UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

          [X] Quarterly Report Pursuant to Section 13 or 15(d) of the
                   Securities Exchange Act of 1934

                For the quarterly period ended September 30, 2006

                                       OR

          [ ] Transition Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                        Commission File Number 001-09279

                          ONE LIBERTY PROPERTIES, INC.
                          ----------------------------
             (Exact name of registrant as specified in its charter)

            MARYLAND                                       13-3147497
            --------------------------------------------------------------
            (State or other jurisdiction of            (I.R.S. employer
             incorporation or organization)          identification number)

           60 Cutter Mill Road, Great Neck, New York               11021
           ---------------------------------------------------------------
           (Address of principal executive offices)             (Zip code)

                                 (516) 466-3100
                                 --------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                  Yes X    No
                                     ---
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Large Accelerated Filer    Accelerated Filer  X  Non-Accelerated Filer
                       ---                   ---                       ---

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
                                  Yes   No X
                                          ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

As of November 6, 2006, the registrant had 9,963,550 shares of common stock
outstanding.



<PAGE>


Part I - FINANCIAL INFORMATION

Item 1    Financial Statements

<TABLE>
<CAPTION>

                  ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                  (Amounts in Thousands, Except Per Share Data)


                                                                                 September 30,        December 31,
                                                                                      2006                2005
                                                                                 -------------        ------------
                                                                                  (Unaudited)
<S>                                                                                  <C>                <C>

Assets
Real estate investments, at cost
   Land                                                                              $ 62,869           $ 51,516
   Buildings and improvements                                                         269,924            216,921
                                                                                     --------           --------
                                                                                      332,793            268,437
           Less accumulated depreciation                                               26,425             21,508
                                                                                     --------           --------
                                                                                      306,368            246,929

   Investment in unconsolidated joint ventures                                         27,600             27,335
   Cash and cash equivalents                                                            7,508             26,749
   Unbilled rent receivable                                                             7,922              6,613
   Property held for sale                                                              11,097             11,193
   Escrow, deposits and other receivables                                               2,223              4,027
   Investment in BRT Realty Trust (related party)                                         853                717
   Deferred financing costs                                                             2,925              2,822
   Other assets (including available-for-sale securities
       at market of $996 and $163)                                                      1,760                744
   Unamortized intangible lease assets                                                  4,549              3,454
                                                                                     --------           --------

           Total assets                                                              $372,805           $330,583
                                                                                     ========           ========

Liabilities and Stockholders' Equity
   Liabilities:
        Mortgages payable                                                            $196,936           $167,472
        Line of credit                                                                  4,000                  -
        Dividends payable                                                               3,281              3,255
        Accrued expenses and other liabilities                                          3,780              3,554
        Unamortized intangible lease liabilities                                        6,010                783
                                                                                     --------           --------

           Total liabilities                                                          214,007            175,064
                                                                                     --------           --------

Commitments and contingencies                                                               -                  -

Stockholders' equity:
        Preferred stock, $1 par value;
           12,500 shares authorized; none issued                                            -                  -
        Common stock, $1 par value; 25,000 shares
           authorized; 9,802 and 9,770 shares
           issued and outstanding                                                       9,802              9,770
        Paid-in capital                                                               134,281            134,645
        Accumulated other comprehensive income - net
           unrealized gain on available-for-sale securities                             1,015                818
        Unearned compensation                                                               -             (1,250)
        Accumulated undistributed net income                                           13,700             11,536
                                                                                     --------           --------

           Total stockholders' equity                                                 158,798            155,519
                                                                                     --------           --------

           Total liabilities and stockholders' equity                                $372,805           $330,583
                                                                                     ========           ========


       See accompanying notes to consolidated financial statements.


</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                  ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                  (Amounts in Thousands, Except Per Share Data)
                                   (Unaudited)


                                                                       Three Months Ended             Nine Months Ended
                                                                          September 30,                  September 30,
                                                                          -------------                  -------------
                                                                      2006            2005            2006           2005
                                                                      ----            ----            ----           ----
<S>                                                                 <C>              <C>            <C>             <C>

Revenues:
   Rental income                                                    $ 8,615          $ 6,804        $24,459        $19,990
                                                                    -------          -------        -------        -------

Operating expenses:
   Depreciation and amortization                                      1,822            1,345          5,086          3,945
   General and administrative (including $325,
      $315, $1,072 and $935, respectively, to
      related party)                                                  1,484            1,347          4,171          3,199
   Real estate expenses                                                  66              103            201            277
   Leasehold rent                                                        77               77            231            231
                                                                   --------         --------       --------       --------
      Total operating expenses                                        3,449            2,872          9,689          7,652
                                                                   --------         --------       --------       --------

Operating income                                                      5,166            3,932         14,770         12,338

Other income and expenses:
   Equity in earnings (loss) of unconsolidated
       joint ventures                                                   246             (524)         1,924          1,327
   Gain on disposition of real estate related
       to unconsolidated joint venture                                3,294                -          3,294              -
   Interest and other income                                             43              150            303            229
   Interest:
      Expense                                                        (3,247)          (2,398)        (9,154)        (7,208)
      Amortization of deferred financing costs                         (153)            (134)          (443)          (416)
   Gain on sale of air rights in 2005 and other                         185                -            412         10,248
                                                                   --------         --------       --------       --------

Income from continuing operations                                     5,534            1,026         11,106         16,518
                                                                   --------         --------       --------       --------

Discontinued operations:
   Income (loss) from operations                                        201               72            891             (3)
   Net gain on sale                                                       -              631              -          1,221
                                                                   --------         --------       --------       --------
Income from discontinued operations                                     201              703            891          1,218
                                                                   --------         --------       --------       --------

Net income                                                         $  5,735         $  1,729       $ 11,997       $ 17,736
                                                                   ========         ========       ========       ========

Weighted average number of common shares outstanding:
      Basic                                                           9,937            9,852          9,921          9,830
                                                                      =====            =====          =====          =====
      Diluted                                                         9,940            9,857          9,924          9,835
                                                                      =====            =====          =====          =====

Net income per common share - basic and diluted:
      Income from continuing operations                            $    .56         $    .11       $   1.12       $   1.68
      Income from discontinued operations                               .02              .07            .09            .12
                                                                   --------         --------       --------       --------
      Net income per common share                                  $    .58         $    .18       $   1.21       $   1.80
                                                                   ========         ========       ========       ========

Cash distributions per share of common stock                       $    .33         $    .33       $    .99       $    .99
                                                                   ========         ========       ========       ========

    See accompanying notes to consolidated financial statements.

</TABLE>


<PAGE>


<TABLE>
<CAPTION>


                  ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

         For the nine month period ended September 30, 2006 (Unaudited)
                      and the year ended December 31, 2005
                             (Amounts in Thousands)


                                                                       Accumulated
                                                                          Other           Unearned     Accumulated
                                             Common        Paid-in    Comprehensive       Compen-     Undistributed
                                              Stock        Capital       Income           sation       Net Income       Total
                                              -----        -------       ------           ------       ----------       -----
<S>                                          <C>          <C>            <C>            <C>             <C>            <C>

Balances, January 1, 2005                    $ 9,728      $133,350       $    717       $   (926)       $  3,246       $146,115

Distributions -
   common stock                                    -             -              -              -         (12,990)       (12,990)
Exercise of options                               11           109              -              -               -            120
Shares issued through
   dividend reinvestment plan                     31           569              -              -               -            600
Issuance of restricted stock                       -           617              -           (617)              -              -
Compensation expense -
   restricted stock                                -             -              -            293               -            293
     Net income                                    -             -              -              -          21,280         21,280
     Other comprehensive income-
        net unrealized gain on
        available-for-sale securities              -             -            101              -               -            101
                                                                                                                        -------
Comprehensive income                                                                                                     21,381
                                            --------      --------      ---------       --------        --------        -------

Balances, December 31, 2005                    9,770       134,645            818         (1,250)         11,536        155,519

Reclassification upon the adoption
   of FASB No. 123 (R)                             -        (1,250)             -          1,250               -              -
Distributions -
   common stock                                    -             -              -              -          (9,833)        (9,833)
Exercise of options                                9           101              -              -               -            110
Shares issued through
   dividend reinvestment plan                     23           407              -              -               -            430
Compensation expense -
   restricted stock                                -           378              -              -               -            378
     Net income                                    -             -              -              -          11,997         11,997
     Other comprehensive income-
        net unrealized gain on
        available-for-sale securities              -             -            197              -               -            197
                                                                                                                       ---------
Comprehensive income                                                                                                     12,194
                                            --------      --------       --------      ---------        --------       ---------

Balances, September 30, 2006                $  9,802      $134,281       $  1,015      $       -        $ 13,700       $158,798
                                            ========      ========       ========      =========        ========       ========



        See accompanying notes to consolidated financial statements.

</TABLE>



<PAGE>

<TABLE>
<CAPTION>


                  ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in Thousands)
                                   (Unaudited)

                                                                                                            Nine Months Ended
                                                                                                              September 30,
                                                                                                              -------------
                                                                                                        2006                2005
                                                                                                        ----                ----
<S>                                                                                                  <C>                 <C>

Cash flows from operating activities:
   Net income                                                                                        $ 11,997            $ 17,736
   Adjustments to reconcile net income
     to net cash provided by operating activities:
   Gain on sale                                                                                          (412)            (11,469)
   Increase in rental income from straight-lining of rent                                              (1,309)               (901)
   (Increase) decrease in rental income from amortization of
     intangibles relating to leases                                                                      (120)                 18
   Gain on disposition of real estate related to unconsolidated joint venture                          (3,294)                  -
   Provision for valuation adjustment                                                                       -                 469
   Amortization of restricted stock expense                                                               378                 205
   Equity in earnings of unconsolidated joint ventures                                                 (1,924)             (1,327)
   Distributions of earnings from unconsolidated joint ventures                                         5,115               2,329
   Depreciation and amortization                                                                        5,182               4,361
   Amortization of financing costs                                                                        448                 448
   Changes in assets and liabilities:
   (Increase) decrease in escrow, deposits and other receivables                                         (903)                322
   Increase in accrued expenses and other liabilities                                                     304                 540
                                                                                                     --------            --------
           Net cash provided by operating activities                                                   15,462              12,731
                                                                                                     --------            --------

Cash flows from investing activities:
   Purchase of real estate and improvements                                                           (31,659)            (55,715)
   Net proceeds from sale of real estate                                                                  974              27,797
   Investment in unconsolidated joint ventures                                                         (1,553)               (282)
   Distributions of return of capital from unconsolidated
     joint ventures                                                                                     1,322               9,018
   Net proceeds from sale of option to purchase property                                                  227                   -
   Net proceeds from sale of available-for-sale securities                                                 11                   4
   Purchase of available-for-sale securities                                                             (714)                  -
                                                                                                     --------            --------
           Net cash (used in) investing activities                                                    (31,392)            (19,178)
                                                                                                     --------            --------

Cash flows from financing activities:
   Repayment of mortgages payable                                                                      (3,058)            (13,680)
   Proceeds from mortgages payable                                                                      5,565              32,156
   Payment of financing costs                                                                            (551)               (664)
   Proceeds from bank line of credit, net                                                               4,000                 400
   Cash distributions - common stock                                                                   (9,807)             (9,715)
   Exercise of stock options                                                                              110                 120
   Issuance of shares through dividend reinvestment plan                                                  430                 411
                                                                                                     --------            --------
           Net cash (used in) provided by financing activities                                         (3,311)              9,028
                                                                                                     --------            --------

           Net (decrease) increase in cash and cash equivalents                                       (19,241)              2,581

Cash and cash equivalents at beginning of period                                                       26,749               6,051
                                                                                                     --------            --------

Cash and cash equivalents at end of period                                                           $  7,508            $  8,632
                                                                                                     ========            ========

Supplemental disclosures of cash flow information:
   Cash paid during the period for interest                                                          $  9,540            $  7,511
                                                                                                     ========            ========

Supplemental schedule of non-cash investing and financing activities:
   Assumption of mortgage payable in connection
     with purchase of real estate                                                                    $ 26,957            $      -
                                                                                                     ========            ========
   Purchase accounting allocations                                                                   $  4,082            $  1,717
                                                                                                     ========            ========
   Reclassification of 2005 deposit in connection with
     purchase of real estate                                                                         $  2,525            $      -
                                                                                                     ========            ========

          See accompanying notes to consolidated financial statements.

</TABLE>

<PAGE>


                  One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 1 - Organization and Background

One Liberty Properties, Inc. (the "Company") was incorporated in 1982 in the
state of Maryland. The Company is a self-administered and self-managed real
estate investment trust ("REIT"). The Company acquires, owns and manages a
geographically diversified portfolio of retail, industrial, office, flex, health
and fitness and other properties, a substantial portion of which are under
long-term net leases. As of September 30, 2006, the Company owns fifty-seven
properties, holds a 50% tenancy in common interest in one property and
participates in seven joint ventures which own a total of fourteen properties.
The seventy-two properties are located in twenty-six states. On October 5, 2006,
the Company sold one property and two of its joint ventures sold eight
properties. (See Note 4.)

Note 2 - Basis of Preparation

The accompanying interim unaudited consolidated financial statements as of
September 30, 2006 and for the nine and three months ended September 30, 2006
and 2005 reflect all normal recurring adjustments which are, in the opinion of
management, necessary for a fair presentation of the results for such interim
periods. The results of operations for the nine and three months ended September
30, 2006 are not necessarily indicative of the results for the full year.

The preparation of the financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

The consolidated financial statements include the accounts and operations of One
Liberty Properties, Inc. and its wholly-owned subsidiaries (collectively, the
"Company"). With respect to its unconsolidated joint ventures, as the Company
(1) is primarily the managing member but does not exercise substantial operating
control over these entities pursuant to EITF 04-05, and (2) such entities are
not variable-interest entities pursuant to FASB Interpretation No. 46R,
"Consolidation of Variable Interest Entities", it has determined that such joint
ventures should be accounted for under the equity method of accounting for
financial statement purposes. Material intercompany items and transactions have
been eliminated.

Certain amounts reported in previous consolidated financial statements have been
reclassified in the accompanying consolidated financial statements to conform to
the current year's presentation.

The Company accounts for its property acquisitions in accordance with SFAS 141
and 142 and is currently in the process of analyzing the fair value of the
in-place leases of its current year's acquisitions. Therefore, the purchase
price allocations are preliminary and subject to change.

