Executive Summary

Q2 2025 delivered solid operational momentum: rental income rose 12.3% year over year to $24.5 million, driven by acquisitions/dispositions and same-store improvements; FFO/share increased 4.7% to $0.45, and AFFO/share rose 2.1% to $0.49 .
Results vs estimates: GAAP EPS materially beat ($0.39 vs $0.14 consensus*) on asset sale gains; revenue modestly missed ($24.545m vs $24.999m consensus*); FFO/share was slightly below ($0.45 vs $0.46 consensus*) .
Portfolio transformation advanced: entered agreement to acquire a 210,600 sq ft industrial asset for $24.0m (expected annual base rent ~$1.5m, 3.5% escalators) and completed sales of three retail assets for a $6.5m gain .
Balance sheet and liquidity: quarter-end cash $19.0m; total debt $455.0m; available liquidity ~$115.5m (Aug 1) including $100m on the revolver—positioned to fund accretive growth .

What Went Well and What Went Wrong

What Went Well

Industrial pivot is paying off: “transformation of our portfolio to primarily industrial properties contributed positively to our results,” with additional industrial acquisition contracted and three non-industrial assets sold, enhancing cash flow stability .
FFO/AFFO growth: FFO increased to $9.7m ($0.45/share), AFFO to $10.6m ($0.49/share), supported by higher rental income despite rising interest and real estate expenses .
Asset recycling created value: $6.5m gain on sales in Q2 and announced additional Q3 gains ($2.9m Lakewood land; $2.5m Eugene retail), reinforcing capital recycling discipline .

What Went Wrong

Interest expense pressure: net expenses rose to $5.9m from $4.7m YoY primarily due to higher interest expense and larger average debt balances; Q2 interest expense was $5.847m .
GAAP EPS down YoY: diluted EPS declined to $0.39 vs $0.45 in Q2 2024 despite gains on sales, reflecting higher interest and operating costs and share count dilution .
RE expenses and D&A rose: total operating expenses increased to $15.7m vs $14.9m YoY, driven by real estate expenses rebilled to tenants and higher depreciation/amortization from recent acquisitions .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Rental income, net ($USD Thousands)	21,800	24,170	24,479
Lease termination fees ($USD Thousands)	—	—	66
Total revenues ($USD Thousands)	21,800	24,170	24,545
Operating income ($USD Thousands)	14,398	9,621	15,353
Net income attributable to OLP ($USD Thousands)	9,553	4,155	8,431
Diluted EPS ($USD)	0.45	0.18	0.39
Funds from operations (FFO) ($USD Thousands)	9,246	9,573	9,695
FFO per share - diluted ($USD)	0.43	0.44	0.45
Adjusted FFO (AFFO) ($USD Thousands)	10,229	10,510	10,621
AFFO per share - diluted ($USD)	0.48	0.48	0.49

Q2 2025 vs Consensus

Metric	Q2 2025 Consensus*	Q2 2025 Actual
Revenue ($USD)	24,999,000*	24,545,000
GAAP EPS ($USD)	0.14*	0.39
FFO / Share (REIT) ($USD)	0.46*	0.45

KPIs and Balance Sheet

Metric	Q4 2024	Q1 2025	Q2 2025
Cash & cash equivalents ($USD Thousands)	42,315	8,162	19,043
Total assets ($USD Thousands)	766,954	811,688	795,585
Total liabilities ($USD Thousands)	458,379	507,356	491,821
Total stockholders’ equity ($USD Thousands)	307,425	303,231	303,388
Mortgages payable, net ($USD Thousands)	420,555	465,971	448,254
Line of credit ($USD Thousands)	—	5,000	6,800

Notes:

Available liquidity was ~$115.5m at Aug 1, 2025 (cash $15.5m including required deposit; $100m available on revolver) .
Q2 gains on sale of real estate totaled $6.531m .
Weighted average diluted shares: 20,683 (Q2 2024), 20,951 (Q1 2025), 20,967 (Q2 2025) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Dividend per share ($USD)	Q3 2025 (payable Jul 9, 2025)	$0.45 (declared Mar 5, 2025; payable Apr 4, 2025)	$0.45 (declared Jun 5, 2025; payable Jul 9, 2025)	Maintained
Blythewood, SC industrial acquisition	Expected close by end of Q3 2025	N/A	Annual base rent approx $1.5m; 3.5% annual increases; ~$14.0m new mortgage at 5.77% IO, maturing 2030	New
Anticipated gains on asset sales	Q3 2025	N/A	Lakewood, CO land sale gain ~$2.9m (before minority share); Eugene, OR retail sale gain ~$2.5m	New

Management did not provide formal revenue, FFO, AFFO, margin, OpEx, OI&E or tax-rate guidance in Q2 materials .

