AS
FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION ON APRIL 6,
2009
REGISTRATION
NO. 333-158215
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
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FORM S-3/A
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AMENDMENT
No. 1 TO
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
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ONE LIBERTY
PROPERTIES,
INC.
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(Exact name of
registrant as specified in its charter)
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MARYLAND
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13-3147497
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(State
or other jurisdiction of
incorporation
or organization)
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(I.R.S.
Employer
Identification
No.)
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60
Cutter Mill Road
Great
Neck, New York 11021
(516)
466-3100
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(Address,
including zip code, and telephone number, including
area
code, of
registrant’s principal executive offices)
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Mark
H. Lundy, Esq.
Vice
President and Secretary
One
Liberty Properties, Inc.
60
Cutter Mill Road
Great
Neck, New York 11021
(516)
466-3100
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(Name,
address, including zip code, and telephone
number,
including area code, of agent for service)
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Copy
to:
Jeffrey
A. Baumel, Esq.
Sonnenschein
Nath & Rosenthal LLP
101
JFK Parkway
Short
Hills, New Jersey 07078
(973)
912-7189
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Approximate
date of commencement of proposed sale to the public:
From time
to time after the effective date of this Registration Statement.
If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following
box. o
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. x
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
If this
Form is a registration statement pursuant to General Instruction I.D. or a post
effective amendment thereto that shall become effective upon the filing with the
Commissions pursuant to Rule 462(e) under the Securities Act check the following
box. o
If this
Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. o
Indicate
by check mark whether registrant is large accelerated, an accelerated filer, a
non-accelerated filer, or a smaller reporting company under Rule 12b-2 of the
Exchange Act. Check one:
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Large Accelerated
filer o |
Accelerated
Filer x |
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Non-Accelerated
filer o |
Smaller reporting
Company o |
CALCULATION
OF REGISTRATION FEE
Title
of each class of securities
to
be registered
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Amount
to be Registered
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Proposed
maximum aggregate offering price per unit
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Proposed
maximum aggregate offering price (1)
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Amount
of registration fee (3)
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Common
Stock, par value $1.00 per share
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(1)
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(2)
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$50,000,000
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$2,790
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(1)
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There
are being registered under this registration statement such indeterminate
number of shares of common stock of the registrant as shall have an
aggregate offering price not to exceed
$50,000,000.
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(2)
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The
proposed maximum initial offering price per unit will be determined, from
time to time, by the
registrant.
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(3)
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Estimated
solely for purposes of calculating the registration fee pursuant to
Rule 457(o) under the Securities
Act.
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The registrant hereby amends
this registration statement on such date or dates as may be necessary to
delay its effective date until the registrant shall file a further
amendment which specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of the
Securities Act or until the registration statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may
determine.
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The
information in this prospectus is not complete and may be changed. We may not
sell these securities until the Securities and Exchange Commission declares
our registration statement effective. This prospectus is
not an offer to sell these securities and is not soliciting an offer to buy
these securities in any state where the offer or sale is not
permitted.
PROSPECTUS
ONE
LIBERTY PROPERTIES, INC.
Common
Stock
$50,000,000
We may sell, from time to time,
shares of our common stock, par value $1.00 per share, in one or more offerings
up to a total dollar amount of $50,000,000.
Our common stock is listed for trading
on the New York Stock Exchange under the trading symbol “OLP.”
We will
offer our securities in amounts, at prices and on the terms to be determined at
the time we offer the securities. We will provide specific terms of
these securities in prospectus supplements to this prospectus. We are
organized and conduct our operations so as to qualify as a real estate
investment trust, or REIT, for federal income tax purposes. The
specific terms of the securities may include limitations on actual, beneficial
or constructive ownership and restrictions on the transfer of the securities
that may be appropriate to preserve our status as a REIT.
The securities may be offered on a
delayed or continuous basis directly by us, through agents, underwriters or
dealers as designated from time to time, through a combination of these methods
or through any other method provided in the applicable prospectus
supplement. If any underwriters are involved in the sale of the
securities, the names of such underwriters and any applicable commissions or
discounts will be set forth in a prospectus supplement. For
additional information on the methods of sale of the securities, you should
refer to the section entitled “Plan of Distribution” in this
prospectus. You should read this prospectus and the applicable
prospectus supplement carefully before you invest.
Investing in our securities involves
risks. Before buying our securities, you should refer to the risk
factors included in our periodic reports, in prospectus supplements relating to
specific offerings and in other information that we file with the Securities and
Exchange Commission. See “Risk Factors” on page 5.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of
these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date
of this prospectus is ________________, 2009
TABLE
OF CONTENTS
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This
prospectus is part of a registration statement that we filed with the United
States Securities and Exchange Commission (the “SEC”), utilizing a “shelf”
registration process, which allows us to sell common stock from time to time in
one or more offerings up to an aggregate public offering price of
$50,000,000.
This
prospectus only provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a supplement to
this prospectus that will contain specific information about the terms of the
securities offered, including the amount, the price and the terms determined at
the time of the offering. The prospectus supplement may also add to,
update or change information contained in this prospectus. Before
purchasing any securities, you should carefully read both this prospectus and
any supplement, together with additional information described under the heading
“Where You Can Find More Information.”
You
should rely only on the information contained or incorporated by reference in
this prospectus and any prospectus supplement or amendment. We have
not authorized any other person to provide you information different from that
contained in this prospectus or incorporated by reference in this prospectus or
any prospectus supplement or amendment. You should assume that the
information appearing in this prospectus or any applicable prospectus supplement
or the documents incorporated by reference herein or therein is accurate only as
of the date on the cover page. Our business, financial condition,
results of operations and prospects may have changed since that
date.
In this
prospectus, references to “OLP”, “Company,” “we,” “us,” “our,” and “registrant”
refer to One Liberty Properties, Inc. and all our subsidiaries. The
phrase “this prospectus” refers to this prospectus and the applicable prospectus
supplement, unless the context otherwise requires. References to
“securities” refer to the common stock offered by this prospectus, unless we
specify or the context indicates or requires otherwise.
We file
annual, quarterly and special reports, proxy statements and other information
with the SEC. Our electronic filings with the SEC are available to
the public on the Internet at the SEC’s web site at http://www.sec.gov. You
may also read and copy any document we file with the SEC at the SEC’s Public
Reference Room located at 100 F Street, N.E., Washington,
DC 20549. Please call the SEC at 800-SEC-0330 for more
information about their public reference room and their copy
charges.
The SEC
allows us to “incorporate by reference” the information we file with the SEC,
which means that we can disclose information to you by referring you to those
documents. Any information that we refer to in this manner is
considered part of this prospectus. Any information that we file with
the SEC after the date of this prospectus will automatically update and
supersede the information contained in this prospectus.
We are
incorporating by reference the following documents that we have previously filed
with the SEC (Commission File No. 001-09279), except for any document or portion
thereof “furnished” to the SEC:
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Our
Annual Report on Form 10-K for the year ended December 31, 2008, filed on
March 13, 2009, and Amendment No. 1 to the Form 10-K filed on March 31,
2009;
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Our
Current Report on Form 8-K, filed on March 16,
2009;
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The
description of our shares contained in our Registration Statement on Form
8-A, filed on January 5, 2004, pursuant to Section 12(g) of the Exchange
Act, as amended, and the description set forth in the final prospectus
supplement filed pursuant to Rule 424(b)(2) on October 28, 2003, which is
incorporated therein by reference, including any amendment or
report filed for the purpose of updating such
description.
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All
documents and reports filed by us with the SEC (other than Current Reports on
Form 8-K furnished pursuant to Item 2.02 or Item 7.01 of Form 8-K, unless
otherwise indicated therein) pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after the
date of this prospectus and prior to the termination of this offering shall be
deemed incorporated by reference in this prospectus and shall be deemed to be a
part of this prospectus from the date of filing of such documents and
reports. Any statement in a document incorporated or deemed to be
incorporated by reference in this prospectus shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement in
this prospectus or in any subsequently filed document or report incorporated or
deemed to be incorporated by reference in this prospectus modifies or supersedes
such statement. Any such statement so modified or superseded shall
only be deemed to constitute a part of this prospectus as it is so modified or
superseded.
We will
provide without charge to each person, including any beneficial owner, to whom
this prospectus is delivered, upon written or oral request of such person, a
copy of any or all of the documents incorporated by reference in this prospectus
other than exhibits, unless such exhibits specifically are incorporated by
reference into such documents or this prospectus.
Requests
for such documents should be addressed in writing or by telephone to: Mark H.
Lundy, Secretary, One Liberty Properties, Inc., 60 Cutter Mill Road, Great
Neck, N.Y. 11021 or 516-466-3100.
We are a
self-administered and self-managed real estate investment trust, also known as a
REIT. We were incorporated under the laws of the State of Maryland on
December 20, 1982. We acquire, own and manage a geographically
diversified portfolio of retail (including furniture and office supply stores),
industrial, office, flex, health and fitness and other properties, a substantial
portion of which are under long-term leases. Substantially all of our leases are
“net leases,” under which the tenant is typically responsible for real estate
taxes, insurance and ordinary maintenance and repairs. As of December
31, 2008, we owned 79 properties, three of which are vacant, and one of which is
a 50% tenancy in common interest, and participated in five joint ventures that
own five properties, one of which is vacant. Our properties and the
properties owned by our joint ventures are located in 29 states and have an
aggregate of approximately 6.1 million square feet of space (including
approximately 106,000 square feet of space at the property in which we own a
tenancy in common interest and approximately 1.5 million square feet of space at
properties owned by the joint ventures in which we participate).
As a
result of a severe national economic recession during 2008, which is continuing
into 2009, consumer confidence and retail spending have declined and may
continue to decline. Approximately 55% of the rental income that is
payable to us in 2009 under leases existing at December 31, 2008, including
rental income payable on our tenancy in common interest and excluding any rental
income from five properties formerly leased by Circuit City Stores, Inc.
(hereinafter “2009 contractual rental income”) will be derived from rent paid by
retail tenants. If the financial problems of our retail tenants
continue or deteriorate further, our revenues could decline significantly and
our real estate expenses could increase. During the fourth quarter of
2008, we recorded an impairment charge of $5.2 million relating to three
properties that were leased to Circuit City Stores, Inc. (hereinafter “Circuit
City”). Circuit City filed for protection under Federal bankruptcy
laws in November 2008 and has rejected all of its leases on our
properties. To the extent that our other retail tenants are adversely
affected by the recession and reduced consumer spending, our portfolio may be
further adversely effected.