These statements should be read in conjunction with the consolidated financial
statements and related notes which are included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2005.


<PAGE>


                  One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

Note 3 - Earnings Per Common Share

For the nine and three months ended September 30, 2006 and 2005, basic earnings
per share were determined by dividing net income for the period by the weighted
average number of shares of the Company's Common Stock outstanding, which
includes unvested restricted stock during each period.

Diluted earnings per share reflect the potential dilution that could occur if
securities or other contracts exercisable for, or convertible into, Common Stock
were exercised or converted or resulted in the issuance of Common Stock that
shared in the earnings of the Company. For the nine and three months ended
September 30, 2006 and 2005, diluted earnings per share were determined by
dividing net income applicable to common stockholders for the period by the
total of the weighted average number of shares of Common Stock outstanding plus
the dilutive effect of the Company's outstanding options (3,086 and 2,364 for
the nine and three months ended September 30, 2006, respectively, and 5,227 and
4,488 for the nine and three months ended September 30, 2005, respectively)
using the treasury stock method.

Note 4 - Subsequent Event/Properties Held For Sale

On October 5, 2006, the Company sold one movie theater property and two of the
Company's joint ventures sold eight movie theater properties to a single
unrelated purchaser for an aggregate consideration of $151,885,000, of which
$136,658,000 is attributable to the eight properties owned by the joint ventures
(in which the Company is a 50% equity participant) and $15,227,000 to the
property owned by the Company.

The Company estimates that the joint ventures realized a gain, for book
purposes, after expenses, fees and brokerage commissions, of approximately
$49,000,000 (of which 50%, or approximately $24,500,000, is attributable to the
Company). The Company estimates that it also realized a gain, for book purposes,
after expenses, fees and brokerage commissions, of approximately $3,660,000 on
the sale of the one movie theater property sold by the Company. The joint
ventures paid a prepayment premium of $9,683,000 (of which 50%, or approximately
$4,842,000, is attributable to the Company) on the outstanding mortgage loans
secured by the properties which were sold. The prepayment premium expense will
be deducted from equity in earnings of unconsolidated joint ventures for
financial reporting purposes and is not reflected as an expense or fees in
calculating the gains reported above. These gains and expenses will be
recognized in the three months and year ended December 31, 2006.

The Company anticipates that it will defer the taxable gain of approximately
$3,800,000 on the one property sold by its wholly-owned subsidiary through a tax
deferred exchange under Section 1031 of the Internal Revenue Code using the
sales proceeds of approximately $15,227,000 to acquire one or more replacement
properties. Therefore, the Company anticipates it will not realize a gain on the
sale of this one property for federal tax purposes.

In connection with the sale of the nine movie theater properties (eight by the
joint ventures and one by the Company), a brokerage commission totaling
$1,519,000 will be paid to Majestic Property Management Corp. (a company
wholly-owned by the Company's Chairman of the Board and Chief Executive Officer
and in which certain of the Company's officers are officers and from which such
officers are paid fees). The joint ventures are paying $1,367,000 of this
commission (of which 50% of which will be borne by the Company and 50% by the
joint venture partner) and the Company is paying $152,000 of this commission.
The commission is included as an expense in calculating the gain described
above.

<PAGE>

                  One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

Note 5 - Investment in Unconsolidated Joint Ventures

The Company is a member in seven unconsolidated joint ventures which own and
operate fourteen properties. See Note 4 for information regarding the October
2006 sale of eight of these properties. The following tables present unaudited
condensed financial statements of the two most significant joint ventures. The
Company is the managing member of both joint ventures, which are between the
Company and MTC Investors LLC, an unrelated party, and own movie theater
properties.

<TABLE>
<CAPTION>

                              Joint Venture #1 (A)
                              --------------------
                             (Amounts in Thousands)

Condensed Balance Sheets                                                 September 30,         December 31,
------------------------                                                 -------------         ------------
                                                                              2006                 2005
                                                                             -----                 ----
<S>                                                                         <C>                  <C>

Cash and cash equivalents                                                   $    317             $    368
Properties held for sale                                                      52,912               53,384
Deferred financing costs                                                         405                  458
Unbilled rent receivable                                                       1,559                1,390
Other assets                                                                       5                    3
                                                                            --------             --------
Total assets                                                                $ 55,198             $ 55,603
                                                                            ========             ========

Mortgage loans payable                                                      $ 31,013             $ 31,720
Other liabilities                                                                273                  337
Equity                                                                        23,912               23,546
                                                                            --------             --------
Total liabilities and equity                                                $ 55,198             $ 55,603
                                                                            ========             ========

Company's equity investment (B)                                             $ 12,873             $ 12,706
                                                                            ========             ========

                                                                   Three Months Ended               Nine Months Ended
                                                                      September 30,                   September 30,
                                                                      -------------                   -------------
Condensed Statements of Operations                                2006              2005          2006             2005
----------------------------------                                ----              ----          ----             ----
Rental income                                                    $ 1,838          $ 1,838        $ 5,515         $ 5,513
                                                                 -------          -------        -------         -------

Depreciation and amortization                                          -              289            481             866
Operating expenses                                                   146               74            350             223
                                                                 -------          -------        -------         -------
Total operating expenses                                             146              363            831           1,089
                                                                 -------          -------        -------         -------

Operating income                                                   1,692            1,475          4,684           4,424

Other income and expenses:
    Interest income                                                    -                -              -               3
    Interest:
      Expense                                                       (609)            (627)        (1,839)         (1,893)
Amortization of deferred financing costs                             (17)             (17)           (52)            (52)
                                                                 -------          -------        -------         -------

Net income attributable to members                               $ 1,066          $   831        $ 2,793         $ 2,482
                                                                 =======          =======        =======         =======

Company's share of net income                                    $   533          $   415        $ 1,396         $ 1,241
                                                                 =======          =======        =======         =======

Amount recorded in income statement (B)                          $   528          $   411        $ 1,381         $ 1,226
                                                                 =======          =======        =======         =======
Distributions received by the Company:
    From operations                                              $   369          $   412        $ 1,209         $ 1,235
                                                                 =======          =======        =======         =======
    From capital                                                 $     -          $    15        $     4         $    15
                                                                 =======          =======        =======         =======
</TABLE>

(A)      On October 5, 2006, the five movie theaters owned by this joint
         venture, constituting all of the real estate assets of this venture
         were sold. See Note 4 for details. For comparison purposes, these
         assets have been reclassified to "Properties held for sale" at December
         31, 2005.
<PAGE>
                  One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

Note 5 - Investment in Unconsolidated Joint Ventures (Continued)

(B)      The difference between the carrying amount of the Company's investment
         in Joint Venture # 1 and the underlying equity in net assets is a
         premium amortized as an adjustment to equity in earnings of
         unconsolidated joint ventures over 40 years.
<TABLE>
<CAPTION>
                              Joint Venture #2 (A)
                              --------------------
                             (Amounts in Thousands)

Condensed Balance Sheets                                                    September 30,         December 31,
------------------------                                                    -------------         ------------
                                                                                 2006                 2005
                                                                                -----                 ----
<S>                                                                           <C>                    <C>

Cash and cash equivalents                                                     $    826               $    927
Real estate investments, net (B)                                                     -                  8,652
Properties held for sale                                                        29,117                 29,977
Deferred financing costs                                                           302                    419
Unbilled rent receivable                                                         1,338                  1,136
Deposit                                                                          1,305                      -
Other assets, primarily investment in AIX stock (C)                                235                    432
                                                                              --------               --------
Total assets                                                                  $ 33,123               $ 41,543
                                                                              ========               ========

Mortgage loans payable                                                        $ 19,939               $ 25,514
Other liabilities                                                                  228                    559
Equity                                                                          12,956                 15,470
                                                                              --------               --------
Total liabilities and equity                                                  $ 33,123               $ 41,543
                                                                              ========               ========

Company's equity investment                                                   $  6,379               $  7,632
                                                                              ========               ========
</TABLE>

<TABLE>
<CAPTION>

                                                                    Three Months Ended               Nine Months Ended
                                                                       September 30,                   September 30,
                                                                       -------------                   -------------
Condensed Statements of Operations                                 2006            2005            2006             2005
----------------------------------                                 ----            ----            ----             ----
<S>                                                              <C>              <C>             <C>             <C>

Rental income                                                    $ 1,151          $ 1,203         $ 3,568         $ 4,206
                                                                 -------          -------         -------         -------

Depreciation and amortization                                          -              203             337             608
Operating expenses                                                    44               37              84             144
Provision for valuation adjustment of real estate                    600            2,562             600           2,562
                                                                 -------          -------         -------         -------
Total operating expenses                                             644            2,802           1,021           3,314
                                                                 -------          -------         -------         -------

Operating income (loss)                                              507           (1,599)         2,547              892

Other income and expenses:
    Interest income                                                    9                -              9                -
    Interest:
      Expense                                                       (466)            (498)        (1,439)          (1,494)
      Mortgage prepayment premium and fees (B)                      (831)               -           (831)               -
      Amortization of deferred financing costs                        (7)              (8)           (24)             (24)
    Gain on sale of Brooklyn property (B)                          6,588                -          6,588                -
    Gain on sale of AIX stock (C)                                      -                -            166                -
                                                                 -------          -------        -------          -------

Net income (loss) attributable to members                        $ 5,800          $(2,105)       $ 7,016          $  (626)
                                                                 =======          =======        =======          =======

Company's share of net income (loss)                             $ 2,900          $(1,052)       $ 3,508          $  (313)
                                                                 =======          =======        =======          =======
Distributions received by the Company:
    From operations                                              $ 3,075          $     -        $ 3,545          $   629
                                                                 =======          =======        =======          =======
    From capital                                                 $ 1,147          $   235        $ 1,147          $   235
                                                                 =======          =======        =======          =======

</TABLE>

<PAGE>

                  One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)


Note 5 - Investment in Unconsolidated Joint Ventures (Continued)

(A)     On October 5, 2006, the joint venture sold its three remaining movie
        theater properties. See Note 4 for details. For comparison purposes,
        these assets have been reclassified to "Properties held for sale" at
        December 31, 2005. The remaining real estate asset of this venture is a
        vacant parcel of land that is being offered for sale. This property has
        a nominal net book value after provisions for valuation adjustment of
        $600 and $2,562 taken as direct write downs during the three months
        ended September 30, 2006 and 2005, respectively.

(B)     On September 13, 2006, the joint venture sold a movie theater property
        located in Brooklyn, New York to an unrelated party for a consideration
        of $16,000 and realized a gain of $6,588. In connection with the
        prepayment of the mortgage loan secured by this property, the joint
        venture paid a premium of $831.

(C)     The joint venture owned 40,000 restricted shares of Class A common stock
        of Access Integrated Technologies, Inc. (NASDAQ:AIXD), the parent
        company of a former tenant of the joint venture. In April 2006, the
        joint venture sold 20,000 shares of the AIXD stock and realized a gain
        on sale of $166.

The remaining five unconsolidated joint ventures, each of which owns one
property, include one recently organized joint venture. At September 30, 2006
and December 31, 2005, the Company's equity investment in these five joint
ventures totaled $8,348,000 and $6,997,000, respectively. These unconsolidated
joint ventures contributed $329,000 and $112,000, respectively, in equity
earnings for the nine and three months ended September 30, 2006 and $414,000 and
$117,000, respectively, in equity earnings for the nine and three months ended
September 30, 2005.


Note 6 - Gain on Sale of Land and Option to Purchase Property

During July 2006, the Company sold excess acreage to an unrelated party at a
property owned by the Company for a sales price of $975,000 and realized a gain
on sale of $185,000.

During February, 2006, the Company sold an option it owned to buy an interest in
certain property adjacent to one of the Company's properties and realized a gain
on sale of $227,000.


Note 7 - Discontinued Operations

The following is a summary of income from discontinued operations, for the nine
and three months ended September 30, 2006 and 2005 applicable to the property
held for sale at September 30, 2006 (see Note 4) and to the five properties sold
in the year ended December 31, 2005: (Amounts in thousands.)



<PAGE>



                  One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

<TABLE>
<CAPTION>

Note 7 - Discontinued Operations (Continued)

                                                              Three Months Ended            Nine Months Ended
                                                                 September 30,                September 30,
                                                                 -------------                -------------
                                                              2006         2005            2006           2005
                                                              ----         ----            ----           ----

<S>                                                          <C>          <C>            <C>            <C>

Rental income                                                $    345     $    434       $    952       $  1,910
Other income                                                        -            -            400              5
                                                             --------     --------       --------       --------
    Total revenues                                                345          434          1,352          1,915
                                                             --------     --------       --------       --------

Depreciation and amortization                                       -           97             97            415
Real estate expenses                                               38          157             44            589
Interest expense                                                  106          108            320            445
Provision for valuation adjustment of real estate                   -            -              -            469
                                                             --------     --------       --------       --------
    Total expenses                                                144          362            461          1,918
                                                             --------     --------       --------       --------

Income (loss) from discontinued operations
    before gain on sale                                           201           72            891             (3)

Net gain on sale of discontinued operations                         -          631              -          1,221
                                                             --------     --------       --------       --------

Income from discontinued operations                          $    201     $    703       $    891       $  1,218
                                                             ========     ========       ========       ========

</TABLE>

Real estate investment, net of accumulated depreciation, and mortgage payable
for the property held for sale at September 30, 2006 (see Note 4) was
$11,097,000 and $6,682,000, respectively, and $11,193,000 and $6,783,000,
respectively, at December 31, 2005.

Note 8 - Common Stock Dividend Distribution

On September 13, 2006, the Board of Directors declared a quarterly cash
distribution of $.33 per share, totaling $3,281,000, on the Company's Common
Stock which was paid on October 3, 2006 to stockholders of record on September
26, 2006.

Note 9 - Comprehensive Income

<TABLE>
<CAPTION>

Comprehensive income for the nine and three months ended September 30, 2006 and
2005 are as follows (amounts in thousands):
                                                             Three Months Ended            Nine Months Ended
                                                                 September 30,               September 30,
                                                                 -------------               -------------
                                                               2006         2005          2006           2005
                                                               ----         ----          ----           ----
<S>                                                          <C>         <C>            <C>            <C>

Net income                                                   $ 5,735     $ 1,729        $11,997        $17,736
Other comprehensive income -
    Unrealized gain on
    available-for-sale securities                                182          23            197             89
                                                             -------     -------        -------        -------
Comprehensive income                                         $ 5,917     $ 1,752        $12,194        $17,825
                                                             =======     =======        =======        =======

</TABLE>

Accumulated other comprehensive income, which is solely comprised of the net
unrealized gain on available-for-sale securities was $1,015,000 and $818,000 at
September 30, 2006 and December 31, 2005, respectively.


