high D/E ratio.

Liquidity and Solvency

You're looking at One Liberty Properties, Inc. (OLP) to understand if they have the short-term cash to manage their operations and acquisitions. The direct takeaway is that their liquidity position is solid, driven by their asset-light REIT model and a substantial credit facility, not a massive working capital surplus. Their recent financial activity shows a healthy cash-generating core business funding aggressive portfolio expansion.

Current and Quick Ratios (Liquidity Positions)

For a real estate investment trust (REIT), liquidity metrics like the Current Ratio and Quick Ratio can look different than for a manufacturing company. A REIT's core assets are long-term properties, not inventory or accounts receivable. Still, you want to see a buffer. As of the most recent quarter in 2025, One Liberty Properties' Current Ratio stood at a strong 1.79, and the Quick Ratio was 1.19. Here's the quick math: a Current Ratio of 1.79 means OLP has $1.79 in current assets for every dollar of current liabilities. This is defintely a comfortable position, especially for a REIT, where anything consistently above 1.0 is generally viewed as safe.

Analysis of Working Capital Trends

The positive working capital-implied by the ratios being over 1.0-is a good trend, but the real story is their available liquidity. As of October 31, 2025, One Liberty Properties reported a total available liquidity of approximately $109.4 million. This pool of funds is the true measure of their short-term financial flexibility, which includes both cash on hand and access to credit. What this estimate hides is the strategic use of that capital: they are actively recycling capital from non-core asset sales into higher-growth industrial properties. This is a deliberate, strategic use of working capital, not just a passive cash hoard.

• Total available liquidity: $109.4 million.
• Cash and equivalents (Oct 2025): $9.4 million.
• Available credit facility: $100 million.

Cash Flow Statements Overview

The cash flow statement for the trailing twelve months (TTM) ending in the third quarter of 2025 paints a picture of a company in a significant growth phase. Their core operations are generating substantial cash, but they are immediately deploying it into new assets. This is the hallmark of a growth-focused REIT. You can see a deeper dive into their shareholder base here: Exploring One Liberty Properties, Inc. (OLP) Investor Profile: Who's Buying and Why?

Potential Liquidity Concerns or Strengths

The primary strength is the stability of their Operating Cash Flow at $44.67 million (TTM), which comfortably covers their dividend and operational needs. The biggest near-term risk isn't a liquidity crisis, but rather the execution risk associated with their aggressive investing cash outflow of -$45.85 million. They are funding a strategic pivot toward industrial assets, with approximately 80% of their Annual Base Rent (ABR) now coming from this sector. The liquidity strength lies in the available $100 million on their credit facility, which provides a ready bridge for acquisitions and unexpected capital needs. The company is managing leverage within a steady financing framework, but the interest rate environment still demands caution on new debt.

Next step: Portfolio Manager: Model the impact of a 100-basis-point interest rate increase on the debt service coverage ratio based on the current 2025 debt levels by the end of the week.

Valuation Analysis

You're looking at One Liberty Properties, Inc. (OLP) because of that hefty yield, but let's cut through the noise and see if the valuation actually holds up. The short answer is that One Liberty Properties appears fully valued to slightly overvalued based on traditional metrics, especially when you factor in the operational risk implied by its dividend coverage.

Here's the quick math on the most recent fiscal year data. As of November 2025, the trailing Price-to-Earnings (P/E) ratio is around 13.40, which is not excessively high for a Real Estate Investment Trust (REIT), but it's defintely not a deep value signal either. More telling is the Enterprise Value-to-EBITDA (EV/EBITDA) multiple, which sits at about 15.93. That's a bit stretched, suggesting the market is pricing in a strong assumption about future cash flow growth that the current earnings don't fully support.

• P/E Ratio (Trailing): 13.40
• P/B Ratio (Current): 1.41
• EV/EBITDA Ratio (Current): 15.93

Stock Performance and Volatility

The stock has had a rough 12 months, which is a key part of this valuation story. The price has fallen by over 28.05% in the last 52 weeks. Honestly, that's a significant drawdown.