Our 2009
contractual rental income will be approximately $42 million. In 2009,
we expect that our share of the rental income payable to our five joint ventures
which own properties will be approximately $1.4 million. On December
31, 2008, the occupancy rate of properties owned by us was 97.5% based on square
footage (including the property in which we own a tenancy in common interest and
the properties formerly leased to Circuit City) and the occupancy rate of
properties owned by our joint ventures was 99.5% based on square
footage. The weighted average remaining term of the leases in our
portfolio, including our tenancy in common interest (excluding the properties
formerly leased to Circuit City), is 9.4 years and 10.7 years for the leases at
properties owned by our joint ventures.
The
address and phone number of our principal executive office is 60 Cutter Mill
Road, Great Neck, N.Y. 11021 and 516-466-3100.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and other documents we file with the SEC contain forward-looking
statements that are based on current expectations, estimates, forecasts and
projections about us, our future performance, the industries in which we
operate, our beliefs and our management’s assumptions. In addition,
other written or oral statements that constitute forward-looking statements may
be made by or on behalf of us. Words such as “expects,”
“anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,”
“seeks,” “estimates,” variations of such words and similar expressions are
intended to identify such forward-looking statements. These
statements are not guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to
predict. Therefore, actual outcomes and results may differ materially
from what is expressed or forecasted in such forward-looking
statements. Except as required under the federal securities laws and
the rules and regulations of the SEC, we do not have any intention or obligation
to update publicly any forward-looking statements after the distribution of this
prospectus, whether as a result of new information, future events, changes in
assumptions, or otherwise.
Before
you invest in any of our securities, in addition to the other information in
this prospectus and the applicable prospectus supplement, you should carefully
consider the risk factors under the heading “Risk Factors” contained in Part I,
Item 1A in our most recent Annual Report on Form 10-K and any risk factors
disclosed under the heading “Risk Factors” in Part II, Item 1A in any Quarterly
Report on Form 10-Q that we file after our most recent Annual Report on Form
10-K, which are incorporated by reference into this prospectus and the
applicable prospectus supplement, as the same may be updated from time to time
by our future filings under the Exchange Act.
The risks
and uncertainties we describe are not the only ones facing our Company.
Additional risks and uncertainties not presently known to us or that we
currently deem immaterial may also impair our business or operations. Any
adverse effect on our business, financial condition or operating results could
result in a decline in the value of the securities and the loss of all or part
of your investment.
USE
OF PROCEEDS
Unless
otherwise indicated in the applicable prospectus supplement, we anticipate that
the net proceeds from the sale of the securities that we may offer under this
prospectus will be used for general corporate purposes. General
corporate purposes may include repayment of debt, capital expenditures and any
other purposes that we may specify in the applicable prospectus
supplement. In addition, we may use all or a portion of any net
proceeds to acquire real property as part of our regular business. If
a material part of the net proceeds is used to repay indebtedness, we will set
forth the interest rate and maturity of such indebtedness in a prospectus
supplement, as required.
We will
have significant discretion in the use of any net proceeds. Investors
will be relying on the judgment of our management regarding the application of
the proceeds from any sale of the securities. We may invest the net
proceeds temporarily until we use them for their stated purpose.
DESCRIPTION
OF SECURITIES
The
following paragraphs constitute a summary as of the date of this prospectus and
do not purport to be a complete description of our securities. The
following paragraphs are qualified in their entirety by our Articles of
Incorporation, as amended and restated, our Bylaws, as amended, and Maryland
law. For a complete description of our securities, we refer you to
our Articles of Incorporation, as amended and restated, and our Bylaws, as
amended, each of which is incorporated by reference in this prospectus and any
accompanying prospectus supplement.
General
Our
Articles of Incorporation, as amended and restated, which we refer to herein as
our “charter”, provides that we may issue up to 37,500,000 shares of capital
stock, consisting of 25,000,000 shares of common stock, par value $1.00 per
share, and 12,500,000 shares of preferred stock, par value $1.00 per
share. As of March 31, 2009, 10,175,345 shares of common stock
(including 213,625 shares awarded under restricted stock grants subject to
vesting conditions) and no shares of preferred stock were
outstanding.
Common
Stock
Subject
to the preferential rights of any other shares or series of capital stock,
holders of shares of our common stock are entitled to receive distributions on
such shares if, as and when authorized and declared by our board of directors
out of assets legally available and to share ratably in our assets legally
available for distribution to our stockholders in the event of our liquidation,
dissolution or winding-up after payment of, or adequate provision for, all known
debts and liabilities.
Each
outstanding share of our common stock entitles the holder to one vote on all
matters submitted to a vote of stockholders, including the election of
directors. There is no cumulative voting in the election of
directors, which means that the holders of a majority of the outstanding shares
of our common stock, voting as one class, can elect all of the directors then
standing for election and the holders of the remaining shares of our common
stock will not be able to elect any directors. Holders of shares of
common stock have no preference, conversion, sinking fund, redemption, exchange
or preemptive rights to subscribe for any of our securities.
Our board
of directors is authorized by our charter to take such action, in addition to
the other provisions contained in the charter, as it deems necessary or
advisable, to protect the Company and the interests of shareholders by
preserving our status as a REIT. The charter authorizes our board of
directors to refuse or prevent a transfer of shares of our common stock to any
person whose acquisition of such shares would, in the opinion of our board of
directors, result in our disqualification as a REIT. In addition, any
transfer of our common stock that, if effective, results in a shareholder owning
shares in excess of the ownership limit set forth in our charter, or in our
shares of common stock being owned by less than 100 persons or results in the
Company being “closely held” shall be void from the date of the
transfer.
Pursuant
to the Maryland General Corporation Law (the “MGCL”), a corporation generally
cannot (except under and in compliance with specifically enumerated provisions
of the MGCL) dissolve, amend its charter, merge, sell all or substantially all
of its assets, engage in a share exchange or engage in similar transactions
outside the ordinary course of business unless approved by the affirmative vote
of stockholders holding at least two-thirds of the shares entitled to vote on
the matter, unless a lesser percentage (but not less than a majority of all of
the votes entitled to be cast on the matter) is set forth in the corporation’s
charter. Our charter provides for approval of any such action by a
majority of the votes entitled to be cast in the matter, except that an
amendment to our charter changing the rights, privileges or preferences of any
class or series of outstanding stock must be approved by not less than
two-thirds of the outstanding shares of such class or series of
stock.
Preferred
Stock
Our
charter authorizes us to issue up to 12,500,000 shares of preferred stock, par
value $1.00 per share. As of the date of this prospectus, no
preferred stock is outstanding.
If we
issue preferred stock, the shares we issue will be fully paid and
non-assessable. Prior to the issuance of a new series of preferred
stock, we will file, with the State Department of Assessments and Taxation of
Maryland, Articles of Amendment that will become part of our charter and that
will set forth the terms of the new series including:
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the
title and stated value;
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the
number of shares offered, liquidation preference and offering
price;
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the
dividend rate, if any, and, if applicable, the dividend periods and
payment dates;
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the
date on which dividends, if any, begin to accrue, and, if applicable,
accumulate;
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any
auction and remarketing procedures;
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any
retirement or sinking fund requirement;
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the
terms and conditions of any redemption right;
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the
terms and conditions of any conversion or exchange
right;
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any
listing of the offered shares on any securities
exchange;
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any
voting rights;
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the
relative ranking and preferences of the preferred shares as to dividends,
liquidation, dissolution or winding up;
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any
limitations on issuances of any other series of preferred stock ranking
senior to or on a parity with the series of preferred stock as to
dividends, liquidation, dissolution or winding up;
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any
limitations on direct or beneficial ownership and restrictions on
transfer; and
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any
other specific terms, preferences, rights, limitations or restrictions,
including any restrictions on the repurchases or redemption of shares by
us while there is any arrearage in the payment of applicable dividends or
sinking fund
installments.
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PROVISIONS
OF MARYLAND LAW AND OF OUR CHARTER AND BYLAWS
Restrictions
on Ownership and Transfer
In order
for OLP to qualify as a REIT under the Internal Revenue Code of 1986, as amended
(the “Code”), not more than 50% in value of our outstanding shares may be owned,
directly or indirectly, by five or fewer individuals (defined in the Code to
include certain entities such as qualified pension plans) during the last half
of a taxable year and shares must be beneficially owned by 100 or more persons
during at least 335 days of a taxable year of twelve months (or during a
proportionate part of a shorter taxable year).
Because
our board of directors determined that it is important for us to continue to
qualify as a REIT, our charter was amended in 2005 (after approval by our
shareholders), to restrict, subject to certain exceptions, the number of shares
that a person may own. These provisions are designed to safeguard us
against an inadvertent loss of REIT status.
Pursuant
to our charter, as amended in 2005, (i) any stockholder who beneficially owned a
total amount or value in excess of 9.9% of our stock on June 14, 2005 was
prohibited from beneficially owning in excess of a total amount or value of our
stock that may cause the Company to violate such provisions of the Code relating
to REITs, and (ii) any other person was restricted from beneficially owning a
total amount or value of 9.9% or more of any class or series of common stock and
preferred stock of the Company. Pursuant to the attribution rules
under the Code, Fredric H. Gould, chairman of our board of directors, is our
only stockholder that beneficially owned in excess of 9.9% of our capital stock
on June 14, 2005. Therefore, except as limited by the Code and the
rules and regulations promulgated thereunder, or as our board of directors may
otherwise require, Mr. Gould is the only person permitted to own and acquire
shares of our capital stock, directly or indirectly, in excess of 9.9% of total
amount or value.
The stock
ownership rules under the Code are complex and may cause the outstanding shares
of stock owned by a group of related individuals or entities to be deemed to be
beneficially owned by one individual or entity. Specific attribution
rules apply in determining whether an individual or entity owns any class or
series of common stock or preferred stock of the Company. Under these
rules, any shares owned by a corporation, partnership, estate or trust are
deemed to be owned proportionately by such entities’ stockholders, partners, or
beneficiaries. Furthermore, an individual stockholder is deemed to
own any shares that are owned, directly or indirectly, by that stockholders’
brothers and sisters, spouse, parents or other ancestors, and children or other
descendants. In addition, a stockholder is deemed to own any shares
that he can acquire by exercising options.