<PAGE>

                  One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

Note 10 - Restricted Stock

The Company adopted the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 123R, "Share-Based Payments", effective January 1, 2006.
SFAS No. 123R established financial accounting and reporting standards for
stock-based employee compensation plans, including all arrangements by which
employees receive shares of stock or other equity instruments of the employer,
or the employer incurs liabilities to employees in amounts based on the price of
the employer's stock. The statement also defined a fair value based method of
accounting for an employee stock option or similar equity instrument. The
implementation of the statement has not had a material effect on the
consolidated financial statements.

The Company's 2003 Stock Incentive Plan (the "Incentive Plan") provides for the
granting of restricted shares. The maximum number of shares of the Company's
common stock that may be issued pursuant to the Incentive Plan is 275,000. The
restricted stock grants are valued at the fair value as of the date of grant and
specify vesting upon the fifth anniversary of the date of grant. The value of
such grants are initially deferred, and amortization of amounts deferred is
being charged to operations over the respective vesting periods.


<TABLE>
<CAPTION>

                                                         Three Months Ended                Nine Months Ended
                                                            September 30,                     September 30,
                                                            -------------                     -------------
                                                        2006             2005             2006             2005
                                                        ----             ----             ----             ----
<S>                                                   <C>              <C>            <C>               <C>

Restricted share grants                                      -                -           50,000            41,000
Average per share grant price                         $      -         $      -       $    20.66        $    19.05
Recorded as deferred compensation                     $      -         $      -       $1,034,000        $  776,000
Total charge to operations                            $136,000         $ 57,000       $  378,000        $  205,000

Non-vested shares:
    Non-vested beginning of period                     142,000           93,000           93,000            60,000
    Grants                                                   -                -           50,000            41,000
    Vested during period                                     -                -                -                 -
    Forfeitures                                         (1,000)               -           (2,000)           (8,000)
                                                      --------          --------       ---------         ---------
    Non-vested end of period                           141,000            93,000         141,000            93,000
                                                      ========          ========       =========         =========

</TABLE>

At September 30, 2006, approximately 133,000 shares remain available for grants
pursuant to the Incentive Plan, and approximately $1,887,000 remained as
deferred compensation and will be charged to expense over the remaining weighted
average vesting period of approximately 3.3 years.


<PAGE>



                  One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

Note 11 - New Accounting Pronouncements

Emerging Issues Task Force ("EITF") Issue 04-5, "Investor's Accounting for an
Investment in a Limited Partnership when the Investor is the Sole General
Partner and the Limited Partners Have Certain Rights" was ratified by the
Financial Accounting Standards Board (the "FASB") in September 2005. This EITF
provides guidance in determining whether a general partner controls a limited
partnership and what rights held by the limited partners(s) preclude the sole
general partner from consolidating the limited partnership in accordance with
the U.S. generally accepted accounting principles. This EITF covers entities
that are equivalent to limited partnerships, such as limited liability
companies, in which the Company is a managing member. This EITF is effective no
later than fiscal years beginning after December 15, 2005 and as of September
29, 2005 for new or modified arrangements. Management has adopted the EITF issue
and its adoption did not have an effect on earnings or the financial position of
the Company.

In July 2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty
in Income Taxes" ("FIN 48"). This interpretation, among other things, creates a
two step approach for evaluating uncertain tax positions. Recognition (step one)
occurs when an enterprise concludes that a tax position, based solely on its
technical merits, is more-likely-than-not to be sustained upon examination.
Measurement (step two) determines the amount of benefit that
more-likely-than-not will be realized upon settlement. Derecognition of a tax
position that was previously recognized would occur when a company subsequently
determines that a tax position no longer meets the more-likely-than-not
threshold of being sustained. FIN 48 specifically prohibits the use of a
valuation allowance as a substitute for derecognition of tax positions, and it
has expanded disclosure requirements. FIN 48 is effective for fiscal years
beginning after December 15, 2006, in which the impact of adoption should be
accounted for as a cumulative-effect adjustment to the beginning balance of
retained earnings. The Company is evaluating FIN 48 and has not yet determined
the impact the adoption will have on the consolidated financial statements, but
it is not expected to be significant.

In September 2006, the FASB issued Statement No. 157, "Fair Value Measurements"
("SFAS No. 157"). SFAS No. 157 provides guidance for using fair value to measure
assets and liabilities. This statement clarifies the principle that fair value
should be based on the assumptions that market participants would use when
pricing the asset or liability. SFAS No.157 establishes a fair value hierarchy,
giving the highest priority to quoted prices in active markets and the lowest
priority to unobservable data. SFAS No. 157 applies whenever other standards
require assets or liabilities to be measured at fair value. This statement is
effective in fiscal years beginning after November 15, 2007. The Company
believes that the adoption of this standard on January 1, 2008 will not have a
material effect on the Company's consolidated financial statements.

In September 2006, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 108 ("SAB 108"), which becomes effective beginning on
January 1, 2007. SAB 108 provides guidance on the consideration of the effects
of prior period misstatements in quantifying current year misstatements for the
purpose of a materiality assessment. SAB108 provides for the quantification of
the impact of correcting all misstatements, including both the carryover and
reversing effects of prior year misstatements, on the current year financial
statements. If a misstatement is material to the current year financial
statements, the prior year financial statements should also be corrected, even
though such revision was, and continues to be, immaterial to the prior year
financial statements. Correcting prior year financial statements for immaterial
errors would not require previously filed reports to be amended. Such correction
should be made in the current period filings. The Company is currently
evaluating the impact of adopting SAB 108.


<PAGE>

                  One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

Note 12 - Legal Matters

In July 2005, Jeffrey Fishman resigned as the Company's president, chief
executive officer and a member of the Company's Board of Directors following
discovery of what appeared to be inappropriate financial dealings by Mr. Fishman
with the former tenant of a movie theater property located in Brooklyn, NY,
owned by a joint venture in which the Company is a 50% venture partner and the
managing member. The Company had reported this matter to the Securities and
Exchange Commission in July 2005. The Audit Committee of the Company's Board of
Directors conducted an investigation of this matter and related matters and
retained special counsel to assist the committee in the investigation. This
investigation was completed and the Audit Committee and its special counsel,
based on the materials gathered and interviews conducted, found no evidence that
any other officer or employee of the Company was aware of, or knowingly assisted
in Mr. Fishman's inappropriate financial dealings.

On June 21, 2006 the Company announced that it had received notification of a
formal order of investigation from the SEC. Management believes that the matters
being investigated by the SEC focus on the improper payments received by Mr.
Fishman. The SEC has also requested information regarding "related party"
transactions between the Company and entities affiliated with it and with
certain of the Company's officers and directors and compensation paid to certain
of the Company's executive officers by those affiliates. The SEC and the
Company's Audit Committee (and its counsel) are conducting concurrent
investigations concerning these issues. The Company's direct legal expenses
related to these investigations totaled $682,000 and $360,000, respectively, in
the nine and three months ended September 30, 2006 and $467,000 in the nine and
three months ended September 30, 2005.

Note 13 - Pro Forma Information

On April 7, 2006, the Company acquired eleven retail furniture stores, located
in six states, leased to a single tenant. The properties were acquired for a
purchase price of approximately $51,200,000, with approximately $22,250,000 paid
in cash, $2,000,000 borrowed under the Company's line of credit and the
remainder through the assumption of a mortgage of approximately $26,950,000. The
basic term of the net lease expires August 14, 2022, with several renewal
options. As a result of its evaluation under SFAS 141and 142 of this
acquisition, the Company recorded a deferred asset of $843,000, representing
assumed lease origination costs and it also recorded a deferred liability of
$5,112,000 representing the net value of the acquired below market lease. These
deferred amounts will be written off over the lease term and the Company will
recognize additional rental income from the amortization of the deferred
liability and additional amortization expense relating to the amortization of
the deferred lease origination costs.

The following table summarizes, on a pro forma basis, the combined results of
continuing operations of the Company for the nine and three months ended
September 30, 2006 and 2005 as though the acquisition of the properties in April
2006 was completed on January 1, 2005. The information does not purport to be
indicative of what the operating results of the Company would have been had the
acquisition been consummated on January 1, 2005. (Amounts in thousands, except
per share data.)




<PAGE>


                  One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)


Note 13 - Pro Forma Information (Continued)

<TABLE>
<CAPTION>


                                                             Three Months Ended             Nine Months Ended
                                                                September 30,                 September 30,
                                                                -------------                 -------------
                                                            2006             2005           2006         2005
                                                            ----             ----           ----         ----
<S>                                                       <C>              <C>            <C>           <C>

Pro forma revenues                                        $ 8,601          $ 8,000        $25,701       $23,581
Pro forma net income from continuing
     operations                                             5,522            1,401         11,464        17,654
Pro forma common shares:
        Basic                                               9,937            9,852          9,921         9,830
        Diluted                                             9,940            9,857          9,924         9,835
Pro forma net income per common
     share from continuing operations -
        Basic                                             $   .56          $   .14        $  1.16       $  1.80
        Diluted                                           $   .56          $   .14        $  1.16       $  1.80

</TABLE>


<PAGE>



Item 2.  Management's Discussion And Analysis Of Financial Condition And
         ---------------------------------------------------------------
         Results Of Operations
         ---------------------

Forward-Looking Statements
--------------------------

With the exception of historical information, this quarterly report on Form 10-Q
contains certain forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended. We intend such forward-looking
statements to be covered by the safe harbor provision for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995 and
include this statement for purposes of complying with these safe harbor
provisions. Forward-looking statements, which are based on certain assumptions
and describe our future plans, strategies and expectations, are generally
identifiable by use of the words "may," "will," "believe," "expect," "intend,"
"anticipate," "estimate," "project," or similar expressions or variations
thereof. Forward-looking statements should not be relied on since they involve
known and unknown risks, uncertainties and other factors which are, in some
cases, beyond our control and which could materially affect actual results,
performance or achievements. Investors are cautioned not to place undue reliance
on any forward-looking statements.

Overview
--------

We are a self-administered and self-managed real estate investment trust, or
REIT, and we primarily own real estate that we net lease to tenants. As of
September 30, 2006 we own 57 properties, hold a 50% tenancy in common interest
in one property and participate in seven joint ventures which own a total of 14
properties. These 72 properties are located in 26 states. On October 5, 2006,
the Company sold one property and two of its joint ventures sold eight
properties.

We have elected to be taxed as a REIT under the Internal Revenue Code of 1986,
as amended. To qualify as a REIT, we must meet a number of organizational and
operational requirements, including a requirement that we distribute currently
at least 90% of ordinary taxable income to our stockholders. We intend to comply
with these requirements and to maintain our REIT status.

Our principal business strategy is to acquire improved, commercial properties
subject to long-term net leases. We acquire properties for their value as
long-term investments and for their ability to generate income over an extended
period of time. We have borrowed funds in the past to finance the purchase of
real estate and we expect to do so in the future.

Our rental properties are generally leased to corporate tenants under operating
leases substantially all of which are noncancellable. Substantially all of our
lease agreements are net lease arrangements that require the tenant to pay not
only rent, but also substantially all of the operating expenses of the leased
property, including maintenance, taxes, utilities and insurance. A majority of
our lease agreements provide for periodic rental increases and certain of our
other leases provide for increases based on the consumer price index.

At September 30, 2006, excluding mortgages payable of our unconsolidated joint
ventures, we had 35 outstanding mortgages payable, aggregating approximately
$197 million in principal amount, each of which is secured by a first lien on an
individual real estate property. The real properties securing our outstanding
mortgages payable have an aggregate carrying value of approximately $316
million, adjusted for intangibles, before accumulated depreciation. The
mortgages bear interest at fixed rates ranging from 5.125% to 8.8%, and mature
between 2007 and 2023.

Results of Operations
---------------------

Comparison of Nine and Three Months Ended September 30, 2006 and 2005
---------------------------------------------------------------------

Revenues

Rental income increased by $4.5 million, or 22.4%, to $24.5 million for the nine
months ended September 30, 2006 from $20 million for the nine months ended
September 30, 2005. For the three months ended September 30, 2006, rental income
increased by $1.8 million, or 26.6%, to $8.6 million from $6.8 million for the
three months ended September 30, 2005. The increase in rental income is
primarily due to $4.4 million and $1.4 million of rental revenues earned during
the nine and three months ended September 30, 2006 on twenty-one properties
acquired by us between January 2005 and September 2006.

Operating Expenses

Depreciation and amortization expense increased by $1.1 million, or 28.9%, and
$477,000, or 35.5%, to $5.1 million and $1.8 million for the nine and three
months ended September 30, 2006. The increase in depreciation and amortization
expense was primarily due to the acquisition of twenty-one properties between
January 2005 and September 2006.

General and administrative expenses increased by $972,000, or 30.4%, to $4.2
million for the nine months ended September 30, 2006. For the three months ended
September 30, 2006, general and administrative expenses increased by $137,000,
or 10.2%, to $1.5 million. The increase was due to a number of factors, the
largest of which (totaling $283,000 and $188,000, respectively, for the nine and
three months ended September 30, 2006) relates to payroll and payroll related
expenses resulting primarily from compensation paid to our new president for the
entire current fiscal periods, as well as from staff increases. An increase of
$215,000 and a decrease of $108,000 in the nine and three months ended September
30, 2006, respectively, relates to professional fees incurred in connection with
an investigation by the Securities and Exchange Commission described elsewhere
in this filing (Part II - Other Information - Item I - Legal Proceedings) and
investigations by the Company's Audit Committee. In addition, there was an
increase of $63,000 and a decrease of $30,000 in the nine and three months ended
September 30, 2006, respectively, in legal fees relating to a civil litigation
arising out of the activities of our former president and chief executive
officer. For the nine and three months ended September 30, 2006 expenses
allocated to us under a Shared Services Agreement among us and various
affiliated companies, increased by $138,000 and $10,000, respectively, for
executive and support personnel, primarily for legal and accounting services, a
significant portion of which relates to the SEC and Audit Committee
investigations, as well as property acquisitions and the overall increase in the
level of our business activity. Also included in the nine and three months ended
September 30, 2006 is an increase in compensation expense relating to our
restricted stock program of $173,000 and $79,000, respectively, and an increase
in directors' fees of $48,000 and $2,000, respectively.