The volatility is clear when you look at the 52-week range: the stock traded as high as $30.45 and as low as $19.62. The recent closing price near the low end of that range, at about $20.42 as of November 17, 2025, tells you investor sentiment is bearish right now. This is a stock that has been selling off, and that downward momentum signals caution, not a clear-cut buying opportunity.

The Dividend Reality Check

The main draw for many is the dividend, but you need to look past the headline yield. One Liberty Properties pays an annualized dividend of $1.80 per share, which translates to a high current dividend yield of approximately 8.87%. That's attractive, but the sustainability is the issue.

The trailing dividend payout ratio is a high 139.53% of earnings. Here's the problem: when a company pays out nearly 140 cents for every dollar it earns, that dividend is not covered by net income. It's an unsustainable ratio, even for a REIT, which typically relies on Funds From Operations (FFO) or Adjusted FFO (AFFO) for coverage. While next year's estimated payout ratio drops to a slightly better, but still high, 105.26%, the current numbers suggest a real risk of a dividend cut if earnings don't improve quickly. You need to understand the underlying business strategy, especially their shift toward industrial properties. You can read more about their strategic direction here: Mission Statement, Vision, & Core Values of One Liberty Properties, Inc. (OLP).

Analyst Consensus and Near-Term Action

The professional analyst community is cautious. The consensus rating on One Liberty Properties is a Sell, though one recent analyst reiterated a Hold rating. The average 12-month price target is around $24.00. This target implies an upside from the current price, but the 'Sell' rating is the dominant signal, suggesting analysts see the risk of capital loss or a dividend cut outweighing the potential for a small price recovery.

If you own the stock, the high payout ratio is your immediate concern. If you're considering an entry, wait for a clearer signal that the industrial property transition is improving cash flow coverage. Finance: Model a scenario where the dividend is cut by 20% and assess the stock price impact by end of Q1 2026.

Risk Factors

You're looking at One Liberty Properties, Inc. (OLP) because of its industrial focus and steady dividends, but you need to see the cracks in the foundation, not just the facade. The direct takeaway is that while the strategic shift to industrial properties is a strong long-term move, the near-term financial risk from a very tight dividend coverage ratio is the biggest operational concern right now.

The company is a net lease real estate investment trust (REIT) focused on industrial and retail properties, and its financial health in the 2025 fiscal year shows a clear tension between strategic growth and financial strain. We need to focus on the operational, financial, and external risks highlighted in the most recent Q3 2025 reports.

Operational and Financial Tightropes

The most immediate and critical internal risk is the dividend payout ratio. For Q3 2025, the company's dividend cost was about $9.74 million per quarter. When you compare that to the Adjusted Funds From Operations (AFFO) of $10.07 million for the same period, you get a very risky AFFO payout ratio of approximately 96.7%. That's a razor-thin margin, up from around 90% in recent years, which means any small dip in cash flow puts the dividend at risk. Honestly, that's too close for comfort for a reliable income play.

Here's the quick math on the Q3 2025 operational snapshot:

Also, while the occupancy rate is a solid 98.2%, the company has faced specific tenant issues, such as those at The Vue property in Beachwood, Ohio, which can affect cash flow if not resolved quickly. Plus, the overall cash position fell significantly compared to the end of 2024, making the dividend safety uncertain if the AFFO drops even a bit more. Exploring One Liberty Properties, Inc. (OLP) Investor Profile: Who's Buying and Why?

External Headwinds and Strategic Execution

The biggest external risk is the macroeconomic climate, specifically the lingering impact of higher interest rates. Weakness in the market combined with rising interest rates is what pushed that payout ratio up in the first place. Near-term risks from delayed rate cuts persist, meaning the cost of capital for new acquisitions or refinancing could remain high, pressuring returns.