As a
result of these attribution rules, even though a stockholder may own less than
9.9% of a class of outstanding shares, that individual or entity may be deemed
to beneficially own 9.9% or more of the class of outstanding stock, which would
subject the individual or entity to the ownership limitations contained in our
charter. The charter provides that any attempt to acquire or transfer
shares of common stock or preferred stock and any resulting transfer thereof
which would result in a stockholder owning an amount that equals or exceeds the
ownership limit without the consent of the board of directors shall be null and
void.
In the
event that the board of directors or its designees determines in good faith that
a prohibited transfer has taken place or is intended, the board or its designee
is authorized to take any action it deems advisable to void or to prevent the
transfer. These actions include, among other things, refusing to give
effect to the transfer on the books of the Company, instituting legal
proceedings to enjoin the transfer, redeeming the shares purported to be
transferred for an amount which may be less than the price the stockholder paid
for such shares, and transferring the shares by operation of law to a charitable
trust. In the event the shares are transferred to a charitable trust,
any dividends on such shares shall inure to such charitable trust and the
trustee of such charitable trust shall be entitled to all voting rights with
respect to such shares.
OLP’s
board of directors may increase or decrease the ownership limits, provided any
decrease may only be made prospectively. Prior to modification of the
ownership limit, OLP’s board may require such opinions of counsel, affidavits,
undertakings or agreements as it may deem necessary or advisable in order to
determine or ensure our status as a REIT.
Neither
the ownership restrictions nor the ownership limit will be removed automatically
even if the REIT provisions of the Code are changed so as no longer to contain
any ownership concentration limitation or if the ownership concentration
limitation is increased. Except as described above, any change in the
ownership restrictions would require an amendment to OLP’s
charter. Amendments to OLP’s charter generally require the
affirmative vote of holders owning not less than a majority of the outstanding
shares entitled to vote thereon. In addition to preserving OLP’s status as a
REIT, the ownership restrictions and the ownership limit may have the effect of
precluding an acquisition of control of OLP without the approval of its board of
directors.
The
ownership limit could have the effect of delaying, deferring or preventing a
transaction or a change in control of OLP that might involve a premium price for
the common shares or otherwise be in the best interest of OLP’s
stockholders.
Classification
of Our Board of Directors, Vacancies and Removal of Directors
Our
charter provides that our board of directors is divided into three
classes. Directors of each class serve for terms of three years each,
with the terms of each class beginning in different years. We
currently have 10 directors. Two of the classes consist of three
directors, and the third class consists of four directors.
At each
annual meeting of our stockholders, successors of the class of directors whose
term expires at that meeting are elected for a three-year term and the directors
in the other two classes continue in office. A classified board may
delay, defer or prevent a change in control or other transaction that might
involve a premium over the then prevailing market price for our common stock or
other attributes that our stockholders may consider desirable. In
addition, a classified board could prevent stockholders who do not agree with
the policies of our board of directors from replacing a majority of the board of
directors for two years, except in the event of removal for cause.
Our
bylaws provide that any vacancy on our board may be filled by action of a
majority of the board. A director elected by the board to fill a
vacancy will hold office until the next annual meeting of stockholders or until
his successor is elected and qualified. Our charter provides that our
stockholders may only remove an incumbent director for cause, at a meeting of
the stockholders duly called and at which a quorum is present, upon an
affirmative vote of the majority of all of the outstanding shares entitled to
vote thereon.
Indemnification
Our
charter and our bylaws obligate us to indemnify our directors and officers to
the maximum extent permitted by Maryland law. The MGCL permits a
corporation to indemnify its present and former directors and officers against
judgments, penalties, fines, settlements and reasonable expenses actually
incurred by them in connection with any proceeding to which they may be a party
by reason of their service in those or other capacities, unless it is
established that (1) the act or omission of the director or officer was material
to the matter giving rise to the proceeding and (a) was committed in bad faith,
or (b) was the result of active and deliberate dishonesty, or (2) the director
or officer actually received an improper personal benefit in money, property or
services, or (3) in the case of any criminal proceeding, the director or officer
had reasonable cause to believe that the act or omission was
unlawful.
Limitation
of Liability
The MGCL
permits the charter of a Maryland corporation to include a provision limiting
the liability of its directors and officers to the corporation and its
stockholders for money damages, except to the extent that (1) it is proved that
the person actually received an improper benefit or profit in money, property or
services, or (2) a judgment or other final adjudication is entered in a
proceeding based on a finding that the person’s action, or failure to act, was
the result of active and deliberate dishonesty and was material to the cause of
action adjudicated in the proceeding. Our charter provides for the
elimination of the liability of our directors and officers to us or our
stockholders for money damages to the maximum extent permitted by Maryland law
from time to time.
Maryland
Business Combination Act
Pursuant
to Article IX of our charter, we have expressly elected not to be subject to, or
governed by, the MGCL’s requirements for “business combinations” between a
Maryland corporation and “interested stockholders”.
Maryland
Control Share Acquisition Act
Maryland
law provides that “control shares” of a Maryland corporation acquired in a
“control share acquisition” have no voting rights except to the extent approved
by a stockholder vote. Two-thirds of the shares eligible to vote
(excluding all interested shares) must vote in favor of granting the “control
shares” voting rights. “Control shares” are voting shares which, if
aggregated with all other shares previously acquired by the acquiring person, or
in respect of which the acquiring person is able to exercise or direct the
exercise of voting power, other than by revocable proxy, would entitle the
acquiring person to exercise voting power of at least 10% of the voting power in
electing directors.
Control
shares do not include shares of stock the acquiring person is entitled to vote
as a result of having previously obtained stockholder approval. A
“control share acquisition” means the acquisition of control shares, subject to
certain exceptions.
If a
person who has made (or proposes to make) a control share acquisition satisfies
certain conditions (including agreeing to pay expenses), that person may compel
our board of directors to call a special meeting of stockholders to be held
within 50 days to consider the voting rights of the shares. If that
person makes no request for a meeting, we have the option to present the
question at any stockholders’ meeting.
If voting
rights are not approved at a meeting of stockholders, we may redeem any or all
of the control shares (except those for which voting rights have previously been
approved) for fair value. We will determine the fair value of the
shares, without regard to voting rights, as of the date of either:
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the
last control share acquisition by the acquiring person;
or
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any
meeting where stockholders considered and did not approve voting rights of
the control shares.
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If voting
rights for control shares are approved at a stockholders’ meeting and the
acquiror becomes entitled to vote a majority of the shares of stock entitled to
vote, all other stockholders may exercise appraisal rights. This
means that you would be able to cause us to redeem your stock for fair
value. Under the MGCL, the fair value may not be less than the
highest price per share paid in the control share
acquisition. Furthermore, certain limitations otherwise applicable to
the exercise of appraisal rights would not apply in the context of a control
share acquisition.
The
control share acquisition statute would not apply to shares acquired in a
merger, consolidation or share exchange if we were a party to the
transaction.
Our
bylaws exempt any acquisition by Gould Investors L.P. of our equity securities
from the provisions of the control share acquisition statute (for more
information regarding Gould Investors L.P., see “Certain Relationship and
Related Transactions”, below). This section of our bylaws may not be
amended or repealed without the written consent of Gould Investors L.P. or
approval of the holders of at least two-thirds of the outstanding shares of our
capital stock.
The control share acquisition statute could have the effect of
discouraging offers to acquire us and of increasing the difficulty of
consummating any such offers, even if our acquisition would be in our
stockholders’ best interests.
Amendment
to Our Charter
Our
charter may be amended by the vote of a majority of the shares entitled to vote,
except that no amendment changing the terms or rights of any class or series of
outstanding stock, by classification, re-classification or otherwise, will be
valid unless such amendment is authorized by not less than two-thirds of the
outstanding voting shares of such class or series of stock.
Amendment
to Our Bylaws
Our board
of directors has the power to alter, modify or repeal any of our bylaws and to
make new bylaws, except that our board may not alter, modify or repeal (1) any
bylaws made by stockholders; (2) Section 11 of Article II of our bylaws
governing the Gould Investors L.P. exemption from the control share acquisition
statute; (3) Section 17 of Article III of our bylaws that governs our investment
policies and restrictions; or (4) Section 18 of Article III of our bylaws that
governs management arrangements.
In
addition, our stockholders have the power to alter, modify or repeal any of our
bylaws and to make new bylaws by majority vote; however at least two-thirds of
the holders of outstanding shares of any preferred stock must vote in favor of
any amendment which changes the rights, privileges or preferences of such
preferred stock, and the vote of at least two-thirds of the holders of our
outstanding shares of capital stock is needed to amend or repeal the Gould
Investors L.P. exemption from the control share acquisition statute, as
discussed above under “Maryland Control Share Acquisition Act”.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors and officers pursuant to the foregoing provisions or
otherwise, we have been advised that, although the validity and scope of the
governing statute has not been tested in court, in the opinion of the SEC, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In addition, state securities laws may limit
indemnification.
FEDERAL
INCOME TAX CONSIDERATIONS
This
section summarizes certain U.S. federal income tax issues that you, as a
prospective investor, may consider relevant. Because this section is a summary,
it does not address all of the tax issues that may be important to you. In
addition, this section does not address the tax issues that may be important to
certain types of prospective investors that are subject to special treatment
under U.S. federal income tax laws, including, without limitation, insurance
companies, tax-exempt organizations (except to the extent discussed in “Taxation
of Tax-Exempt Stockholders,” below), financial institutions or broker-dealers,
and non-U.S. individuals and foreign corporations (except to the extent
discussed in “Taxation of Non-U.S. Stockholders,” below).
The
statements in this section are based on current U.S. federal income tax laws. We
cannot assure you that new laws, interpretations of law, or court decisions, any
of which may have retroactive effect, will not cause one or more statements in
this section to be inaccurate.