Real estate expenses decreased by $76,000, or 27.4%, and $37,000, or 35.9% for
the nine and three months ended September 30, 2006, resulting primarily from
unusual repair items at three properties incurred in the 2005 nine and three
month periods.

Other Income and Expenses

Our equity in earnings of unconsolidated joint ventures increased by $597,000,
or 45%, to $1.9 million for the nine months ended September 30, 2006 and by
$770,000, or 147%, to $246,000 for the three months ended September 30, 2006.
The increase resulted primarily from a $2.56 million provision for valuation
adjustment taken at September 30, 2005 by one of our movie theater joint
ventures against one of its properties, of which 50%, or $1.3 million, was our
share. At September 30, 2006, this joint venture recorded an additional $600,000
provision against this property, of which 50%, or $300,000, is our share. The
increase in earnings of unconsolidated joint ventures also resulted from
decreases of $655,000, of which 50%, or $327,000 is our share and $491,000, of
which $246,000, is our share, in the nine and three months ended September 30,
2006, respectively, in depreciation expense which ceased June 1, 2006 for the
nine theaters which were sold. The increase is also due to a gain of $166,000,
of which our 50% share is $83,000, on the sale of securities during the nine
months ended September 30, 2006. These increases were offset in part by the
payment to one of our joint ventures of rental arrearages totaling $592,000 in
February 2005. We have a 50% interest in this joint venture and the payment
resulted in $296,000 of equity in earnings to us in the nine months ended
September 30, 2005. The increase in the nine months ended September 30, 2006
was also offset by $831,000, of which 50%, or $415,000 is our share, for a
mortgage prepayment premium paid by one of our joint ventures upon the sale of
its Brooklyn movie theater on September 13, 2006. This movie theater property
was sold for a consideration of $16 million and the joint venture realized a
gain of $6.6 million, of which our share is $3.3 million.

Interest and other income increased by $74,000 to $303,000, or 32.3%, and
decreased by $107,000 to $43,000, or 71.3%, for the nine and three months ended
September 30, 2006, respectively. The increase in interest and other income for
the nine months ended September 30, 2006 results from interest earned through
March 2006 on our investment in short-term cash equivalents of the proceeds
received from a mortgage financing completed during December 2005. The decrease
in the three months ended September 30, 2006 is due to less funds being
available for investment.

Interest expense increased by $1.9 million, or 27%, and $849,000, or 35.4%, to
$9.2 million and $3.2 million, respectively, for the nine and three months ended
September 30, 2006. This includes increases of $2.1 million and $857,000,
respectively, on our mortgages payable, principally resulting from mortgages
placed on twenty-two properties between March 2005 and April 2006. This increase
was offset by a decrease of $198,000 and $8,000, respectively, during the nine
and three months ended September 30, 2006 of interest expense related to our
line of credit. The higher expense in the nine months ended September 30, 2005
resulted from borrowings made to facilitate the purchase of several properties.

Amortization of deferred financing costs increased by $27,000, or 6.5%, and
$19,000, or 14.2%, to $443,000 and $153,000 for the nine and three months ended
September 30, 2006. The increase results from the amortization of deferred
mortgage costs during the nine and three months ended September 30, 2006
resulting from mortgages placed on twenty-two properties between March 2005 and
April 2006.

During July 2006, we sold excess acreage to an unrelated party at a property we
own and recognized a gain of $185,000. During February 2006, we sold an option
to buy an interest in certain property adjacent to one of our properties and
recognized a gain of $227,000. In June 2005, we closed on the sale of unused
development or "air rights" relating to our property located in Brooklyn, New
York for a net gain, after closing costs, of approximately $10.25 million.

Discontinued Operations

Discontinued operations decreased by $327,000, or 26.8%, and $502,000, or 71.4%,
to $891,000 and $201,000, respectively, for the nine and three months ended
September 30, 2006. These decreases were primarily due to gains of $1.2 million
and $631,000 realized on the sale of two properties in the 2005 nine and three
month periods, respectively. The gains in 2005 were offset in part by a $469,000
provision for valuation adjustment recorded in 2005 against one of the five
properties sold in the year ended December 31, 2005 (and included in
discontinued operations). The decrease was also offset in part by the receipt in
the nine months ended September 30, 2006 of a $400,000 settlement of a claim
made by us against a title insurance company regarding our purchase of a
property in a prior year. (Sold in 2005.)

Liquidity and Capital Resources
-------------------------------

We had cash and cash equivalents of approximately $7.5 million at September 30,
2006. Our primary sources of liquidity are cash and cash equivalents, our
revolving credit facility and cash generated from operating activities,
including mortgage financings. We have a $62.5 million revolving credit facility
with Valley National Bank, Merchants Bank Division, Bank Leumi USA,
Manufacturers and Traders Trust Company and Israel Discount Bank of New York.
The facility is available to us to pay down existing and maturing mortgages, to
fund the acquisition of properties or to invest in joint ventures. The facility
matures on June 30, 2007. Borrowings under the facility bear interest at the
lower of LIBOR plus 2.5% or the bank's prime rate, and there is an unused
facility fee of one-quarter of 1% per annum. Net proceeds received from the sale
or refinancing of properties are required to be used to repay amounts
outstanding under the facility if proceeds from the facility were used to
purchase or refinance such properties. The $4 million balance at September 30,
2006 was paid in full during October 2006, using a portion of the $37 million
distribution we received from our two movie theater joint ventures upon the sale
of eight of its properties.

We actively engage in seeking additional property acquisitions and we are
involved in various stages of negotiation with respect to the acquisition of
additional properties. We will fund our future real estate acquisitions by using
cash available, including the remainder of the distribution received from our
movie theater joint ventures, cash provided from operations, cash provided from
mortgage financings and funds available under our credit facility.

We had no outstanding contingent commitments, such as guarantees of
indebtedness, or any other contractual cash obligations at September 30, 2006.

Cash Distribution Policy

We have elected to be taxed as a REIT under the Internal Revenue Code of 1986,
as amended. To qualify as a REIT, we must meet a number of organizational and
operational requirements, including a requirement that we distribute currently
at least 90% of our ordinary taxable income to our stockholders. It is our
current intention to comply with these requirements and maintain our REIT
status. As a REIT, we generally will not be subject to corporate federal, state
or local income taxes on taxable income we distribute currently (in accordance
with the Internal Revenue Code and applicable regulations) to our stockholders.
If we fail to qualify as a REIT in any taxable year, we will be subject to
federal, state and local income taxes at regular corporate rates and may not be
able to qualify as a REIT for four subsequent tax years. Even if we qualify as a
REIT for federal taxation purposes, we may be subject to certain state and local
taxes on our income and to federal income and excise taxes on our undistributed
taxable income (i.e., taxable income not distributed in the amounts and in the
time frames prescribed by the Internal Revenue Code and applicable regulations
thereunder).

It is our intention to pay to our stockholders within the time periods
prescribed by the Internal Revenue Code no less than 90% of our annual taxable
income, including gains on the sale of real estate, except where we elect to
defer gains for tax purposes and invest the proceeds in new properties under
applicable rules of the Internal Revenue Code. It will continue to be our policy
to make sufficient cash distributions to stockholders in order for us to
maintain our REIT status under the Internal Revenue Code.

<PAGE>

Item 3. - Quantitative and Qualitative Disclosures About Market Risk
          ----------------------------------------------------------
All of our long-term mortgage debt bears interest at fixed rates and
accordingly, the effect of changes in interest rates would not impact the amount
of interest expense that we incur under these mortgages. Our credit line is a
variable rate facility which is sensitive to interest rates. However, for the
nine months ended September 30, 2006, due to a low average balance outstanding
on the credit line, we do not believe that the effect of changes in interest
rates would materially impact the amount of interest expense incurred.

Item 4. - Controls and Procedures
          -----------------------
As required under Rules 13a-15 (e) and 15d-15 (e) under the Securities Exchange
Act of 1934, as amended, we carried out an evaluation under the supervision and
with the participation of our management, including our Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures as of September 30, 2006 are effective.

There were no changes in our internal control over financial reporting (as
defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) during the
three months ended September 30, 2006 that materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.


<PAGE>

PART II - OTHER INFORMATION

Item 1.         Legal Proceedings
                -----------------

         In July 2005, Jeffrey Fishman resigned as our president, chief
executive officer and a member of our Board of Directors following discovery of
what appeared to be inappropriate financial dealings by Mr. Fishman with the
former tenant of a movie theater property located in Brooklyn, NY, owned by a
joint venture in which we are a 50% venture partner and the managing member. We
had reported this matter to the Securities and Exchange Commission in July 2005.
The Audit Committee of our Board of Directors conducted an investigation of this
matter and related matters and retained special counsel to assist the committee
in the investigation. This investigation was completed and the Audit Committee
and its special counsel, based on the materials gathered and interviews
conducted, found no evidence that any other officer or employee of the Company
was aware of, or knowingly assisted in Mr. Fishman's inappropriate financial
dealings.

         On June 21, 2006 we announced that we had received notification of a
formal order of investigation from the SEC. We believe that the matters being
investigated by the SEC focus on the improper payments received by Mr. Fishman.
The SEC has also requested information regarding "related party" transactions
between the Company and entities affiliated with us and with certain of our
officers and directors and compensation paid to certain of the Company's
executive officers by those affiliates. Both the SEC and the Audit Committee and
its counsel have been conducting concurrent investigations concerning these
issues. The Company and its executive officers have fully cooperated with the
investigations being conducted by the SEC and the Audit Committee and intend to
continue to do so. As of this date, both investigations are on-going. Our direct
legal expenses related to these investigations totaled $682,000 and $360,000,
respectively, in the nine and three months ended September 30, 2006. Our direct
legal expenses related to the investigation by the Audit Committee of our former
president and chief executive officer totaled $560,000 in the year ended
December 31, 2005. These expenses have continued in the current quarter (ended
September 30, 2006) and we cannot at this time estimate the legal expenses we
will incur with respect to these investigations in any future quarter.

         Reference is made to Item 3 of the Company's Annual Report on Form 10-K
for the year ended December 31, 2005 with respect to civil litigations involving
the former tenant of the Brooklyn property, Mr. Fishman and Britannia Management
LLC, on one hand, and the Company and certain of its affiliated entities, on the
other hand. For the nine and three months ended September 30, 2006, the Company
incurred $105,000 and $12,000 in legal expenses related to the civil litigation
and $63,000 for the year ended December 31, 2005. There has been no material
change in the status of either litigation other than as discussed below.  The
litigations have been joined for discovery purposes and the Company amended its
complaint to add additional parties including Mr. Fishman's and Mr. Adie's
spouses. Mr. and Mrs. Fishman each made motions to dismiss which were granted
in part and denied in part. The principal claims of fraud, breach of fiduciary
and commercial bribery remain. In addition, the Court has granted the Company
leave to pursue summary judgment against Mr. Fishman and further set a
preliminary discovery schedule which will not be stayed during the pendency of
the Company's motion. The motions were granted to limit the claims as against
Mrs. Fishman to unjust enrichment for monies she has received from Mr. Adie or
his entities and as against Mr. Fishman to dismiss certain claims including the
RICO claims.

Item 6.    Exhibits
           --------

           Exhibit 31.1    Certification of Chairman of the Board and Chief
                           Executive Officer pursuant to Section 302 of
                           the Sarbanes-Oxley Act of 2002. (Filed with this
                           Form 10-Q.)

           Exhibit 31.2    Certification of President pursuant to Section 302
                           of the Sarbanes-Oxley Act of 2002. (Filed with this
                           Form 10-Q.)

           Exhibit 31.3    Certification of Senior Vice President and Chief
                           Financial Officer pursuant to Section 302 of
                           the Sarbanes-Oxley Act of 2002. (Filed with this
                           Form 10-Q.)

           Exhibit 32.1    Certification of Chairman of the Board and Chief
                           Executive Officer pursuant to Section 906 of
                           the Sarbanes-Oxley Act of 2002. (Filed with this
                           Form 10-Q.)

           Exhibit 32.2    Certification of President pursuant to Section 906
                           of the Sarbanes-Oxley Act of 2002.  (Filed with this
                           Form 10-Q.)

           Exhibit 32.3    Certification of Senior Vice President and Chief
                           Financial Officer pursuant to Section 906 of
                           the Sarbanes-Oxley Act of 2002. (Filed with this
                           Form 10-Q.)

<PAGE>




                          ONE LIBERTY PROPERTIES, INC.


                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                          One Liberty Properties, Inc.
                                  (Registrant)




November 7, 2006                    /s/ Patrick J. Callan, Jr.
----------------                    ---------------------------------
Date                                Patrick J. Callan, Jr.
                                    President
                                    (authorized officer)



November 7, 2006                    /s/ David W. Kalish
----------------                    -------------------------------
Date                                David W. Kalish
                                    Senior Vice President and
                                    Chief Financial Officer
                                    (principal financial officer)


<PAGE>



                                  EXHIBIT 31.1
                                  CERTIFICATION

   I, Fredric H. Gould, Chairman of the Board and Chief Executive Officer of
One Liberty Properties, Inc. certify that:

   1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly
   period ended September 30, 2006 of One Liberty Properties, Inc.