Earnings Call Themes & Trends

Note: No Q2 2025 earnings call transcript was available in the document set; themes below reflect press releases.

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
Industrial portfolio transformation	Added $133m industrial assets since start of 2024; >75% of base rent industrial by early 2025	Contracted $24.0m industrial purchase; sold three retail assets; management highlighted positive contribution from industrial focus	Accelerating shift to pure-play industrial
Interest expense/macro	Q4 interest expense $5.064m; Q1 interest expense $5.432m with net other expenses $5.5m amid higher rates	Q2 interest expense $5.847m; net expenses $5.9m, driven by higher average debt and rates	Rising interest expense headwind
Asset recycling/gains	Q4 gain-on-sale $6.660m across two properties	Q2 gain-on-sale $6.531m; additional gains expected in Q3 (Lakewood, Eugene)	Continued capital recycling
Same-store performance	Noted contributions from same-store in Q4 (revenue mix shift)	Same-store rental income increase from reimbursements, lease amendments/extensions and new lease activity	Improving same-store rent drivers
Dividend policy	Declared 129th consecutive quarterly dividend ($0.45)	130th consecutive dividend maintained at $0.45	Stable shareholder returns
Liquidity	Available liquidity ~$110.1m at Feb 28, 2025	Available liquidity ~$115.5m at Aug 1, 2025	Liquidity strengthened

Management Commentary

“We are pleased that the transformation of our portfolio to primarily industrial properties contributed positively to our results this quarter.” — Patrick J. Callan, Jr., President & CEO .
“Our portfolio continues to demonstrate strong cash flow stability, as we remain focused on uncovering additional opportunities to grow in an accretive manner and unlock additional value for stockholders.” .

Q&A Highlights

No Q2 2025 earnings call transcript was available in the document set; therefore Q&A themes and specific analyst interactions could not be assessed.

Estimates Context

GAAP EPS: Strong beat driven by gains on asset sales ($0.39 actual vs $0.14 consensus*)—non-operational gains amplified GAAP EPS; expect models to incorporate realized gains trajectory and asset recycling cadence .
Revenue: Slight miss ($24.545m actual vs $24.999m consensus*) despite 12.3% YoY rental income growth; interest and expense dynamics offset headline growth in operating leverage .
FFO/share: Slight miss ($0.45 actual vs $0.46 consensus*), with higher interest expense and real estate expenses partially offsetting rental income strength .

Values retrieved from S&P Global.*

Key Takeaways for Investors

Industrial mix and same-store drivers underpin cash flow stability; continued acquisitions and dispositions should sustain rental income trajectory even amid rate headwinds .
Expect near-term estimate adjustments: GAAP EPS likely revised higher on realized gains; FFO/share tweaks modestly lower given persistent interest expense .
Liquidity and revolver capacity (~$115.5m) provide dry powder for accretive industrial acquisitions, supporting AFFO growth potential through 2H25 .
Watch rate path and debt structure: elevated interest expense remains the primary pressure point; new debt for acquisitions (e.g., 5.77% IO) should be monitored for coverage metrics .
Dividend stability continues (130th consecutive quarterly dividend at $0.45), reinforcing shareholder return profile during the portfolio transition .
Asset recycling remains a catalyst: expected Q3 gains (Lakewood, Eugene) could drive non-GAAP beats and GAAP volatility—focus on underlying FFO/AFFO to gauge core run-rate .
Trendline: FFO/AFFO growth with incremental operating scale from industrial assets; near-term narrative likely driven by execution on acquisitions and balance sheet optimization .

ONE LIBERTY PROPERTIES INC (OLP)·Q2 2025 Earnings Summary