We have
not requested and do not intend to request a ruling from the Internal Revenue
Service (“IRS”) as to our current status as a REIT. However, we have
received an opinion from Sonnenschein Nath & Rosenthal LLP (“Sonnenschein”)
stating that we have been organized and have operated in conformity with the
requirements for qualification and taxation as a REIT under the Code for the
taxable year ended December 31, 2008, and that our organization and proposed
method of operation will enable us to continue to meet the requirements for
qualification and taxation as a REIT under the Code. It must be
emphasized that Sonnenschein’s opinion is based on various assumptions and on
our representations concerning our organization and operations, including
representations regarding the nature of our assets and the conduct and method of
operation of our business, and it cannot be relied upon if any of those
assumptions and representations later prove incorrect. Moreover,
continued qualification and taxation as a REIT depends upon our ability to meet,
through actual annual operating results, distribution levels and diversity of
stock ownership, as well as the other various qualification tests imposed under
the Code, the results of which will not be reviewed by
Sonnenschein. Accordingly, no assurance can be given that the actual
results of our operations will satisfy such requirements. Additional information
regarding the risks associated with our failure to qualify as a REIT are set
forth under the caption “Risk Factors” above. The opinion of
Sonnenschein is based upon current law, which is subject to change either
prospectively or retroactively. Changes in applicable law could modify the
conclusions expressed in its opinion. Moreover, unlike a tax ruling
(which we will not seek), an opinion of counsel is not binding on the IRS, and
no assurance can be given that the IRS will not or could not successfully
challenge our status as a REIT.
WE URGE
YOU TO CONSULT YOUR OWN TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO
YOU OF INVESTING IN OUR COMMON STOCK AND OF OUR ELECTION TO BE TAXED AS A REIT.
SPECIFICALLY, YOU SHOULD CONSULT YOUR OWN TAX ADVISOR REGARDING THE FEDERAL,
STATE, LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES OF SUCH INVESTMENT AND
ELECTION AND REGARDING POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
Taxation
We
elected to be taxed as a REIT under the U.S. federal income tax laws beginning
with our taxable year ended December 31, 1983. We believe that we have operated
in a manner qualifying us as a REIT since our election and intend to operate in
a manner that will preserve that qualification. This section discusses the laws
governing the U.S. federal income tax treatment of a REIT and its stockholders.
These laws are highly technical and complex.
Our
qualification as a REIT depends on our ability to meet, on a continuing basis,
qualification tests set forth in the U.S. federal tax laws. Those qualification
tests involve the percentage of income that we earn from specified sources, the
percentages of our assets that fall within specified categories, the diversity
of our stock ownership and the percentage of our earnings that we distribute. We
describe the REIT qualification tests in more detail below. For a discussion of
the tax treatment of us and our stockholders if we fail to qualify as a REIT,
see “Failure to Qualify,” below.
If we
qualify as a REIT, we generally will not be subject to U.S. federal income tax
on the taxable income that we distribute to our stockholders. The benefit of
that tax treatment is that it avoids the “double taxation” (i.e., taxation at
both the corporate and stockholder levels) that generally results from owning
stock in a “C” corporation. However, we will be subject to U.S. federal tax in
the following circumstances:
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We
will pay U.S. federal income tax on taxable income, including net capital
gain, that we do not distribute to stockholders during, or within a
specified time period after, the calendar year in which the income is
earned.
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We
may be subject to the “alternative minimum tax” on any items of tax
preference that we do not distribute or allocate to
stockholders.
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We
will pay income tax at the highest corporate rate
on:
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net
income from the sale or other disposition of property acquired through
foreclosure that we hold primarily for sale to customers in the ordinary
course of business; and
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other
non-qualifying income from the property discussed
above.
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We
will pay a 100% tax on net income from sales or other dispositions of
property, other than foreclosure property, that we hold primarily for sale
to customers in the ordinary course of
business.
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If
we fail to satisfy the 75% gross income test or the 95% gross income test,
as described below under “Income Tests,” and nonetheless continue to
qualify as a REIT because we meet other requirements, we will pay a 100%
tax on the gross income attributable to the greater of the amounts by
which we fail the 75% and 95% gross income tests, respectively, multiplied
by a fraction intended to reflect our
profitability.
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If
we fail to distribute during a calendar year at least the sum
of:
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85%
of our REIT ordinary income for the
year;
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95%
of our REIT capital gain net income for the year;
and
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any
undistributed taxable income from earlier periods;
then
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we will
pay a 4% excise tax on the excess of the required distribution over the amount
we actually distributed.
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We
may elect to retain and pay income tax on our net long-term capital
gain.
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We
will be subject to a 100% excise tax on transactions with a taxable REIT
subsidiary that are not conducted on an arm's-length
basis.
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If
we acquire any asset from a “C” corporation (or any other corporation that
generally is subject to full corporate-level tax) in a merger or other
transaction in which we acquire a basis in the asset that is determined by
reference either to the “C” corporation's basis in the asset or to the
basis of another asset (a “conversion transaction”), we will pay tax at
the highest regular corporate rate applicable if we recognize any net
built-in gain on the sale or disposition of such asset during the 10-year
period after we acquire such asset.
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Requirements
for Qualification
A REIT is
an entity that meets each of the following requirements:
1. It
is managed by trustees or directors.
2. Its
beneficial ownership is evidenced by transferable shares, or by transferable
certificates of beneficial interest.
3. It
would be taxable as a domestic “C” corporation, but for the REIT provisions of
the U.S. federal income tax laws.
4. It
is neither a financial institution nor an insurance company subject to special
provisions of the U.S. federal income tax laws.
5. At
least 100 persons are beneficial owners of its shares or ownership
certificates.
6. Not
more than 50% in value of its outstanding shares or ownership certificates is
owned, directly or indirectly, by five or fewer individuals, which the U.S.
federal income tax laws define to include certain entities, during the last half
of any taxable year.
7. It
elects to be a REIT, or has made such election for a previous taxable year, and
satisfies all relevant filing and other administrative requirements established
by the IRS that must be met to elect and maintain REIT status.
8. It
meets certain other qualification tests, described below, regarding the nature
of its income and assets.
We must
meet requirements 1 through 4 during our entire taxable year and must meet
requirement 5 during at least 335 days of a taxable year of 12 months, or during
a proportionate part of a taxable year of less than 12 months. If we
comply with all the applicable requirements for ascertaining the ownership of
our outstanding shares in a taxable year and have no reason to know that we
violated requirement 6, we will be deemed to have satisfied requirement 6 for
that taxable year. For purposes of determining share ownership under requirement
6, an “individual” generally includes a supplemental unemployment compensation
benefits plan, a private foundation, or a portion of a trust permanently set
aside or used exclusively for charitable purposes. An “individual,” however,
generally does not include a trust that is a qualified employee pension or
profit sharing trust under the U.S. federal income tax laws, and beneficiaries
of such a trust will be treated as holding our shares in proportion to their
actuarial interests in the trust for purposes of requirement 6. We
have issued sufficient shares of common stock with sufficient diversity of
ownership to satisfy requirements 5 and 6. In addition, our charter restricts
certain ownership and transfer of the shares of common stock so that we should
continue to satisfy these requirements. Provisions of our charter are
discussed in greater detail above under “Provisions of Maryland Law and of our
Charter and Bylaws”.
A
corporation that is a “qualified REIT subsidiary” is not treated as a
corporation separate from its parent REIT. All assets, liabilities and items of
income, deduction and credit of a “qualified REIT subsidiary” are treated as
assets, liabilities and items of income, deduction and credit of the parent
REIT. A “qualified REIT subsidiary” is a corporation, all of the capital stock
of which is owned by the REIT and for which no election has been made to treat
such corporation as a “taxable REIT subsidiary.” We own certain of
our properties through subsidiaries. Each of our subsidiaries
qualifies as a “qualified REIT subsidiary” under U.S. federal income tax
law. Accordingly, for U.S. federal income tax purposes, our
subsidiaries are ignored as separate entities, and all of their assets,
liabilities and items of income, deduction and credit are treated as our assets,
liabilities and items of income, deduction and credit.
An
unincorporated domestic entity with two or more owners is generally treated as a
partnership for U.S. federal income tax purposes. In the case of a REIT that is
a partner in an entity treated as a partnership, the REIT is treated as owning
its proportionate share of the assets of the partnership and as earning its
allocable share of the gross income of the partnership for purposes of the
applicable REIT qualification tests. Thus, our proportionate share of the
assets, liabilities and items of income of any partnership or joint venture or
limited liability company that is treated as a partnership for U.S. federal
income tax purposes in which we have acquired or will acquire an interest,
directly or indirectly (a “subsidiary partnership”), will be treated as our
assets and gross income for purposes of applying the various REIT qualification
tests. We own membership interests in five joint
ventures. We are also owners of a 50% interest in a property as
tenants in common with a group of investors. Accordingly, our
proportionate share of the assets, liabilities and items of income of the joint
ventures and the tenancy in common will be treated as our assets and gross
income for purposes of applying the various REIT qualification tests discussed
in this section.
A REIT
may own up to 100% of the stock of a “taxable REIT subsidiary” (“TRS”). A TRS
may earn income that would not be qualifying income if earned directly by the
parent REIT. Both the subsidiary and the REIT must jointly elect to treat the
subsidiary as a TRS. A TRS will pay income tax at regular corporate rates on any
income that it earns. In addition, the TRS rules limit the deductibility of
interest paid or accrued by a TRS to its parent REIT to assure that the TRS is
subject to an appropriate level of corporate taxation. Further, the rules impose
a 100% excise tax on transactions between a TRS and its parent REIT (or the
REIT's tenants) that are not conducted on an arm's-length basis. We
do not currently have any TRSs, but cannot foreclose the possibility of the
formation of one or more TRSs in future taxable years.
Income
Tests
We must
satisfy two gross income tests annually to maintain our qualification as a REIT.
First, at least 75% of our gross income for each taxable year must consist of
specific types of income that we derive, directly or indirectly, from
investments relating to real property or mortgages on real property or qualified
temporary investment income. Qualifying income for purposes of this 75% gross
income test generally includes:
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rents
from real property;
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interest
on debt secured by mortgages on real property, or on interests in real
property;
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dividends
or other distributions on, and gain from the sale of, shares in other
REITs;
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gain
from the sale of real estate
assets;
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abatements
and refunds of taxes on real property;
and
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income
and gain from foreclosure property.
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Second,
in general, at least 95% of our gross income for each taxable year must consist
of income that is qualifying income for purposes of the 75% gross income test,
other types of interest and dividends, gain from the sale or disposition of
stock or securities, income from certain interest rate hedging contracts, or any
combination of the foregoing. Gross income from sales of property held primarily
for sale to customers in the ordinary course of business is excluded from both
the numerator and the denominator in both income tests. The following paragraphs
discuss the specific application of the gross income tests to us.