   2. Based on my knowledge, this report does not contain any untrue statement
   of a material fact or omit to state a material fact necessary to make the
   statements made, in light of the circumstances under which such statements
   were made, not misleading with respect to the period covered by this report;

   3. Based on my knowledge, the financial statements, and other financial
   information included in this report, fairly present in all material respects
   the financial condition, results of operations and cash flows of the
   registrant as of, and for, the periods presented in this report;

   4. The registrant's other certifying officers and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
   financial reporting (as defined in Exchange Act Rule 13a-15(f)) for the
   registrant and have:

   a)   Designed such disclosure controls and procedures, or caused such
   disclosure controls and procedures to be designed under our supervision,
   to ensure that material information relating to the registrant,
   including its consolidated subsidiaries, is made known to us by others
   within those entities, particularly during the period in which this
   report is being prepared;

   b) Designed such internal control over financial reporting, or caused such
   internal control over financial reporting to be designed under our
   supervision, to provide reasonable assurance regarding the reliability of
   financial reporting and the preparation of financial statements for external
   purposes in accordance with generally accepted accounting principles;

   c) Evaluated the effectiveness of the registrant's disclosure controls and
   procedures and presented in this report our conclusions about the
   effectiveness of the disclosure controls and procedures, as of the end of the
   period covered by this report based on such evaluation; and

   d) Disclosed in this report any change in the registrant's internal control
   over financial reporting that occurred during the registrant's most recent
   fiscal quarter (the registrant's fourth fiscal quarter in the case of an
   annual report) that has materially affected, or is reasonably likely to
   materially affect, the registrant's internal control over financial
   reporting; and

   5. The registrant's other certifying officers and I have disclosed, based on
   our most recent evaluation of internal control over financial reporting, to
   the registrant's auditors and the audit committee of the registrant's board
   of directors (or persons performing the equivalent functions):

   a) All significant deficiencies and material weaknesses in the design or
   operation of internal control over financial reporting which are
   reasonably likely to adversely affect the registrant's ability to
   record, process, summarize and report financial information; and

   b) Any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal
   control over financial reporting.


   Date:   November 7, 2006
                                      /s/ Fredric H. Gould
                                      --------------------
                                      Fredric H. Gould
                                      Chairman of the Board and
                                      Chief Executive Officer


<PAGE>


                                  EXHIBIT 31.2
                                  CERTIFICATION

   I, Patrick J. Callan, Jr., President of One Liberty Properties, Inc.
certify that:

   1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly
   period ended September 30, 2006 of One Liberty Properties, Inc.

   2. Based on my knowledge, this report does not contain any untrue statement
   of a material fact or omit to state a material fact necessary to make the
   statements made, in light of the circumstances under which such statements
   were made, not misleading with respect to the period covered by this report;

   3. Based on my knowledge, the financial statements, and other financial
   information included in this report, fairly present in all material respects
   the financial condition, results of operations and cash flows of the
   registrant as of, and for, the periods presented in this report;

   4. The registrant's other certifying officers and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
   financial reporting (as defined in Exchange Act Rule 13a-15(f)) for the
   registrant and have:

   a) Designed such disclosure controls and procedures, or caused such
   disclosure controls and procedures to be designed under our supervision,
   to ensure that material information relating to the registrant,
   including its consolidated subsidiaries, is made known to us by others
   within those entities, particularly during the period in which this
   report is being prepared;

   b) Designed such internal control over financial reporting, or caused such
   internal control over financial reporting to be designed under our
   supervision, to provide reasonable assurance regarding the reliability of
   financial reporting and the preparation of financial statements for external
   purposes in accordance with generally accepted accounting principles;

   c) Evaluated the effectiveness of the registrant's disclosure controls and
   procedures and presented in this report our conclusions about the
   effectiveness of the disclosure controls and procedures, as of the end of the
   period covered by this report based on such evaluation; and

   d) Disclosed in this report any change in the registrant's internal control
   over financial reporting that occurred during the registrant's most recent
   fiscal quarter (the registrant's fourth fiscal quarter in the case of an
   annual report) that has materially affected, or is reasonably likely to
   materially affect, the registrant's internal control over financial
   reporting; and

   5. The registrant's other certifying officers and I have disclosed, based on
   our most recent evaluation of internal control over financial reporting, to
   the registrant's auditors and the audit committee of the registrant's board
   of directors (or persons performing the equivalent functions):

   a) All significant deficiencies and material weaknesses in the design or
   operation of internal control over financial reporting which are
   reasonably likely to adversely affect the registrant's ability to
   record, process, summarize and report financial information; and

   b) Any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal
   control over financial reporting.


   Date:   November 7, 2006
                                 /s/ Patrick J. Callan, Jr.
                                 --------------------------
                                 Patrick J. Callan, Jr.
                                 President


<PAGE>


                                  EXHIBIT 31.3
                                  CERTIFICATION

 I, David W. Kalish, Senior Vice President and Chief Financial Officer of One
Liberty Properties, Inc. certify that:

   1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly
   period ended September 30, 2006 of One Liberty Properties, Inc.

   2. Based on my knowledge, this report does not contain any untrue statement
   of a material fact or omit to state a material fact necessary to make the
   statements made, in light of the circumstances under which such statements
   were made, not misleading with respect to the period covered by this report;

   3. Based on my knowledge, the financial statements, and other financial
   information included in this report, fairly present in all material respects
   the financial condition, results of operations and cash flows of the
   registrant as of, and for, the periods presented in this report;

   4. The registrant's other certifying officers and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
   financial reporting (as defined in Exchange Act Rule 13a-15(f)) for the
   registrant and have:

   a) Designed such disclosure controls and procedures, or caused such
   disclosure controls and procedures to be designed under our supervision, to
   ensure that material information relating to the registrant, including its
   consolidated subsidiaries, is made known to us by others within those
   entities, particularly during the period in which this report is being
   prepared;

   b) Designed such internal control over financial reporting, or caused such
   internal control over financial reporting to be designed under our
   supervision, to provide reasonable assurance regarding the reliability of
   financial reporting and the preparation of financial statements for external
   purposes in accordance with generally accepted accounting principles;

   c) Evaluated the effectiveness of the registrant's disclosure controls and
   procedures and presented in this report our conclusions about the
   effectiveness of the disclosure controls and procedures, as of the end of the
   period covered by this report based on such evaluation; and

   d) Disclosed in this report any change in the registrant's internal control
   over financial reporting that occurred during the registrant's most recent
   fiscal quarter (the registrant's fourth fiscal quarter in the case of an
   annual report) that has materially affected, or is reasonably likely to
   materially affect, the registrant's internal control over financial
   reporting; and

   5. The registrant's other certifying officers and I have disclosed, based on
   our most recent evaluation of internal control over financial reporting, to
   the registrant's auditors and the audit committee of the registrant's board
   of directors (or persons performing the equivalent functions):

   a) All significant deficiencies and material weaknesses in the design or
   operation of internal control over financial reporting which are reasonably
   likely to adversely affect the registrant's ability to record, process,
   summarize and report financial information; and

   b) Any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal control
   over financial reporting.

Date:   November 7, 2006
                                /s/ David W. Kalish
                                ------------------------
                                David W. Kalish
                                Senior Vice President
                                and Chief Financial Officer


<PAGE>



                                  EXHIBIT 32.1

       CERTIFICATION OF CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER

                           PURSUANT TO 18 U.S.C. 1350
                 (SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

The undersigned, Fredric H. Gould, Chairman of the Board and Chief Executive
Officer of One Liberty Properties, Inc., (the "Registrant"), does hereby
certify, pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that based upon a review of the Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 2006 of the Registrant,
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"):

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Registrant.

Date:   November 7, 2006   /s/ Fredric H. Gould
                           -----------------------
                           Fredric H. Gould
                           Chairman of the Board and Chief Executive Officer


<PAGE>





                                  EXHIBIT 32.2

                           CERTIFICATION OF PRESIDENT

                           PURSUANT TO 18 U.S.C. 1350
                 (SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

The undersigned, Patrick J. Callan, Jr., President of One Liberty Properties,
Inc. (the "Registrant"), does hereby certify, pursuant to 18 U.S.C. 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based
upon a review of the Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 2006 of the Registrant, as filed with the Securities and
Exchange Commission on the date hereof (the "Report"):

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Registrant.

Date:   November 7, 2006    /s/ Patrick J. Callan, Jr.
                            ----------------------------
                            Patrick J. Callan, Jr.
                            President






<PAGE>



                                  EXHIBIT 32.3

       CERTIFICATION OF SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

                           PURSUANT TO 18 U.S.C. 1350
                 (SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

The undersigned, David W. Kalish, Senior Vice President and Chief Financial
Officer of One Liberty Properties, Inc. (the "Registrant"), does hereby certify,
pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that based upon a review of the Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 2006 of the Registrant,
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"):

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Registrant.

Date:   November 7, 2006            /s/ David W. Kalish
                                    -------------------------
                                    David W. Kalish
                                    Senior Vice President
                                    and Chief Financial Officer
[{"type": "10-Q", "sequence": "1", "filename": "olp10q093006final.txt", "secsgml_size_bytes": 108211}]
{"company-data": {"conformed-name": "ONE LIBERTY PROPERTIES INC", "cik": "0000712770", "assigned-sic": "6798", "irs-number": "133147497", "state-of-incorporation": "MD", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-09279", "film-number": "061201929"}, "business-address": {"street1": "60 CUTTER MILL RD", "street2": "SUITE 303", "city": "GREAT NECK", "state": "NY", "zip": "11021-3190", "phone": "5164663100"}, "mail-address": {"street1": "60 CUTTER MILL ROAD", "street2": "SUITE 303", "city": "GREAT NECK", "state": "NY", "zip": "11021-3190"}, "former-company": {"former-conformed-name": "ONE LIBERTY FIRESTONE PROPERTIES INC", "date-changed": "19851112"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q

          [X] Quarterly Report Pursuant to Section 13 or 15(d) of the
                   Securities Exchange Act of 1934

                For the quarterly period ended September 30, 2006

                                       OR

          [ ] Transition Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                        Commission File Number 001-09279

                          ONE LIBERTY PROPERTIES, INC.
                          ----------------------------
             (Exact name of registrant as specified in its charter)

            MARYLAND                                       13-3147497
            --------------------------------------------------------------
            (State or other jurisdiction of            (I.R.S. employer
             incorporation or organization)          identification number)

           60 Cutter Mill Road, Great Neck, New York               11021
           ---------------------------------------------------------------
           (Address of principal executive offices)             (Zip code)

                                 (516) 466-3100
                                 --------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                  Yes X    No
                                     ---
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Large Accelerated Filer    Accelerated Filer  X  Non-Accelerated Filer
                       ---                   ---                       ---

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
                                  Yes   No X
                                          ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

As of November 6, 2006, the registrant had 9,963,550 shares of common stock
outstanding.
Part I - FINANCIAL INFORMATION

Item 1    Financial Statements
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                  (Amounts in Thousands, Except Per Share Data)

                                                                                 September 30,        December 31,
                                                                                      2006                2005
                                                                                 -------------        ------------
                                                                                  (Unaudited)
Assets
Real estate investments, at cost
   Land                                                                              $ 62,869           $ 51,516
   Buildings and improvements                                                         269,924            216,921
                                                                                     --------           --------
                                                                                      332,793            268,437
           Less accumulated depreciation                                               26,425             21,508
                                                                                     --------           --------
                                                                                      306,368            246,929

   Investment in unconsolidated joint ventures                                         27,600             27,335
   Cash and cash equivalents                                                            7,508             26,749
   Unbilled rent receivable                                                             7,922              6,613
   Property held for sale                                                              11,097             11,193
   Escrow, deposits and other receivables                                               2,223              4,027
   Investment in BRT Realty Trust (related party)                                         853                717
   Deferred financing costs                                                             2,925              2,822
   Other assets (including available-for-sale securities
       at market of $996 and $163)                                                      1,760                744
   Unamortized intangible lease assets                                                  4,549              3,454
                                                                                     --------           --------

           Total assets                                                              $372,805           $330,583
                                                                                     ========           ========

Liabilities and Stockholders' Equity
   Liabilities:
        Mortgages payable                                                            $196,936           $167,472
        Line of credit                                                                  4,000                  -
        Dividends payable                                                               3,281              3,255
        Accrued expenses and other liabilities                                          3,780              3,554
        Unamortized intangible lease liabilities                                        6,010                783
                                                                                     --------           --------

           Total liabilities                                                          214,007            175,064
                                                                                     --------           --------

Commitments and contingencies                                                               -                  -

Stockholders' equity:
        Preferred stock, $1 par value;
           12,500 shares authorized; none issued                                            -                  -
        Common stock, $1 par value; 25,000 shares
           authorized; 9,802 and 9,770 shares
           issued and outstanding                                                       9,802              9,770
        Paid-in capital                                                               134,281            134,645
        Accumulated other comprehensive income - net
           unrealized gain on available-for-sale securities                             1,015                818
        Unearned compensation                                                               -             (1,250)
        Accumulated undistributed net income                                           13,700             11,536
                                                                                     --------           --------

           Total stockholders' equity                                                 158,798            155,519
                                                                                     --------           --------

           Total liabilities and stockholders' equity                                $372,805           $330,583
                                                                                     ========           ========

       See accompanying notes to consolidated financial statements.
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                  (Amounts in Thousands, Except Per Share Data)
                                   (Unaudited)

                                                                       Three Months Ended             Nine Months Ended
                                                                          September 30,                  September 30,
                                                                          -------------                  -------------
                                                                      2006            2005            2006           2005
                                                                      ----            ----            ----           ----
Revenues:
   Rental income                                                    $ 8,615          $ 6,804        $24,459        $19,990
                                                                    -------          -------        -------        -------

Operating expenses:
   Depreciation and amortization                                      1,822            1,345          5,086          3,945
   General and administrative (including $325,
      $315, $1,072 and $935, respectively, to
      related party)                                                  1,484            1,347          4,171          3,199
   Real estate expenses                                                  66              103            201            277
   Leasehold rent                                                        77               77            231            231
                                                                   --------         --------       --------       --------
      Total operating expenses                                        3,449            2,872          9,689          7,652
                                                                   --------         --------       --------       --------

Operating income                                                      5,166            3,932         14,770         12,338

Other income and expenses:
   Equity in earnings (loss) of unconsolidated
       joint ventures                                                   246             (524)         1,924          1,327
   Gain on disposition of real estate related
       to unconsolidated joint venture                                3,294                -          3,294              -
   Interest and other income                                             43              150            303            229
   Interest:
      Expense                                                        (3,247)          (2,398)        (9,154)        (7,208)
      Amortization of deferred financing costs                         (153)            (134)          (443)          (416)
   Gain on sale of air rights in 2005 and other                         185                -            412         10,248
                                                                   --------         --------       --------       --------

Income from continuing operations                                     5,534            1,026         11,106         16,518
                                                                   --------         --------       --------       --------

Discontinued operations:
   Income (loss) from operations                                        201               72            891             (3)
   Net gain on sale                                                       -              631              -          1,221
                                                                   --------         --------       --------       --------
Income from discontinued operations                                     201              703            891          1,218
                                                                   --------         --------       --------       --------

