Benzinga | Jun 21, 2021 07:36AM EDT

One Liberty Properties Sells Retail Property for $40.5M

One Liberty Properties, Inc. (NYSE:OLP), an owner and manager of a primarily industrial portfolio along with other net leased assets that are geographically diversified, today announced that it closed on a $40.5 million sale of a 47,200 square foot building and the related parking lot located in West Hartford, Connecticut and leased to Whole Foods. The proceeds were used to repay a $15.4 million mortgage on the property, pay off the $17.9 million outstanding balance on the Company's credit facility and pay transaction related costs. The remaining proceeds of approximately $5.4 million will be used for general corporate and working capital purposes.

Patrick J. Callan, Jr., President and Chief Executive Officer of One Liberty, commented, "As we continue to transform our portfolio to industrial focused properties in well-located markets, this sale again demonstrates our ability to create meaningful value over time. Similar to the sale of other non-core assets that we believe reached maximum value, this transaction allows us to reduce our leverage and increase our financial capacity to fund future growth."

The Company anticipates that for the quarter ending June 30, 2021, it will recognize an approximate net gain of $21.5 million from this sale, before giving effect to a $796,000 mortgage swap termination fee. During the three months ended March 31, 2021, the Company recognized $440,000 of rental income and incurred $132,000 of mortgage interest expense and $80,000 of depreciation and amortization expense at this property.

The Company and Havertys (NYSE:HVT), entered into new leases which extended the lease term on ten of the eleven properties that had been scheduled to expire in August 2022, although one of these leases provides that it can be terminated by either party prior to the stated termination date. Generally, the lease extensions run for four to nine years from the August 2022 expiration date. The Company also agreed to invest up to $3.0 million for tenant improvements. After giving effect to the lease extensions and assuming the lease subject to the mutual termination right is not terminated, rental income from this tenant is anticipated to be approximately $4.8 million, $4.5 million and $4.0 million in 2021, 2022 and 2023, respectively.