A REIT
will incur a 100% tax on the net income derived from any “prohibited
transaction,” which is a sale or other disposition of property, other than
foreclosure property, that the REIT holds primarily for sale to customers in the
ordinary course of a trade or business. We believe that none of our assets are
held primarily for sale to customers and that a sale of any of our assets would
not be in the ordinary course of our business. Whether a REIT holds
an asset “primarily for sale to customers in the ordinary course of a trade or
business” depends, however, on the facts and circumstances in effect from time
to time, including those related to a particular asset. Nevertheless, we will
attempt to comply with the terms of safe-harbor provisions in the U.S. federal
income tax laws prescribing when an asset sale will not be characterized as a
prohibited transaction. We cannot assure you, however, that we can comply with
the safe-harbor provisions or that we will avoid owning property that may be
characterized as property that we hold “primarily for sale to customers in the
ordinary course of a trade or business.”
While
income from foreclosure property qualifies for purposes of satisfying the 75%
and 95% gross income tests, we will be subject to tax at the maximum corporate
rate on any income from such foreclosure property, other than any portion of
such income that otherwise would be qualifying income for purposes of the 75%
gross income test, less expenses directly connected with the production of that
income. “Foreclosure property” is any real property, including interests in real
property, and any personal property incident to such real property:
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that
is acquired by a REIT as a result of the REIT having bid on such property
at foreclosure, or having otherwise reduced such property to ownership or
possession by agreement or process of law, after there was a default (or
default was imminent) on a lease of such property or on indebtedness that
such property secured;
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for
which the related loan was acquired by the REIT at a time when the default
was not imminent or anticipated;
and
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for
which the REIT makes a proper election to treat the property as
foreclosure property.
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However,
a REIT will not be considered to have foreclosed on a property where the REIT
takes control of the property as a mortgagee-in-possession and cannot receive
any profit or sustain any loss except as a creditor of the mortgagor. Property
generally ceases to be foreclosure property at the end of the third taxable year
following the taxable year in which the REIT acquired the property, or longer if
an extension is granted by the Secretary of the Treasury. This grace period
terminates and foreclosure property ceases to be foreclosure property on the
first day:
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on
which a lease is entered into for the property that, by its terms, will
give rise to income that does not qualify for purposes of the 75% gross
income test, or any amount is received or accrued, directly or indirectly,
pursuant to a lease entered into on or after such day that will give rise
to income that does not qualify for purposes of the 75% gross income
test;
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on
which any construction takes place on the property, other than completion
of a building or any other improvement, where more than 10% of the
construction was completed before default became imminent;
or
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which
is more than 90 days after the day on which the REIT acquired the property
and the property is used in a trade or business which is conducted by the
REIT, other than through an independent contractor from whom the REIT
itself does not derive or receive any
income.
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We have
no foreclosure property as of the date of this prospectus.
Rent that
we receive from real property that we own and lease to tenants will qualify as
“rents from real property,” which is qualifying income for purposes of both the
75% and 95% gross income tests, only if each of the following conditions is
met:
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The
rent must not be based, in whole or in part, on the income or profits of
any person, but may be based on a fixed percentage or percentages of
receipts or sales;
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Neither
we nor any direct or indirect owner of 10% or more of our shares may own,
actually or constructively, 10% or more of a tenant from whom we receive
rent (other than a TRS). Rent we receive from a TRS will qualify as “rents
from real property” if at least 90% of the leased space of the property is
rented to persons other than TRSs and 10%-owned tenants and the amount of
rent paid by the TRS is substantially comparable to the rent paid by the
other tenants of the property for comparable
space;
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Not
all of the rent received under a lease of real property will qualify as
“rents from real property” if the rent attributable to the personal
property leased in connection with such lease is more than 15% of the
total rent received under the lease. If rent attributable to the personal
property leased is more than 15% of the total rent received, none of the
rent allocable to the personal property will be considered “rents from
real property” for purposes of the 75% and 95% gross income tests. The
allocation of rent between real and personal property is based on the
relative fair market values of the real and personal property;
and
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We
generally must not operate or manage our real property or furnish or
render services to our tenants, other than through an independent
contractor who is adequately compensated and from whom we do not derive
revenue. However, we need not provide services through an independent
contractor, but instead may provide services directly, if the services are
“usually or customarily rendered” in connection with the rental of space
for occupancy only and are not considered to be provided for the tenant’
convenience. In addition, we may provide a minimal amount of
“noncustomary” services to the tenants of a property, other than through
an independent contractor, as long as our income from the services does
not exceed 1% of our income from the related property. Further, we may own
up to 100% of the stock of a TRS. A TRS generally can provide customary
and noncustomary services to our tenants without tainting our rental
income.
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We
believe that the rents we receive meet all of these conditions.
If we
fail to satisfy one or both of the gross income tests for any taxable year, we
nevertheless may qualify as a REIT for that year if we qualify for relief under
certain provisions of the U.S. federal income tax laws. Those relief provisions
generally will be available if:
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our
failure to meet such tests is due to reasonable cause and not due to
willful neglect;
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we
attach a schedule of the sources of our income to our tax return;
and
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any
incorrect information on such schedule is not due to fraud with intent to
evade tax.
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We cannot
predict, however, whether in any relevant circumstance we would qualify for the
relief provisions referenced above. In addition, as discussed above in “Federal
Income Tax Considerations -- Taxation,” even if the relief provisions apply, we
would incur a 100% tax on the gross income attributable to the greater of the
amounts by which we fail the 75% and 95% gross income tests, respectively,
multiplied by a fraction intended to reflect our profitability.
Asset
Tests
To
maintain our qualification as a REIT, we also must satisfy two asset tests at
the end of each quarter of each taxable year. First, at least 75% of the value
of our total assets must consist of:
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interests
in real property, including leaseholds and options to acquire real
property and leaseholds;
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interests
in mortgages on real property;
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stock
in other REITs; and
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investments
in stock or debt instruments during the one-year period following our
receipt of new capital that we raise through equity offerings or offerings
of debt featuring at least a five-year
term.
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Under the
second asset test, except for (1) securities in the 75% asset class, (2)
securities in a TRS or qualified REIT subsidiary, and (3) certain partnership
interests and certain debt obligations:
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not
more than 5% of the value of our total assets may be represented by
securities of any one issuer; and
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we
may not own securities that possess more than 10% of the total voting
power of the outstanding securities of any one issuer; and we may not own
securities that have a value of more than 10% of the total value of the
outstanding securities of any one
issuer.
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In
addition, not more than 25% of the value of our total assets may be represented
by securities of one or more TRSs.
We
believe that our existing assets are qualifying assets for purposes of the
aforementioned asset tests. We also believe that any additional real property
that we acquire, loans that we extend and temporary investments that we make
generally will be qualifying assets for purposes of such asset tests. We will monitor the
status of our acquired assets for purposes of the various asset tests and will
endeavor to manage our portfolio in order to comply at all times with such
tests.
If we
fail to satisfy the asset tests at the end of a calendar quarter, we will not
lose our REIT status if:
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we
satisfied the asset tests at the end of the preceding calendar quarter;
and
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the
discrepancy between the value of our assets and the asset test
requirements arose from changes in the market values of our assets and was
not wholly or partly caused by the acquisition of one or more
non-qualifying assets.
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If we did
not satisfy the condition described in the second item, above, we still could
avoid disqualification by eliminating any discrepancy within 30 days after the
close of the calendar quarter in which it arose.
Although
we own no TRSs currently, we may own up to 100% of the stock of one or more TRSs
in the future. TRSs can perform activities unrelated to the businesses of our
tenants, such as third-party management, development, and other independent
business activities, as well as provide services to our tenants. Should such an
entity be organized, we and the relevant subsidiary must elect for the
subsidiary to be treated as a TRS. A corporation of which a TRS directly or
indirectly owns more than 35% of the voting power or value of the stock will
automatically be treated as a TRS itself. The deductibility of interest paid or
accrued by a TRS to us is limited to assure that the TRS is subject to an
appropriate level of corporate taxation. Further, there is a 100% excise tax on
transactions between a TRS and us or our tenants that are not conducted on an
arm's-length basis. We may not own more than 10% of the voting power or value of
the stock of a taxable subsidiary that is not treated as a TRS. As noted above,
no more than 25% of our assets can consist of securities of TRSs.
Distribution
Requirements
Each
taxable year, we must distribute dividends, other than capital gain dividends
and deemed distributions of retained capital gain, to our stockholders in an
aggregate amount at least equal to:
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the
sum of (1) 90% of our "REIT taxable income," computed without regard to
the dividends paid deduction and our net capital gain or loss; and (2) 90%
of our after-tax net income, if any, from foreclosure property;
minus
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the
sum of certain items of non-cash
income.
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We must
pay such distributions in the taxable year to which they relate, or in the
following taxable year if we declare the distribution before we timely file our
U.S. federal income tax return for the year and pay the distribution on or
before the first regular dividend payment date after such
declaration.
We will
pay U.S. federal income tax on taxable income, including net capital gain, that
we do not distribute to stockholders. Furthermore, if we fail to distribute
during a calendar year, or by the end of January following the calendar year in
the case of distributions with declaration and record dates falling in the last
three-months of the calendar year, at least the sum of:
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85%
of our REIT ordinary income for such
year;
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95%
of our REIT capital gain net income for such year;
and
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any
undistributed taxable income from prior periods,
then
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we have
made, and we intend to continue to make, timely distributions sufficient to
satisfy the foregoing annual distribution requirements.
We will
incur a 4% nondeductible excise tax on the excess of such required distribution
over the amounts we actually distributed. We may elect to retain and pay income
tax on the net long-term capital gain we receive in a taxable year. See "Federal
Income Tax Considerations - Taxation of Taxable U.S. Stockholders," below. If we
so elect, we will be treated as having distributed any such retained amount for
purposes of the 4% excise tax described above.
It is
possible that, from time to time, we may experience timing differences between:
(1) the actual receipt of income and actual payment of deductible expenses; and
(2) the inclusion of that income and the deduction of such expenses in arriving
at our REIT taxable income. As a result of the foregoing, we may have
less cash than is necessary to distribute all of our taxable income and thereby
avoid corporate income tax and the 4% excise tax imposed on certain
undistributed income. In such a situation, we may need to borrow
funds or issue additional shares of our stock to achieve the liquidity necessary
to make the required distributions.