Net income                                                         $  5,735         $  1,729       $ 11,997       $ 17,736
                                                                   ========         ========       ========       ========

Weighted average number of common shares outstanding:
      Basic                                                           9,937            9,852          9,921          9,830
                                                                      =====            =====          =====          =====
      Diluted                                                         9,940            9,857          9,924          9,835
                                                                      =====            =====          =====          =====

Net income per common share - basic and diluted:
      Income from continuing operations                            $    .56         $    .11       $   1.12       $   1.68
      Income from discontinued operations                               .02              .07            .09            .12
                                                                   --------         --------       --------       --------
      Net income per common share                                  $    .58         $    .18       $   1.21       $   1.80
                                                                   ========         ========       ========       ========

Cash distributions per share of common stock                       $    .33         $    .33       $    .99       $    .99
                                                                   ========         ========       ========       ========

    See accompanying notes to consolidated financial statements.
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

         For the nine month period ended September 30, 2006 (Unaudited)
                      and the year ended December 31, 2005
                             (Amounts in Thousands)

                                                                       Accumulated
                                                                          Other           Unearned     Accumulated
                                             Common        Paid-in    Comprehensive       Compen-     Undistributed
                                              Stock        Capital       Income           sation       Net Income       Total
                                              -----        -------       ------           ------       ----------       -----
Balances, January 1, 2005                    $ 9,728      $133,350       $    717       $   (926)       $  3,246       $146,115

Distributions -
   common stock                                    -             -              -              -         (12,990)       (12,990)
Exercise of options                               11           109              -              -               -            120
Shares issued through
   dividend reinvestment plan                     31           569              -              -               -            600
Issuance of restricted stock                       -           617              -           (617)              -              -
Compensation expense -
   restricted stock                                -             -              -            293               -            293
     Net income                                    -             -              -              -          21,280         21,280
     Other comprehensive income-
        net unrealized gain on
        available-for-sale securities              -             -            101              -               -            101
                                                                                                                        -------
Comprehensive income                                                                                                     21,381
                                            --------      --------      ---------       --------        --------        -------

Balances, December 31, 2005                    9,770       134,645            818         (1,250)         11,536        155,519

Reclassification upon the adoption
   of FASB No. 123 (R)                             -        (1,250)             -          1,250               -              -
Distributions -
   common stock                                    -             -              -              -          (9,833)        (9,833)
Exercise of options                                9           101              -              -               -            110
Shares issued through
   dividend reinvestment plan                     23           407              -              -               -            430
Compensation expense -
   restricted stock                                -           378              -              -               -            378
     Net income                                    -             -              -              -          11,997         11,997
     Other comprehensive income-
        net unrealized gain on
        available-for-sale securities              -             -            197              -               -            197
                                                                                                                       ---------
Comprehensive income                                                                                                     12,194
                                            --------      --------       --------      ---------        --------       ---------

Balances, September 30, 2006                $  9,802      $134,281       $  1,015      $       -        $ 13,700       $158,798
                                            ========      ========       ========      =========        ========       ========

        See accompanying notes to consolidated financial statements.
ONE LIBERTY PROPERTIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Amounts in Thousands)
                                   (Unaudited)

                                                                                                            Nine Months Ended
                                                                                                              September 30,
                                                                                                              -------------
                                                                                                        2006                2005
                                                                                                        ----                ----
Cash flows from operating activities:
   Net income                                                                                        $ 11,997            $ 17,736
   Adjustments to reconcile net income
     to net cash provided by operating activities:
   Gain on sale                                                                                          (412)            (11,469)
   Increase in rental income from straight-lining of rent                                              (1,309)               (901)
   (Increase) decrease in rental income from amortization of
     intangibles relating to leases                                                                      (120)                 18
   Gain on disposition of real estate related to unconsolidated joint venture                          (3,294)                  -
   Provision for valuation adjustment                                                                       -                 469
   Amortization of restricted stock expense                                                               378                 205
   Equity in earnings of unconsolidated joint ventures                                                 (1,924)             (1,327)
   Distributions of earnings from unconsolidated joint ventures                                         5,115               2,329
   Depreciation and amortization                                                                        5,182               4,361
   Amortization of financing costs                                                                        448                 448
   Changes in assets and liabilities:
   (Increase) decrease in escrow, deposits and other receivables                                         (903)                322
   Increase in accrued expenses and other liabilities                                                     304                 540
                                                                                                     --------            --------
           Net cash provided by operating activities                                                   15,462              12,731
                                                                                                     --------            --------

Cash flows from investing activities:
   Purchase of real estate and improvements                                                           (31,659)            (55,715)
   Net proceeds from sale of real estate                                                                  974              27,797
   Investment in unconsolidated joint ventures                                                         (1,553)               (282)
   Distributions of return of capital from unconsolidated
     joint ventures                                                                                     1,322               9,018
   Net proceeds from sale of option to purchase property                                                  227                   -
   Net proceeds from sale of available-for-sale securities                                                 11                   4
   Purchase of available-for-sale securities                                                             (714)                  -
                                                                                                     --------            --------
           Net cash (used in) investing activities                                                    (31,392)            (19,178)
                                                                                                     --------            --------

Cash flows from financing activities:
   Repayment of mortgages payable                                                                      (3,058)            (13,680)
   Proceeds from mortgages payable                                                                      5,565              32,156
   Payment of financing costs                                                                            (551)               (664)
   Proceeds from bank line of credit, net                                                               4,000                 400
   Cash distributions - common stock                                                                   (9,807)             (9,715)
   Exercise of stock options                                                                              110                 120
   Issuance of shares through dividend reinvestment plan                                                  430                 411
                                                                                                     --------            --------
           Net cash (used in) provided by financing activities                                         (3,311)              9,028
                                                                                                     --------            --------

           Net (decrease) increase in cash and cash equivalents                                       (19,241)              2,581

Cash and cash equivalents at beginning of period                                                       26,749               6,051
                                                                                                     --------            --------

Cash and cash equivalents at end of period                                                           $  7,508            $  8,632
                                                                                                     ========            ========

Supplemental disclosures of cash flow information:
   Cash paid during the period for interest                                                          $  9,540            $  7,511
                                                                                                     ========            ========

Supplemental schedule of non-cash investing and financing activities:
   Assumption of mortgage payable in connection
     with purchase of real estate                                                                    $ 26,957            $      -
                                                                                                     ========            ========
   Purchase accounting allocations                                                                   $  4,082            $  1,717
                                                                                                     ========            ========
   Reclassification of 2005 deposit in connection with
     purchase of real estate                                                                         $  2,525            $      -
                                                                                                     ========            ========

          See accompanying notes to consolidated financial statements.
One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

Note 1 - Organization and Background

One Liberty Properties, Inc. (the "Company") was incorporated in 1982 in the
state of Maryland. The Company is a self-administered and self-managed real
estate investment trust ("REIT"). The Company acquires, owns and manages a
geographically diversified portfolio of retail, industrial, office, flex, health
and fitness and other properties, a substantial portion of which are under
long-term net leases. As of September 30, 2006, the Company owns fifty-seven
properties, holds a 50% tenancy in common interest in one property and
participates in seven joint ventures which own a total of fourteen properties.
The seventy-two properties are located in twenty-six states. On October 5, 2006,
the Company sold one property and two of its joint ventures sold eight
properties. (See Note 4.)

Note 2 - Basis of Preparation

The accompanying interim unaudited consolidated financial statements as of
September 30, 2006 and for the nine and three months ended September 30, 2006
and 2005 reflect all normal recurring adjustments which are, in the opinion of
management, necessary for a fair presentation of the results for such interim
periods. The results of operations for the nine and three months ended September
30, 2006 are not necessarily indicative of the results for the full year.

The preparation of the financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

The consolidated financial statements include the accounts and operations of One
Liberty Properties, Inc. and its wholly-owned subsidiaries (collectively, the
"Company"). With respect to its unconsolidated joint ventures, as the Company
(1) is primarily the managing member but does not exercise substantial operating
control over these entities pursuant to EITF 04-05, and (2) such entities are
not variable-interest entities pursuant to FASB Interpretation No. 46R,
"Consolidation of Variable Interest Entities", it has determined that such joint
ventures should be accounted for under the equity method of accounting for
financial statement purposes. Material intercompany items and transactions have
been eliminated.

Certain amounts reported in previous consolidated financial statements have been
reclassified in the accompanying consolidated financial statements to conform to
the current year's presentation.

The Company accounts for its property acquisitions in accordance with SFAS 141
and 142 and is currently in the process of analyzing the fair value of the
in-place leases of its current year's acquisitions. Therefore, the purchase
price allocations are preliminary and subject to change.

These statements should be read in conjunction with the consolidated financial
statements and related notes which are included in the Company's Annual Report
on Form 10-K for the year ended December 31, 2005.
One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

Note 3 - Earnings Per Common Share

For the nine and three months ended September 30, 2006 and 2005, basic earnings
per share were determined by dividing net income for the period by the weighted
average number of shares of the Company's Common Stock outstanding, which
includes unvested restricted stock during each period.

Diluted earnings per share reflect the potential dilution that could occur if
securities or other contracts exercisable for, or convertible into, Common Stock
were exercised or converted or resulted in the issuance of Common Stock that
shared in the earnings of the Company. For the nine and three months ended
September 30, 2006 and 2005, diluted earnings per share were determined by
dividing net income applicable to common stockholders for the period by the
total of the weighted average number of shares of Common Stock outstanding plus
the dilutive effect of the Company's outstanding options (3,086 and 2,364 for
the nine and three months ended September 30, 2006, respectively, and 5,227 and
4,488 for the nine and three months ended September 30, 2005, respectively)
using the treasury stock method.

Note 4 - Subsequent Event/Properties Held For Sale

On October 5, 2006, the Company sold one movie theater property and two of the
Company's joint ventures sold eight movie theater properties to a single
unrelated purchaser for an aggregate consideration of $151,885,000, of which
$136,658,000 is attributable to the eight properties owned by the joint ventures
(in which the Company is a 50% equity participant) and $15,227,000 to the
property owned by the Company.

The Company estimates that the joint ventures realized a gain, for book
purposes, after expenses, fees and brokerage commissions, of approximately
$49,000,000 (of which 50%, or approximately $24,500,000, is attributable to the
Company). The Company estimates that it also realized a gain, for book purposes,
after expenses, fees and brokerage commissions, of approximately $3,660,000 on
the sale of the one movie theater property sold by the Company. The joint
ventures paid a prepayment premium of $9,683,000 (of which 50%, or approximately
$4,842,000, is attributable to the Company) on the outstanding mortgage loans
secured by the properties which were sold. The prepayment premium expense will
be deducted from equity in earnings of unconsolidated joint ventures for
financial reporting purposes and is not reflected as an expense or fees in
calculating the gains reported above. These gains and expenses will be
recognized in the three months and year ended December 31, 2006.

The Company anticipates that it will defer the taxable gain of approximately
$3,800,000 on the one property sold by its wholly-owned subsidiary through a tax
deferred exchange under Section 1031 of the Internal Revenue Code using the
sales proceeds of approximately $15,227,000 to acquire one or more replacement
properties. Therefore, the Company anticipates it will not realize a gain on the
sale of this one property for federal tax purposes.

In connection with the sale of the nine movie theater properties (eight by the
joint ventures and one by the Company), a brokerage commission totaling
$1,519,000 will be paid to Majestic Property Management Corp. (a company
wholly-owned by the Company's Chairman of the Board and Chief Executive Officer
and in which certain of the Company's officers are officers and from which such
officers are paid fees). The joint ventures are paying $1,367,000 of this
commission (of which 50% of which will be borne by the Company and 50% by the
joint venture partner) and the Company is paying $152,000 of this commission.
The commission is included as an expense in calculating the gain described
above.
One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

Note 5 - Investment in Unconsolidated Joint Ventures

The Company is a member in seven unconsolidated joint ventures which own and
operate fourteen properties. See Note 4 for information regarding the October
2006 sale of eight of these properties. The following tables present unaudited
condensed financial statements of the two most significant joint ventures. The
Company is the managing member of both joint ventures, which are between the
Company and MTC Investors LLC, an unrelated party, and own movie theater
properties.
Joint Venture #1 (A)
                              --------------------
                             (Amounts in Thousands)

Condensed Balance Sheets                                                 September 30,         December 31,
------------------------                                                 -------------         ------------
                                                                              2006                 2005
                                                                             -----                 ----
Cash and cash equivalents                                                   $    317             $    368
Properties held for sale                                                      52,912               53,384
Deferred financing costs                                                         405                  458
Unbilled rent receivable                                                       1,559                1,390
Other assets                                                                       5                    3
                                                                            --------             --------
Total assets                                                                $ 55,198             $ 55,603
                                                                            ========             ========

Mortgage loans payable                                                      $ 31,013             $ 31,720
Other liabilities                                                                273                  337
Equity                                                                        23,912               23,546
                                                                            --------             --------
Total liabilities and equity                                                $ 55,198             $ 55,603
                                                                            ========             ========

Company's equity investment (B)                                             $ 12,873             $ 12,706
                                                                            ========             ========

                                                                   Three Months Ended               Nine Months Ended
                                                                      September 30,                   September 30,
                                                                      -------------                   -------------
Condensed Statements of Operations                                2006              2005          2006             2005
----------------------------------                                ----              ----          ----             ----
Rental income                                                    $ 1,838          $ 1,838        $ 5,515         $ 5,513
                                                                 -------          -------        -------         -------

Depreciation and amortization                                          -              289            481             866
Operating expenses                                                   146               74            350             223
                                                                 -------          -------        -------         -------
Total operating expenses                                             146              363            831           1,089
                                                                 -------          -------        -------         -------

Operating income                                                   1,692            1,475          4,684           4,424

Other income and expenses:
    Interest income                                                    -                -              -               3
    Interest:
      Expense                                                       (609)            (627)        (1,839)         (1,893)
Amortization of deferred financing costs                             (17)             (17)           (52)            (52)
                                                                 -------          -------        -------         -------

Net income attributable to members                               $ 1,066          $   831        $ 2,793         $ 2,482
                                                                 =======          =======        =======         =======

Company's share of net income                                    $   533          $   415        $ 1,396         $ 1,241
                                                                 =======          =======        =======         =======