The company's primary mitigation strategy is its aggressive portfolio transformation, which is defintely the right long-term move. They are shifting away from retail to industrial properties, which now account for about 80% of their Annual Base Rent (ABR). They completed or agreed to about $189 million in industrial acquisitions in 2025, partially funded by asset recycling-selling non-core assets with gains. This is smart, but it introduces execution risk. What this estimate hides is the potential for delays in closing acquisitions or dispositions, which can disrupt the projected cash flow and debt structure.

• Manage debt: Vast majority of fixed-rate debt is due after 2030.
• Secure new capital: Recently obtained a $14 million mortgage at a 5.77% interest rate due in 2030 for a new property.
• High insider ownership: Provides a strong alignment of interests with shareholders.

You need to monitor the AFFO payout ratio and the execution of the $189 million acquisition pipeline closely. Finance: Track the quarterly AFFO against the dividend payment for the next two quarters to confirm coverage stabilizes above 100%.

Growth Opportunities

You're looking for a clear path forward for One Liberty Properties, Inc. (OLP) beyond the current quarter, and the answer is simple: the company is executing a decisive, multi-year pivot to industrial real estate. This strategic shift is the single biggest driver of future growth, aiming to stabilize cash flow and capitalize on the strong logistics market.

The near-term growth story isn't about product innovation; it's about disciplined capital allocation (asset recycling) and strategic acquisitions. OLP has been aggressive in 2025, with approximately $189 million in acquisitions completed or planned for the year, all focused on industrial properties. To fund this, they've been selling off non-core retail and other assets, like the three retail properties sold in Q2 2025 for a $6.5 million gain. That's smart portfolio management.

Here's the quick math on the portfolio transformation:

• Industrial properties now generate approximately 80% of the company's Annual Base Rent (ABR) as of the end of Q3 2025.
• The Q1 2025 acquisition of four industrial properties for $88.3 million alone is expected to add about $1.6 million in quarterly rental income.
• The portfolio maintains a high occupancy rate of approximately 98.8% as of Q2 2025, which provides a strong, predictable base for rental income.

The strategic focus is defintely on industrial properties. You can read more about the financial implications of this shift in the full analysis: Breaking Down One Liberty Properties, Inc. (OLP) Financial Health: Key Insights for Investors.

Revenue and Earnings Projections for 2025

When we look at the numbers, the growth is modest but stable, which is what you want from a net lease real estate investment trust (REIT). The company's total revenue for the nine months ended September 30, 2025, was already $72.42 million. Analysts project annual revenue to grow at around 3.2% per year going forward, which is a realistic expectation given the current economic climate.

For a REIT, Adjusted Funds from Operations (AFFO) is the key metric. The full-year 2025 AFFO is estimated by some analysts to reach approximately $42.2 million, based on annualizing the strong first-half results. This is supported by the actual quarterly figures:

What this estimate hides is the potential drag from higher interest rates on new debt, even though rental income is up. Q2 2025 rental income grew 12.3% year-over-year to $24.5 million, but higher interest expenses do eat into the bottom line.

Competitive Edge and Risk Mitigation

One Liberty Properties has a few structural advantages that position it well for this growth phase. First, its smaller size compared to giants like Realty Income gives it greater agility in sourcing smaller, potentially higher-yield industrial deals that the big players overlook. Second, the company's debt structure is a significant buffer against market volatility: approximately 98.9% of its debt is fixed-rate, with a weighted average interest rate of 4.78%, and most maturities are after 2030. This insulates cash flow from the current uncertain interest rate environment.

Plus, high insider ownership-over 25% of OLP is owned by insiders as of Q3 2025-means management's interests are strongly aligned with yours, the shareholder. They are incentivized to make this industrial pivot work for long-term value creation. The next key action is for Finance to track the quarterly AFFO against the $42.2 million projection to ensure the acquisitions are truly accretive.