Under
certain circumstances, we may be able to correct a failure to meet the
distribution requirement for a year by paying "deficiency dividends" to our
stockholders in a later year. We may include such deficiency dividends in our
deduction for dividends paid for the earlier year. Although we may be able to
avoid income tax on amounts distributed as deficiency dividends, we will be
required to pay interest to the IRS based upon the amount of any deduction we
take for deficiency dividends.
Recordkeeping
Requirements
We must
maintain certain records in order to qualify as a REIT. In addition, to avoid a
monetary penalty, we must request information from certain of our stockholders
on an annual basis designed to disclose the actual ownership of our outstanding
shares. We have complied, and we intend to continue to comply, with these
requirements.
Failure
to Qualify
If we
fail to qualify as a REIT in any taxable year, and no relief provision is
available, we would be subject to U.S. federal income tax, any applicable
alternative minimum tax, and state and local taxes in states where we are doing
business, on our taxable income at regular corporate rates. In calculating our
taxable income in a year in which we fail to qualify as a REIT, we would not be
able to deduct amounts paid out to stockholders. Moreover, we would not be
required to distribute any amounts to stockholders in that year. In such event,
to the extent of our current and accumulated earnings and profits, all
distributions to stockholders would be taxable to them as dividend income. Under
such circumstances and subject to certain limitations of the U.S. federal income
tax laws, corporate stockholders might be eligible for the dividends received
deduction and individual stockholders may be able to treat the dividends as
qualified dividend income taxable at the reduced income tax rate of 15% or less
on such dividends for tax years beginning before 2011. Unless we
qualified for relief under specific statutory provisions, we also would be
disqualified from being taxed as a REIT for the four taxable years following the
year during which we ceased to qualify as a REIT. We cannot predict
whether, under any applicable circumstances, we would qualify for any available
statutory relief if we ever fail to qualify as a REIT.
Taxation
of Taxable U.S. Stockholders
As long
as we qualify as a REIT, a taxable "U.S. stockholder" must take into account as
ordinary income distributions made out of our current or accumulated earnings
and profits that we do not designate as capital gain dividends or retained
long-term capital gain. A corporate U.S. stockholder will not qualify for the
dividends received deduction generally available to corporations with respect to
such distributions. The term "U.S. stockholder" means a holder of our common
stock that, for U.S. federal income tax purposes, is:
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a
citizen or resident of the U.S.;
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an
entity created or organized under the laws of the U.S. or of a political
subdivision of the U.S.;
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an
estate whose income is includible in gross income for U.S. federal income
tax purposes regardless of its source;
or
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any
trust with respect to which:
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a
U.S. court is able to exercise primary supervision over its
administration;
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and
one or more U.S. persons have the authority to control all of its
substantial decisions; or
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it
has a valid election in effect under applicable Treasury regulations to be
treated as a U.S. person.
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A U.S.
stockholder generally will recognize and be taxed on distributions that we
designate as capital gain dividends as long-term capital gain without regard to
the period for which the U.S. stockholder has held our common stock. A corporate
U.S. stockholder, however, may be required to treat up to 20% of certain capital
gain dividends as ordinary income.
We may
elect to retain and pay income tax on the net long-term capital gain that we
receive in a taxable year. In that case, a U.S. stockholder would be taxed on
its proportionate share of our undistributed long-term capital gain. The U.S.
stockholder would, however, receive a credit or refund for its proportionate
share of the tax we paid. The U.S. stockholder would increase the basis in its
shares of our common stock by the amount of its proportionate share of our
undistributed long-term capital gain, minus its share of the tax we
paid.
A U.S.
stockholder will not incur tax on a distribution in excess of our current and
accumulated earnings and profits if the distribution does not exceed the
adjusted tax basis of the U.S. stockholder's shares of our common stock.
Instead, the distribution will reduce the adjusted tax basis of such shares of
our common stock in the U.S. stockholder's hands. A U.S. stockholder will
recognize and pay tax on a distribution in excess of both our current and
accumulated earnings and profits and such stockholder's adjusted tax basis in
its shares of common stock as long-term capital gain, or short-term capital gain
if the shares of our common stock have been held by the stockholder for one year
or less, assuming such shares of common stock are a capital asset in the hands
of the U.S. stockholder. For purposes of determining whether a distribution is
made out of our current or accumulated earnings and profits, our earnings and
profits will be allocated first to dividends on our preferred stock (if any are
issued) and then to dividends on our common stock. In addition, if we
declare a distribution in October, November or December of any year that is
payable to a U.S. stockholder of record on a specific date in any such
month, such distribution may be treated as both paid by us and
received by the U.S. stockholder on December 31 of such year, provided that we
actually pay the distribution during January of the following calendar
year.
Stockholders
may not include in their individual income tax returns any of our net operating
losses or capital losses. Instead, these losses are generally carried over by us
for potential offset against our future income. Taxable distributions from us
and gain from the disposition of the shares of our common stock will not be
treated as passive activity income and, therefore, stockholders generally will
not be able to apply any "passive activity losses," such as losses from certain
types of limited partnerships in which the stockholder is a limited partner,
against such income. In addition, taxable distributions from us and gain from
the disposition of shares of our common stock generally will be treated as
investment income for purposes of the investment interest limitations. We will
notify stockholders after the close of each taxable year as to the portions of
the distributions attributable to that year that constitute ordinary income,
return of capital and capital gain.
Taxation
of U.S. Stockholders on the Disposition of Our Common Stock
In
general, a U.S. stockholder who is not a dealer in securities must treat any
gain or loss realized upon a taxable disposition of his or her shares of our
common stock as long-term capital gain or loss if the U.S. stockholder has held
the shares of common stock for more than one year, and otherwise as short-term
capital gain or loss. However, a U.S. stockholder must treat any loss upon a
sale or exchange of shares of our common stock held by such stockholder for
six-months or less as a long-term capital loss to the extent of capital gain
dividends and other distributions from us that such U.S. stockholder treats as
long-term capital gain. All or a portion of any loss that a U.S. stockholder
realizes upon a taxable disposition of the shares of our common stock may be
disallowed if the U.S. stockholder purchases other shares of common stock within
30 days before or after the disposition.
Capital
Gains and Losses
The U.S.
federal tax rate differential between long-term capital gain and ordinary income
for non-corporate taxpayers may be significant. A taxpayer generally must hold a
capital asset for more than one year for gain or loss derived from the sale or
exchange of such asset to be treated as long-term capital gain or loss. The
highest marginal individual income tax rate on ordinary income for the 2008 tax
year is 35%. The maximum tax rate on long-term capital gain applicable to
non-corporate taxpayers is 15% for sales and exchanges of assets held for more
than one year and occurring before 2011. The maximum tax rate on
long-term capital gain from the sale or exchange of "section 1250 property," or
depreciable real property, is 25% to the extent that such gain would have been
treated as ordinary income if the property were "section 1245 property." With
respect to distributions that we designate as capital gain dividends and any
retained capital gain that we are deemed to distribute, we may designate whether
such a distribution is taxable to our non-corporate stockholders at a 15%, or
25% rate. In addition, the characterization of income as capital gain or
ordinary income may affect the deductibility of capital losses. A non-corporate
taxpayer may deduct capital losses not offset by capital gains against its
ordinary income only up to a maximum annual amount of $3,000. A non-corporate
taxpayer may carry forward unused capital losses indefinitely. A corporate
taxpayer must pay tax on its net capital gain at ordinary corporate rates. A
corporate taxpayer can deduct capital losses only to the extent of capital
gains, with unused losses being carried back three years and forward five
years.
Information
Reporting Requirements and Backup Witholding
We will
report to our stockholders and to the IRS the amount of distributions we pay
during each calendar year, and the amount of tax we withhold, if any. Under the
backup withholding rules, a stockholder may be subject to backup withholding at
a rate of 28% in 2008 with respect to distributions unless the
holder:
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is
a corporation or comes within certain other exempt categories and, when
required, demonstrates this fact;
or
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provides
a taxpayer identification number, certifies as to no loss of exemption
from backup withholding, and otherwise complies with the applicable
requirements of the backup withholding
rules.
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A
stockholder who does not provide us with its correct taxpayer identification
number also may be subject to penalties imposed by the IRS. Any amount paid as
backup withholding will be creditable against the stockholder's income tax
liability. In addition, we may be required to withhold a portion of capital gain
distributions to any stockholders who fail to certify their non-foreign status
to us. For a discussion of the backup withholding rules as applied to non-U.S.
stockholders, see "Certain Federal Income Tax Consequences - Taxation of
Non-U.S. Stockholders," below.
Taxation
of Tax-Exempt Stockholders
Tax-exempt
entities, including qualified employee pension and profit sharing trusts and
individual retirement accounts, generally are exempt from U.S. federal income
taxation. However, they are subject to taxation on their unrelated business
taxable income. While many investments in real estate generate unrelated
business taxable income, the IRS has issued a ruling that dividend distributions
from a REIT to an exempt employee pension trust do not constitute unrelated
business taxable income so long as the exempt employee pension trust does not
otherwise use the shares of the REIT in an unrelated trade or business of the
pension trust. Based on that ruling, amounts that we distribute to tax-exempt
stockholders generally should not constitute unrelated business taxable income.
However, if a tax-exempt stockholder were to finance its acquisition of shares
of our common stock with debt, a portion of the income that it receives from us
would constitute unrelated business taxable income pursuant to the
"debt-financed property" rules. Furthermore, social clubs, voluntary employee
benefit associations, supplemental unemployment benefit trusts and qualified
group legal services plans that are exempt from taxation under special
provisions of the U.S. federal income tax laws are subject to different
unrelated business taxable income rules, which generally will require them to
characterize distributions that they receive from us as unrelated business
taxable income. Finally, in certain circumstances, a qualified employee pension
or profit sharing trust that owns more than 10% of our shares (by value) must
treat a percentage of the dividends that it receives as unrelated business
taxable income. Such percentage is equal to the gross income we would be deemed
to derive from an unrelated trade or business, determined as if we were a
pension trust, divided by our total gross income for the year in which we pay
the dividends. This rule applies to a pension trust holding more than 10% of our
shares (by value) only if:
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the
percentage of our dividends that the tax-exempt trust must treat as
unrelated business taxable income is at least
5%;
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we
qualify as a REIT by reason of the modification of the rule requiring that
no more than 50% of our shares be owned by five or fewer individuals that
allows the beneficiaries of the pension trust to be treated as holding our
shares in proportion to their actuarial interests in the pension trust;
and
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one
pension trust owns more than 25% of the value of our shares;
or
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a
group of pension trusts individually holding more than 10% of the value of
our shares collectively owns more than 50% of the value of our
shares.