Amount recorded in income statement (B)                          $   528          $   411        $ 1,381         $ 1,226
                                                                 =======          =======        =======         =======
Distributions received by the Company:
    From operations                                              $   369          $   412        $ 1,209         $ 1,235
                                                                 =======          =======        =======         =======
    From capital                                                 $     -          $    15        $     4         $    15
                                                                 =======          =======        =======         =======
(A)      On October 5, 2006, the five movie theaters owned by this joint
         venture, constituting all of the real estate assets of this venture
         were sold. See Note 4 for details. For comparison purposes, these
         assets have been reclassified to "Properties held for sale" at December
         31, 2005.
One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

Note 5 - Investment in Unconsolidated Joint Ventures (Continued)

(B)      The difference between the carrying amount of the Company's investment
         in Joint Venture # 1 and the underlying equity in net assets is a
         premium amortized as an adjustment to equity in earnings of
         unconsolidated joint ventures over 40 years.
Joint Venture #2 (A)
                              --------------------
                             (Amounts in Thousands)

Condensed Balance Sheets                                                    September 30,         December 31,
------------------------                                                    -------------         ------------
                                                                                 2006                 2005
                                                                                -----                 ----
Cash and cash equivalents                                                     $    826               $    927
Real estate investments, net (B)                                                     -                  8,652
Properties held for sale                                                        29,117                 29,977
Deferred financing costs                                                           302                    419
Unbilled rent receivable                                                         1,338                  1,136
Deposit                                                                          1,305                      -
Other assets, primarily investment in AIX stock (C)                                235                    432
                                                                              --------               --------
Total assets                                                                  $ 33,123               $ 41,543
                                                                              ========               ========

Mortgage loans payable                                                        $ 19,939               $ 25,514
Other liabilities                                                                  228                    559
Equity                                                                          12,956                 15,470
                                                                              --------               --------
Total liabilities and equity                                                  $ 33,123               $ 41,543
                                                                              ========               ========

Company's equity investment                                                   $  6,379               $  7,632
                                                                              ========               ========
Three Months Ended               Nine Months Ended
                                                                       September 30,                   September 30,
                                                                       -------------                   -------------
Condensed Statements of Operations                                 2006            2005            2006             2005
----------------------------------                                 ----            ----            ----             ----
Rental income                                                    $ 1,151          $ 1,203         $ 3,568         $ 4,206
                                                                 -------          -------         -------         -------

Depreciation and amortization                                          -              203             337             608
Operating expenses                                                    44               37              84             144
Provision for valuation adjustment of real estate                    600            2,562             600           2,562
                                                                 -------          -------         -------         -------
Total operating expenses                                             644            2,802           1,021           3,314
                                                                 -------          -------         -------         -------

Operating income (loss)                                              507           (1,599)         2,547              892

Other income and expenses:
    Interest income                                                    9                -              9                -
    Interest:
      Expense                                                       (466)            (498)        (1,439)          (1,494)
      Mortgage prepayment premium and fees (B)                      (831)               -           (831)               -
      Amortization of deferred financing costs                        (7)              (8)           (24)             (24)
    Gain on sale of Brooklyn property (B)                          6,588                -          6,588                -
    Gain on sale of AIX stock (C)                                      -                -            166                -
                                                                 -------          -------        -------          -------

Net income (loss) attributable to members                        $ 5,800          $(2,105)       $ 7,016          $  (626)
                                                                 =======          =======        =======          =======

Company's share of net income (loss)                             $ 2,900          $(1,052)       $ 3,508          $  (313)
                                                                 =======          =======        =======          =======
Distributions received by the Company:
    From operations                                              $ 3,075          $     -        $ 3,545          $   629
                                                                 =======          =======        =======          =======
    From capital                                                 $ 1,147          $   235        $ 1,147          $   235
                                                                 =======          =======        =======          =======
One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

Note 5 - Investment in Unconsolidated Joint Ventures (Continued)

(A)     On October 5, 2006, the joint venture sold its three remaining movie
        theater properties. See Note 4 for details. For comparison purposes,
        these assets have been reclassified to "Properties held for sale" at
        December 31, 2005. The remaining real estate asset of this venture is a
        vacant parcel of land that is being offered for sale. This property has
        a nominal net book value after provisions for valuation adjustment of
        $600 and $2,562 taken as direct write downs during the three months
        ended September 30, 2006 and 2005, respectively.

(B)     On September 13, 2006, the joint venture sold a movie theater property
        located in Brooklyn, New York to an unrelated party for a consideration
        of $16,000 and realized a gain of $6,588. In connection with the
        prepayment of the mortgage loan secured by this property, the joint
        venture paid a premium of $831.

(C)     The joint venture owned 40,000 restricted shares of Class A common stock
        of Access Integrated Technologies, Inc. (NASDAQ:AIXD), the parent
        company of a former tenant of the joint venture. In April 2006, the
        joint venture sold 20,000 shares of the AIXD stock and realized a gain
        on sale of $166.

The remaining five unconsolidated joint ventures, each of which owns one
property, include one recently organized joint venture. At September 30, 2006
and December 31, 2005, the Company's equity investment in these five joint
ventures totaled $8,348,000 and $6,997,000, respectively. These unconsolidated
joint ventures contributed $329,000 and $112,000, respectively, in equity
earnings for the nine and three months ended September 30, 2006 and $414,000 and
$117,000, respectively, in equity earnings for the nine and three months ended
September 30, 2005.

Note 6 - Gain on Sale of Land and Option to Purchase Property

During July 2006, the Company sold excess acreage to an unrelated party at a
property owned by the Company for a sales price of $975,000 and realized a gain
on sale of $185,000.

During February, 2006, the Company sold an option it owned to buy an interest in
certain property adjacent to one of the Company's properties and realized a gain
on sale of $227,000.

Note 7 - Discontinued Operations

The following is a summary of income from discontinued operations, for the nine
and three months ended September 30, 2006 and 2005 applicable to the property
held for sale at September 30, 2006 (see Note 4) and to the five properties sold
in the year ended December 31, 2005: (Amounts in thousands.)
One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)
Note 7 - Discontinued Operations (Continued)

                                                              Three Months Ended            Nine Months Ended
                                                                 September 30,                September 30,
                                                                 -------------                -------------
                                                              2006         2005            2006           2005
                                                              ----         ----            ----           ----
Rental income                                                $    345     $    434       $    952       $  1,910
Other income                                                        -            -            400              5
                                                             --------     --------       --------       --------
    Total revenues                                                345          434          1,352          1,915
                                                             --------     --------       --------       --------

Depreciation and amortization                                       -           97             97            415
Real estate expenses                                               38          157             44            589
Interest expense                                                  106          108            320            445
Provision for valuation adjustment of real estate                   -            -              -            469
                                                             --------     --------       --------       --------
    Total expenses                                                144          362            461          1,918
                                                             --------     --------       --------       --------

Income (loss) from discontinued operations
    before gain on sale                                           201           72            891             (3)

Net gain on sale of discontinued operations                         -          631              -          1,221
                                                             --------     --------       --------       --------

Income from discontinued operations                          $    201     $    703       $    891       $  1,218
                                                             ========     ========       ========       ========
Real estate investment, net of accumulated depreciation, and mortgage payable
for the property held for sale at September 30, 2006 (see Note 4) was
$11,097,000 and $6,682,000, respectively, and $11,193,000 and $6,783,000,
respectively, at December 31, 2005.

Note 8 - Common Stock Dividend Distribution

On September 13, 2006, the Board of Directors declared a quarterly cash
distribution of $.33 per share, totaling $3,281,000, on the Company's Common
Stock which was paid on October 3, 2006 to stockholders of record on September
26, 2006.

Note 9 - Comprehensive Income
Comprehensive income for the nine and three months ended September 30, 2006 and
2005 are as follows (amounts in thousands):
                                                             Three Months Ended            Nine Months Ended
                                                                 September 30,               September 30,
                                                                 -------------               -------------
                                                               2006         2005          2006           2005
                                                               ----         ----          ----           ----
Net income                                                   $ 5,735     $ 1,729        $11,997        $17,736
Other comprehensive income -
    Unrealized gain on
    available-for-sale securities                                182          23            197             89
                                                             -------     -------        -------        -------
Comprehensive income                                         $ 5,917     $ 1,752        $12,194        $17,825
                                                             =======     =======        =======        =======
Accumulated other comprehensive income, which is solely comprised of the net
unrealized gain on available-for-sale securities was $1,015,000 and $818,000 at
September 30, 2006 and December 31, 2005, respectively.
One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

Note 10 - Restricted Stock

The Company adopted the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 123R, "Share-Based Payments", effective January 1, 2006.
SFAS No. 123R established financial accounting and reporting standards for
stock-based employee compensation plans, including all arrangements by which
employees receive shares of stock or other equity instruments of the employer,
or the employer incurs liabilities to employees in amounts based on the price of
the employer's stock. The statement also defined a fair value based method of
accounting for an employee stock option or similar equity instrument. The
implementation of the statement has not had a material effect on the
consolidated financial statements.

The Company's 2003 Stock Incentive Plan (the "Incentive Plan") provides for the
granting of restricted shares. The maximum number of shares of the Company's
common stock that may be issued pursuant to the Incentive Plan is 275,000. The
restricted stock grants are valued at the fair value as of the date of grant and
specify vesting upon the fifth anniversary of the date of grant. The value of
such grants are initially deferred, and amortization of amounts deferred is
being charged to operations over the respective vesting periods.
Three Months Ended                Nine Months Ended
                                                            September 30,                     September 30,
                                                            -------------                     -------------
                                                        2006             2005             2006             2005
                                                        ----             ----             ----             ----
Restricted share grants                                      -                -           50,000            41,000
Average per share grant price                         $      -         $      -       $    20.66        $    19.05
Recorded as deferred compensation                     $      -         $      -       $1,034,000        $  776,000
Total charge to operations                            $136,000         $ 57,000       $  378,000        $  205,000

Non-vested shares:
    Non-vested beginning of period                     142,000           93,000           93,000            60,000
    Grants                                                   -                -           50,000            41,000
    Vested during period                                     -                -                -                 -
    Forfeitures                                         (1,000)               -           (2,000)           (8,000)
                                                      --------          --------       ---------         ---------
    Non-vested end of period                           141,000            93,000         141,000            93,000
                                                      ========          ========       =========         =========
At September 30, 2006, approximately 133,000 shares remain available for grants
pursuant to the Incentive Plan, and approximately $1,887,000 remained as
deferred compensation and will be charged to expense over the remaining weighted
average vesting period of approximately 3.3 years.
One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

Note 11 - New Accounting Pronouncements

Emerging Issues Task Force ("EITF") Issue 04-5, "Investor's Accounting for an
Investment in a Limited Partnership when the Investor is the Sole General
Partner and the Limited Partners Have Certain Rights" was ratified by the
Financial Accounting Standards Board (the "FASB") in September 2005. This EITF
provides guidance in determining whether a general partner controls a limited
partnership and what rights held by the limited partners(s) preclude the sole
general partner from consolidating the limited partnership in accordance with
the U.S. generally accepted accounting principles. This EITF covers entities
that are equivalent to limited partnerships, such as limited liability
companies, in which the Company is a managing member. This EITF is effective no
later than fiscal years beginning after December 15, 2005 and as of September
29, 2005 for new or modified arrangements. Management has adopted the EITF issue
and its adoption did not have an effect on earnings or the financial position of
the Company.

In July 2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty
in Income Taxes" ("FIN 48"). This interpretation, among other things, creates a
two step approach for evaluating uncertain tax positions. Recognition (step one)
occurs when an enterprise concludes that a tax position, based solely on its
technical merits, is more-likely-than-not to be sustained upon examination.
Measurement (step two) determines the amount of benefit that
more-likely-than-not will be realized upon settlement. Derecognition of a tax
position that was previously recognized would occur when a company subsequently
determines that a tax position no longer meets the more-likely-than-not
threshold of being sustained. FIN 48 specifically prohibits the use of a
valuation allowance as a substitute for derecognition of tax positions, and it
has expanded disclosure requirements. FIN 48 is effective for fiscal years
beginning after December 15, 2006, in which the impact of adoption should be
accounted for as a cumulative-effect adjustment to the beginning balance of
retained earnings. The Company is evaluating FIN 48 and has not yet determined
the impact the adoption will have on the consolidated financial statements, but
it is not expected to be significant.

In September 2006, the FASB issued Statement No. 157, "Fair Value Measurements"
("SFAS No. 157"). SFAS No. 157 provides guidance for using fair value to measure
assets and liabilities. This statement clarifies the principle that fair value
should be based on the assumptions that market participants would use when
pricing the asset or liability. SFAS No.157 establishes a fair value hierarchy,
giving the highest priority to quoted prices in active markets and the lowest
priority to unobservable data. SFAS No. 157 applies whenever other standards
require assets or liabilities to be measured at fair value. This statement is
effective in fiscal years beginning after November 15, 2007. The Company
believes that the adoption of this standard on January 1, 2008 will not have a
material effect on the Company's consolidated financial statements.

In September 2006, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 108 ("SAB 108"), which becomes effective beginning on
January 1, 2007. SAB 108 provides guidance on the consideration of the effects
of prior period misstatements in quantifying current year misstatements for the
purpose of a materiality assessment. SAB108 provides for the quantification of
the impact of correcting all misstatements, including both the carryover and
reversing effects of prior year misstatements, on the current year financial
statements. If a misstatement is material to the current year financial
statements, the prior year financial statements should also be corrected, even
though such revision was, and continues to be, immaterial to the prior year
financial statements. Correcting prior year financial statements for immaterial
errors would not require previously filed reports to be amended. Such correction
should be made in the current period filings. The Company is currently
evaluating the impact of adopting SAB 108.
One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

Note 12 - Legal Matters

In July 2005, Jeffrey Fishman resigned as the Company's president, chief
executive officer and a member of the Company's Board of Directors following
discovery of what appeared to be inappropriate financial dealings by Mr. Fishman
with the former tenant of a movie theater property located in Brooklyn, NY,
owned by a joint venture in which the Company is a 50% venture partner and the
managing member. The Company had reported this matter to the Securities and
Exchange Commission in July 2005. The Audit Committee of the Company's Board of
Directors conducted an investigation of this matter and related matters and
retained special counsel to assist the committee in the investigation. This
investigation was completed and the Audit Committee and its special counsel,
based on the materials gathered and interviews conducted, found no evidence that
any other officer or employee of the Company was aware of, or knowingly assisted
in Mr. Fishman's inappropriate financial dealings.