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Taxation
of Non-U.S. Stockholders
The rules
governing U.S. federal income taxation of nonresident alien individuals, foreign
corporations, foreign partnerships, and other foreign stockholders are complex.
This section is only a summary of such rules. WE URGE NON-U.S. STOCKHOLDERS TO
CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE IMPACT OF U.S. FEDERAL, STATE,
AND LOCAL INCOME TAX LAWS (AS WELL AS THE TAX LAWS OF THEIR HOME JURISDICTIONS)
ON OWNERSHIP OF SHARES OF COMMON STOCK, INCLUDING ANY REPORTING
REQUIREMENTS.
A
non-U.S. stockholder that receives a distribution that is not attributable to
gain from our sale or exchange of U.S. real property interests, as defined
below, and that we do not designate as a capital gain dividend or retained
capital gain, will recognize ordinary income to the extent that we pay the
distribution out of our current or accumulated earnings and profits. A
withholding tax equal to 30% of the gross amount of the distribution ordinarily
will apply unless an applicable tax treaty reduces or eliminates the tax.
However, if a distribution is treated as effectively connected with the non-U.S.
stockholder's conduct of a U.S. trade or business, the non-U.S. stockholder
generally will be subject to U.S. federal income tax on the distribution at
graduated rates, in the same manner as U.S. stockholders are taxed on
distributions, and also may be subject to the 30% branch profits tax in the case
of a non-U.S. stockholder that is a non-U.S. corporation. We plan to withhold
U.S. income tax at the rate of 30% on the gross amount of any distribution paid
to a non-U.S. stockholder unless either:
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a
lower treaty rate applies and the non-U.S. stockholder files an IRS Form
W-8BEN evidencing eligibility for that reduced rate with us;
or
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the
non-U.S. stockholder files an IRS Form W-8ECI with us claiming that the
distribution is effectively connected
income.
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A
non-U.S. stockholder will not incur tax on a distribution that is in excess of
our current and accumulated earnings and profits if the distribution does not
exceed the adjusted basis of its shares of our common stock. Instead, the
distribution will reduce the adjusted basis of such non-U.S. stockholder in
those shares of common stock. A non-U.S. stockholder will be subject to tax on a
distribution that exceeds both our current and accumulated earnings and profits
and the adjusted basis of its shares of our common stock if the non-U.S.
stockholder otherwise would be subject to tax on gain from the sale or
disposition of its shares of our common stock, as described below. Because we
generally cannot determine at the time we make a distribution whether or not the
distribution will exceed our current and accumulated earnings and profits, we
normally will withhold tax on the entire amount of any distribution at the same
rate as we would withhold on a dividend. However, a non-U.S. stockholder may
obtain a refund from the IRS of amounts that we withhold if we later determine
that a distribution, in fact, exceeded our current and accumulated earnings and
profits.
We must
withhold 10% of any distribution to a non-U.S. stockholder that exceeds our
current and accumulated earnings and profits. Consequently, although we intend
to withhold at a rate of 30% on the entire amount of any distribution, to the
extent that we do not do so, we will withhold at a rate of 10% on any portion of
a distribution not subject to withholding at a rate of 30%.
For any
year in which we qualify as a REIT, a non-U.S. stockholder will incur tax on
distributions that are attributable to gain from our sale or exchange of "U.S.
real property interests" under special provisions of the U.S. federal income tax
laws known as "FIRPTA." The term "U.S. real property interests" includes
interests in U.S. real property and shares in corporations at least 50% of whose
assets consists of interests in U.S. real property. Under those rules, a
non-U.S. stockholder is taxed on distributions attributable to gain from sales
of U.S. real property interests as if the gain were effectively connected with a
U.S. business of the non-U.S. stockholder. A non-U.S. stockholder thus would be
taxed on this distribution at the normal capital gain rates applicable to U.S.
stockholders, subject to applicable alternative minimum tax and a special
alternative minimum tax in the case of a nonresident alien individual. A
non-U.S. corporate stockholder not entitled to treaty relief or exemption also
may be subject to the 30% branch profits tax on such a distribution. We must
withhold 35% of any distribution to a non-U.S. stockholder that we could
designate as a capital gain dividend. A non-U.S. stockholder may receive a
credit against its U.S. tax liability for the amount we withhold.
A
non-U.S. stockholder generally will not incur tax under FIRPTA on gain from the
sale of our stock as long as at all times, non-U.S. persons hold, directly or
indirectly, less than 50% in value of our outstanding shares. We cannot assure
you that that test will be met at all times or at any specific time. However, a
non-U.S. stockholder that owned, actually or constructively, 5% or less of the
shares of our common stock at all times during a specified testing period will
not incur tax under FIRPTA if the shares of common stock are "regularly traded"
on an established securities market. To the extent that our common stock will be
regularly traded on an established securities market, a non-U.S. stockholder
will not incur tax under FIRPTA unless it owns more than 5% of our common stock.
If the gain on the sale of the shares of our common stock were taxed under
FIRPTA, a non-U.S. stockholder would be taxed on that gain in the same manner as
U.S. stockholders subject to applicable alternative minimum tax, a special
alternative minimum tax in the case of nonresident alien individuals, and the
possible application of the 30% branch profits tax in the case of non-U.S.
corporations. Furthermore, a non-U.S. stockholder generally will incur tax on
gain not subject to FIRPTA if:
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the
gain is effectively connected with the non-U.S.
stockholder's U.S. trade or business, in which case the non-U.S.
stockholder will be subject to the same tax treatment as U.S. stockholders
with respect to such gain; or
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the
non-U.S. stockholder is a nonresident alien individual who was present in
the U.S. for 183 days or more during the taxable year and has a "tax home"
in the U.S., in which case the non-U.S. stockholder will incur a 30% tax
on his or her capital gains.
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State
and Local Taxes
We and/or
our stockholders may be subject to taxation by various states and localities,
including those in which we or a stockholder transacts business, owns property
or resides. The state and local tax treatment may differ from the U.S. federal
income tax treatment described above. Consequently, stockholders should consult
their own tax advisors regarding the effect of state and local tax laws upon an
investment in the shares of our common stock.
IMPORTANCE
OF OBTAINING PROFESSIONAL TAX ADVICE
THE TAX
DISCUSSION SET FORTH ABOVE IS FOR GENERAL INFORMATION ONLY. TAX CONSEQUENCES MAY
VARY BASED UPON THE PARTICULAR CIRCUMSTANCES OF EACH INVESTOR. PROSPECTIVE
INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE U.S.
FEDERAL, STATE AND LOCAL AND APPLICABLE FOREIGN TAX CONSEQUENCES OF AN
INVESTMENT IN OUR COMMON STOCK.
PLAN
OF DISTRIBUTION
These
securities may be sold directly by us, through dealers or agents designated from
time to time, or to or through underwriters or may be sold directly by us for
consideration consisting of goods and property, including real property, or
through a combination of these methods. The prospectus supplement
with respect to the securities being offered will set forth the terms of the
offering, including the names of the underwriters, dealers or agents, if any,
the purchase price of the securities, our net proceeds, any underwriting
discounts and other items constituting underwriters' compensation, public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers and any securities exchanges on which such securities may be listed.
These securities may also be offered by us to our stockholders in lieu of
dividends.
If
underwriters are used in an offering, we will execute an underwriting agreement
with such underwriters and will specify the name of each underwriter and the
terms of the transaction (including any underwriting discounts and other terms
constituting compensation of the underwriters and any dealers) in a prospectus
supplement. If an underwriting syndicate is used, the managing
underwriter(s) will be specified on the cover of the prospectus
supplement. If underwriters are used in the sale, the offered
securities will be acquired by the underwriters for their own accounts and may
be resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Any public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time. Unless otherwise set forth in the prospectus supplement, the
obligations of the underwriters to purchase the offered securities will be
subject to conditions precedent and the underwriters will be obligated to
purchase all of the offered securities if any are purchased.
If dealers are used in an offering, we will sell the securities to
the dealers as principals. The dealers may resell the securities to
the public at varying prices, which they determine at the time of
resale. The names of the dealers and the terms of the transaction
will be specified in a prospectus supplement.
The
securities may be sold directly by us or through agents we
designate. If agents are used in an offering, the names of the agents
and the terms of the agency will be specified in a prospectus
supplement. Unless otherwise indicated in a prospectus supplement,
the agents will act on a best-efforts basis for the period of their
appointment.
Dealers
and agents named in a prospectus supplement may be deemed to be underwriters
(within the meaning of the Securities Act) of the securities described
therein. In addition, we may sell the securities directly to
institutional investors or others who may be deemed to be underwriters within
the meaning of the Securities Act with respect to any resales
thereof.
Underwriters,
dealers and agents, may be entitled to indemnification by us against specific
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the underwriters or agents may be
required to make in respect thereof, under underwriting or other
agreements. The terms of any indemnification provisions will be set
forth in a prospectus supplement. Certain underwriters, dealers or
agents and their associates may engage in transactions with and perform services
for us in the ordinary course of business.
If so
indicated in a prospectus supplement, we will authorize underwriters or other
persons acting as our agents to solicit offers by institutional investors to
purchase securities pursuant to contracts providing for payment and delivery on
a future date. We may enter contracts with commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutional investors. The
obligations of any institutional investor will be subject to the condition that
its purchase of the offered securities will not be illegal at the time of
delivery. The underwriters and other agents will not be responsible
for the validity or performance of contracts.
Any
common stock sold pursuant to a prospectus supplement will be eligible for
trading on the New York Stock Exchange, subject to official notice of
issuance. Any underwriters to whom securities are sold by us for
public offering and sale may make a market in the securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice.
LEGAL
MATTERS
The
validity of the common stock offered pursuant to this prospectus will be passed
upon by Sonnenschein Nath & Rosenthal LLP.
EXPERTS
The
consolidated financial statements of One Liberty Properties, Inc. appearing in
One Liberty Properties, Inc.’s Annual Report (Form 10-K/A) for the year ended
December 31, 2008 (including a schedule appearing therein), have been audited by
Ernst & Young LLP, independent registered public accounting firm, as set
forth in their report thereon, included therein, and incorporated herein by
reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.
PART
II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
The
following table sets forth the estimated expenses payable in connection with the
sale and distribution of the common stock registered hereby. All
amounts other than the SEC registration fee are estimated.
SEC
Registration Fee
|
|
$ |
2,790 |
|
New
York Stock Exchange Additional Listing Fee
|
|
$ |
— |
|
Accounting
Fees
|
|
$ |
25,000 |
|
Legal
Fees and Disbursements
|
|
$ |
50,000 |
|
Printing
Fees
|
|
$ |
5,000 |
|
Miscellaneous
|
|
$ |
7,210
|
|
|
|
|
|
|
Total:
|
|
$ |
90,000
|
|
Item
15. Indemnification of Officers and Directors.
The
registrant’s charter obligates it to indemnify its directors and officers to the
maximum extent permitted by Maryland law. The Maryland General Corporation Law
(“MGCL”) permits a corporation to indemnify its present and former directors and
officers against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by them in connection with any proceeding to which
they may be a party by reason of their service in those or other capacities,
unless it is established that (1) the act or omission of the director or officer
was material to the matter giving rise to the proceeding and (a) was committed
in bad faith, or (b) was the result of active and deliberate dishonesty, or (2)
the director or officer actually received an improper personal benefit in money,
property or services, or (3) in the case of any criminal proceeding, the
director or officer had reasonable cause to believe that the act or omission was
unlawful.
The MGCL
permits the charter of a Maryland corporation to include a provision limiting
the liability of its directors and officers to the corporation and its
stockholders for money damages, except to the extent that (1) it is proved that
the person actually received an improper benefit or profit in money, property or
services, or (2) a judgment or other final adjudication is entered in a
proceeding based on a finding that the person's action, or failure to act, was
the result of active and deliberate dishonesty and was material to the cause of
action adjudicated in the proceeding. The registrant’s charter
provides for elimination of the liability of its directors and officers to the
registrant or its stockholders for money damages to the maximum extent permitted
by Maryland law from time to time.
Item
16. Exhibits.
See the
index to exhibits, which is incorporated herein by reference.
Item
17. Undertakings.
(A) The
undersigned registrant hereby undertakes:
|
(1)
|
To
file, during the period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
|
|
(i)
|
To
include any prospectus required by Section 10(a)(3) of the Securities
Act;
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum aggregate offering price
set forth in the “Calculation of Registration Fee” table in the effective
registration statement.
|
|
(iii)
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement;
|
Provided, however, That
paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the information required to
be included in a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the SEC by the registrant pursuant to Section
13 or 15(d) of the Exchange Act that are incorporated by reference in the
registration statement, or is contained in a form of prospectus filed pursuant
to Rule 424(b) that is part of the registration statement.
|
(2)
|
That,
for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
|
|
(3)
|
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
|
|
(4)
|
That,
for the purpose of determining liability under the Securities Act to any
purchaser:
|
|
(i)
|
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be
deemed to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration statement;
and
|
|
(ii)
|
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or
(b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x)
for the purpose of providing the information required by section 10(a) of
the Securities Act shall be deemed to be part of and included in the
registration statement as of the earlier of the date such form of
prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes of
the issuer and any person that is at that date an underwriter, such date
shall be deemed to be a new effective date of the registration statement
relating to the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering
thereof. Provided, however, that
no statement made in a registration statement or prospectus that is part
of the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a
time of contract of sale prior to such effective date, supersede or modify
any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document
immediately prior to such effective
date.
|
|
(5)
|
That,
for the purpose of determining liability of the registrant under the
Securities Act to any purchaser in the initial distribution of the
securities, the undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such
purchaser:
|
|
(i)
|
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
|
|
(ii)
|
Any
free writing prospectus relating to the offering prepared by or on behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
|
|
(iii)
|
The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
|
|
(iv)
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser.
|
(B) The
undersigned registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrant’s annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan’s annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(C) Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the Village of
Great Neck Plaza, State of New York on April 6, 2009.
|
One
Liberty Properties, Inc.
Registrant
|
|
|
|
|
|
|
By:
|
/s/ * |
|
|
|
Patrick
J. Callan, Jr. |
|
|
|
President
and Chief Executive Officer |
|
|
|
|
|
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities indicated, on April
6, 2009.
(Signature)
|
|
(Title)
|
|
|
|
|
|
|
/s/
*
|
|
Chairman
of the Board of Directors
|
Fredric
H. Gould
|
|
|
|
|
|
|
|
President
and Chief Executive Officer
(principal
executive officer)
|
Patrick
J. Callan, Jr.
|
|
|
|
|
|
|
|
|
|
|
Director
|
Joseph
A. Amato
|
|
|
|
|
|
|
|
|
|
|
Director
|
Charles
Biederman
|
|
|
|
|
|
|
|
|
|
|
Director
|
James
J. Burns
|
|
|
|
|
|
|
|
|
|
|
Director
|
Joseph
A. DeLuca
|
|
|
|
|
|
|
|
|
|
|
Director
|
Matthew
J. Gould
|
|
|
|
|
|
|
|
|
|
|
Director
|
Jeffrey
A. Gould
|
|
|
|
|
|
|
|
|
|
|
Director
|
J.
Robert Lovejoy
|
|
|
|
|
|
|
|
|
|
|
Director
|
Eugene
I. Zuriff
|
|
|
|
|
|
|
|
|
|
|
Senior
Vice President and Chief Financial Officer
|
David
W. Kalish
|
|
|
|
|
|
|
|
|
|
|
Principal
Accounting Officer
|
Karen
Dunleavy
|
|
|
David W. Kalish, pursuant to
Powers of Attorney (executed by each of the officers and directors listed above
and indicated as signing above, and filed with the Securities and Exchange
Commission), by signing his name hereto does hereby sign and execute this
Amendment to the Registration Statement on behalf of each of the persons
referenced above.
|
|
|
|
Date:
April 6, 2009
|
By:
|
/s/
David W. Kalish |
|
|
|
David
W. Kalish |
|
|
|
|
|
|
INDEX TO
EXHIBITS
|
|
|
Exhibit
No.
|
Description
of Exhibit
|
|
|
3.1
|
Articles
of Amendment and Restatement of One Liberty Properties, Inc., dated July
20, 2004 (incorporated by reference to Exhibit 3.1 to One Liberty
Properties, Inc.'s Quarterly Report on Form 10-Q for the quarter ended
June 30,
2004).
|
3.2
|
Articles
of Amendment to Restated Articles of Incorporation of One Liberty
Properties, Inc. filed with the State of Assessments and Taxation of
Maryland on June 17, 2005 (incorporated by reference to Exhibit 3.1 to One
Liberty Properties, Inc.'s Quarterly Report on Form 10-Q for the quarter
ended June 30, 2005).
|
3.3
|
Articles
of Amendment to Restated Articles of Incorporation of One Liberty
Properties, Inc. filed with the State of Assessments and Taxation of
Maryland on June 21, 2005 (incorporated by reference to Exhibit 3.2 to One
Liberty Properties, Inc.'s Quarterly Report on Form 10-Q for the quarter
ended June 30, 2005).
|
3.4
|
ByLaws
of One Liberty Properties, Inc., as amended (incorporated by reference to
Exhibit 3.1 to One Liberty Properties, Inc.'s Current Report
on Form 8-K filed on December 12,
2007).
|
4.1
|
One
Liberty Properties, Inc. 2003 Incentive Plan (incorporated by reference to
Exhibit 4.1 to One Liberty Properties, Inc.'s Registration Statement on
Form S-8 filed on July 15, 2003).
|
4.2
|
Form
of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to
One Liberty Properties, Inc.'s Registration Statement on Form S-2,
Registration No. 333-86850, filed on April 24, 2002 and declared effective
on May 24, 2002).
|
5.1
|
Opinion
of Sonnenschein Nath & Rosenthal LLP
*
|
8.1
|
Tax
Opinion of Sonnenschein Nath & Rosenthal LLP
*
|
10.1
|
Amended
and Restated Loan Agreement, dated as of June 4, 2004, by and among One
Liberty Properties, Inc., Valley National Bank, Merchants Bank Division,
Bank Leumi USA, Israel Discount Bank of New York and Manufacturers and
Traders Trust Company (incorporated by reference to the Exhibit to One
Liberty Properties, Inc.'s Current Report on Form 8-K filed on June 8,
2004).
|
10.2
|
First
Amendment to Amended and Restated Loan Agreement, dated as of March 15,
2007, between VNB New York Corp. as assignee of Valley National Bank,
Merchants Bank Division, Bank Leumi, USA, Manufacturers and Traders Trust
Company, Israel Discount Bank of New York, and One Liberty Properties,
Inc. (incorporated by reference to Exhibit 10.1 to One Liberty Properties,
Inc.’s Current Report on Form 8-K filed on March 15,
2007).
|
10.3
|
Second
Amendment to Amended and Restated Loan Agreement effective as of September
30, 2007, between VNB New York Corp., as assignee, of Valley National
Bank, Merchants Bank Division, Bank Leumi USA, Israel Discount Bank of New
York, Manufacturers and Traders Trust Company and One Liberty Properties,
Inc. (incorporated by reference to Exhibit 10.3 to One Liberty Properties,
Inc.’s Annual Report on Form 10-K filed on March 13,
2008).
|
10.4
|
Compensation
and Services and Agreement effective as of January 1, 2007 between
One Liberty Properties Inc. and Majestic Property
Management Corp. (incorporated by reference to One Liberty
Properties Inc.’s Current Report on Form 8-K filed March 14,
2007).
|
23.1
|
Consent
of Sonnenschein Nath & Rosenthal LLP (to be included in its opinion
filed as Exhibits 5.1 and 8.1 hereto).
*
|
23.2
|
Consent
of Ernst & Young LLP, independent registered public accountants.
*
|
24.1
|
Powers
of Attorney. **
|
* Filed
herewith.
** Previously filed with this Registration Statement on March 26,
2009.