On June 21, 2006 the Company announced that it had received notification of a
formal order of investigation from the SEC. Management believes that the matters
being investigated by the SEC focus on the improper payments received by Mr.
Fishman. The SEC has also requested information regarding "related party"
transactions between the Company and entities affiliated with it and with
certain of the Company's officers and directors and compensation paid to certain
of the Company's executive officers by those affiliates. The SEC and the
Company's Audit Committee (and its counsel) are conducting concurrent
investigations concerning these issues. The Company's direct legal expenses
related to these investigations totaled $682,000 and $360,000, respectively, in
the nine and three months ended September 30, 2006 and $467,000 in the nine and
three months ended September 30, 2005.

Note 13 - Pro Forma Information

On April 7, 2006, the Company acquired eleven retail furniture stores, located
in six states, leased to a single tenant. The properties were acquired for a
purchase price of approximately $51,200,000, with approximately $22,250,000 paid
in cash, $2,000,000 borrowed under the Company's line of credit and the
remainder through the assumption of a mortgage of approximately $26,950,000. The
basic term of the net lease expires August 14, 2022, with several renewal
options. As a result of its evaluation under SFAS 141and 142 of this
acquisition, the Company recorded a deferred asset of $843,000, representing
assumed lease origination costs and it also recorded a deferred liability of
$5,112,000 representing the net value of the acquired below market lease. These
deferred amounts will be written off over the lease term and the Company will
recognize additional rental income from the amortization of the deferred
liability and additional amortization expense relating to the amortization of
the deferred lease origination costs.

The following table summarizes, on a pro forma basis, the combined results of
continuing operations of the Company for the nine and three months ended
September 30, 2006 and 2005 as though the acquisition of the properties in April
2006 was completed on January 1, 2005. The information does not purport to be
indicative of what the operating results of the Company would have been had the
acquisition been consummated on January 1, 2005. (Amounts in thousands, except
per share data.)
One Liberty Properties, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                   (Continued)

Note 13 - Pro Forma Information (Continued)
Three Months Ended             Nine Months Ended
                                                                September 30,                 September 30,
                                                                -------------                 -------------
                                                            2006             2005           2006         2005
                                                            ----             ----           ----         ----
Pro forma revenues                                        $ 8,601          $ 8,000        $25,701       $23,581
Pro forma net income from continuing
     operations                                             5,522            1,401         11,464        17,654
Pro forma common shares:
        Basic                                               9,937            9,852          9,921         9,830
        Diluted                                             9,940            9,857          9,924         9,835
Pro forma net income per common
     share from continuing operations -
        Basic                                             $   .56          $   .14        $  1.16       $  1.80
        Diluted                                           $   .56          $   .14        $  1.16       $  1.80
Item 2.  Management's Discussion And Analysis Of Financial Condition And
         ---------------------------------------------------------------
         Results Of Operations
         ---------------------

Forward-Looking Statements
--------------------------

With the exception of historical information, this quarterly report on Form 10-Q
contains certain forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended. We intend such forward-looking
statements to be covered by the safe harbor provision for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995 and
include this statement for purposes of complying with these safe harbor
provisions. Forward-looking statements, which are based on certain assumptions
and describe our future plans, strategies and expectations, are generally
identifiable by use of the words "may," "will," "believe," "expect," "intend,"
"anticipate," "estimate," "project," or similar expressions or variations
thereof. Forward-looking statements should not be relied on since they involve
known and unknown risks, uncertainties and other factors which are, in some
cases, beyond our control and which could materially affect actual results,
performance or achievements. Investors are cautioned not to place undue reliance
on any forward-looking statements.

Overview
--------

We are a self-administered and self-managed real estate investment trust, or
REIT, and we primarily own real estate that we net lease to tenants. As of
September 30, 2006 we own 57 properties, hold a 50% tenancy in common interest
in one property and participate in seven joint ventures which own a total of 14
properties. These 72 properties are located in 26 states. On October 5, 2006,
the Company sold one property and two of its joint ventures sold eight
properties.

We have elected to be taxed as a REIT under the Internal Revenue Code of 1986,
as amended. To qualify as a REIT, we must meet a number of organizational and
operational requirements, including a requirement that we distribute currently
at least 90% of ordinary taxable income to our stockholders. We intend to comply
with these requirements and to maintain our REIT status.

Our principal business strategy is to acquire improved, commercial properties
subject to long-term net leases. We acquire properties for their value as
long-term investments and for their ability to generate income over an extended
period of time. We have borrowed funds in the past to finance the purchase of
real estate and we expect to do so in the future.

Our rental properties are generally leased to corporate tenants under operating
leases substantially all of which are noncancellable. Substantially all of our
lease agreements are net lease arrangements that require the tenant to pay not
only rent, but also substantially all of the operating expenses of the leased
property, including maintenance, taxes, utilities and insurance. A majority of
our lease agreements provide for periodic rental increases and certain of our
other leases provide for increases based on the consumer price index.

At September 30, 2006, excluding mortgages payable of our unconsolidated joint
ventures, we had 35 outstanding mortgages payable, aggregating approximately
$197 million in principal amount, each of which is secured by a first lien on an
individual real estate property. The real properties securing our outstanding
mortgages payable have an aggregate carrying value of approximately $316
million, adjusted for intangibles, before accumulated depreciation. The
mortgages bear interest at fixed rates ranging from 5.125% to 8.8%, and mature
between 2007 and 2023.

Results of Operations
---------------------

Comparison of Nine and Three Months Ended September 30, 2006 and 2005
---------------------------------------------------------------------

Revenues

Rental income increased by $4.5 million, or 22.4%, to $24.5 million for the nine
months ended September 30, 2006 from $20 million for the nine months ended
September 30, 2005. For the three months ended September 30, 2006, rental income
increased by $1.8 million, or 26.6%, to $8.6 million from $6.8 million for the
three months ended September 30, 2005. The increase in rental income is
primarily due to $4.4 million and $1.4 million of rental revenues earned during
the nine and three months ended September 30, 2006 on twenty-one properties
acquired by us between January 2005 and September 2006.

Operating Expenses

Depreciation and amortization expense increased by $1.1 million, or 28.9%, and
$477,000, or 35.5%, to $5.1 million and $1.8 million for the nine and three
months ended September 30, 2006. The increase in depreciation and amortization
expense was primarily due to the acquisition of twenty-one properties between
January 2005 and September 2006.

General and administrative expenses increased by $972,000, or 30.4%, to $4.2
million for the nine months ended September 30, 2006. For the three months ended
September 30, 2006, general and administrative expenses increased by $137,000,
or 10.2%, to $1.5 million. The increase was due to a number of factors, the
largest of which (totaling $283,000 and $188,000, respectively, for the nine and
three months ended September 30, 2006) relates to payroll and payroll related
expenses resulting primarily from compensation paid to our new president for the
entire current fiscal periods, as well as from staff increases. An increase of
$215,000 and a decrease of $108,000 in the nine and three months ended September
30, 2006, respectively, relates to professional fees incurred in connection with
an investigation by the Securities and Exchange Commission described elsewhere
in this filing (Part II - Other Information - Item I - Legal Proceedings) and
investigations by the Company's Audit Committee. In addition, there was an
increase of $63,000 and a decrease of $30,000 in the nine and three months ended
September 30, 2006, respectively, in legal fees relating to a civil litigation
arising out of the activities of our former president and chief executive
officer. For the nine and three months ended September 30, 2006 expenses
allocated to us under a Shared Services Agreement among us and various
affiliated companies, increased by $138,000 and $10,000, respectively, for
executive and support personnel, primarily for legal and accounting services, a
significant portion of which relates to the SEC and Audit Committee
investigations, as well as property acquisitions and the overall increase in the
level of our business activity. Also included in the nine and three months ended
September 30, 2006 is an increase in compensation expense relating to our
restricted stock program of $173,000 and $79,000, respectively, and an increase
in directors' fees of $48,000 and $2,000, respectively.

Real estate expenses decreased by $76,000, or 27.4%, and $37,000, or 35.9% for
the nine and three months ended September 30, 2006, resulting primarily from
unusual repair items at three properties incurred in the 2005 nine and three
month periods.

Other Income and Expenses

Our equity in earnings of unconsolidated joint ventures increased by $597,000,
or 45%, to $1.9 million for the nine months ended September 30, 2006 and by
$770,000, or 147%, to $246,000 for the three months ended September 30, 2006.
The increase resulted primarily from a $2.56 million provision for valuation
adjustment taken at September 30, 2005 by one of our movie theater joint
ventures against one of its properties, of which 50%, or $1.3 million, was our
share. At September 30, 2006, this joint venture recorded an additional $600,000
provision against this property, of which 50%, or $300,000, is our share. The
increase in earnings of unconsolidated joint ventures also resulted from
decreases of $655,000, of which 50%, or $327,000 is our share and $491,000, of
which $246,000, is our share, in the nine and three months ended September 30,
2006, respectively, in depreciation expense which ceased June 1, 2006 for the
nine theaters which were sold. The increase is also due to a gain of $166,000,
of which our 50% share is $83,000, on the sale of securities during the nine
months ended September 30, 2006. These increases were offset in part by the
payment to one of our joint ventures of rental arrearages totaling $592,000 in
February 2005. We have a 50% interest in this joint venture and the payment
resulted in $296,000 of equity in earnings to us in the nine months ended
September 30, 2005. The increase in the nine months ended September 30, 2006
was also offset by $831,000, of which 50%, or $415,000 is our share, for a
mortgage prepayment premium paid by one of our joint ventures upon the sale of
its Brooklyn movie theater on September 13, 2006. This movie theater property
was sold for a consideration of $16 million and the joint venture realized a
gain of $6.6 million, of which our share is $3.3 million.

Interest and other income increased by $74,000 to $303,000, or 32.3%, and
decreased by $107,000 to $43,000, or 71.3%, for the nine and three months ended
September 30, 2006, respectively. The increase in interest and other income for
the nine months ended September 30, 2006 results from interest earned through
March 2006 on our investment in short-term cash equivalents of the proceeds
received from a mortgage financing completed during December 2005. The decrease
in the three months ended September 30, 2006 is due to less funds being
available for investment.

Interest expense increased by $1.9 million, or 27%, and $849,000, or 35.4%, to
$9.2 million and $3.2 million, respectively, for the nine and three months ended
September 30, 2006. This includes increases of $2.1 million and $857,000,
respectively, on our mortgages payable, principally resulting from mortgages
placed on twenty-two properties between March 2005 and April 2006. This increase
was offset by a decrease of $198,000 and $8,000, respectively, during the nine
and three months ended September 30, 2006 of interest expense related to our
line of credit. The higher expense in the nine months ended September 30, 2005
resulted from borrowings made to facilitate the purchase of several properties.

Amortization of deferred financing costs increased by $27,000, or 6.5%, and
$19,000, or 14.2%, to $443,000 and $153,000 for the nine and three months ended
September 30, 2006. The increase results from the amortization of deferred
mortgage costs during the nine and three months ended September 30, 2006
resulting from mortgages placed on twenty-two properties between March 2005 and
April 2006.

During July 2006, we sold excess acreage to an unrelated party at a property we
own and recognized a gain of $185,000. During February 2006, we sold an option
to buy an interest in certain property adjacent to one of our properties and
recognized a gain of $227,000. In June 2005, we closed on the sale of unused
development or "air rights" relating to our property located in Brooklyn, New
York for a net gain, after closing costs, of approximately $10.25 million.

Discontinued Operations

Discontinued operations decreased by $327,000, or 26.8%, and $502,000, or 71.4%,
to $891,000 and $201,000, respectively, for the nine and three months ended
September 30, 2006. These decreases were primarily due to gains of $1.2 million
and $631,000 realized on the sale of two properties in the 2005 nine and three
month periods, respectively. The gains in 2005 were offset in part by a $469,000
provision for valuation adjustment recorded in 2005 against one of the five
properties sold in the year ended December 31, 2005 (and included in
discontinued operations). The decrease was also offset in part by the receipt in
the nine months ended September 30, 2006 of a $400,000 settlement of a claim
made by us against a title insurance company regarding our purchase of a
property in a prior year. (Sold in 2005.)

Liquidity and Capital Resources
-------------------------------

We had cash and cash equivalents of approximately $7.5 million at September 30,
2006. Our primary sources of liquidity are cash and cash equivalents, our
revolving credit facility and cash generated from operating activities,
including mortgage financings. We have a $62.5 million revolving credit facility
with Valley National Bank, Merchants Bank Division, Bank Leumi USA,
Manufacturers and Traders Trust Company and Israel Discount Bank of New York.
The facility is available to us to pay down existing and maturing mortgages, to
fund the acquisition of properties or to invest in joint ventures. The facility
matures on June 30, 2007. Borrowings under the facility bear interest at the
lower of LIBOR plus 2.5% or the bank's prime rate, and there is an unused
facility fee of one-quarter of 1% per annum. Net proceeds received from the sale
or refinancing of properties are required to be used to repay amounts
outstanding under the facility if proceeds from the facility were used to
purchase or refinance such properties. The $4 million balance at September 30,
2006 was paid in full during October 2006, using a portion of the $37 million
distribution we received from our two movie theater joint ventures upon the sale
of eight of its properties.

We actively engage in seeking additional property acquisitions and we are
involved in various stages of negotiation with respect to the acquisition of
additional properties. We will fund our future real estate acquisitions by using
cash available, including the remainder of the distribution received from our
movie theater joint ventures, cash provided from operations, cash provided from
mortgage financings and funds available under our credit facility.

We had no outstanding contingent commitments, such as guarantees of
indebtedness, or any other contractual cash obligations at September 30, 2006.

Cash Distribution Policy

We have elected to be taxed as a REIT under the Internal Revenue Code of 1986,
as amended. To qualify as a REIT, we must meet a number of organizational and
operational requirements, including a requirement that we distribute currently
at least 90% of our ordinary taxable income to our stockholders. It is our
current intention to comply with these requirements and maintain our REIT
status. As a REIT, we generally will not be subject to corporate federal, state
or local income taxes on taxable income we distribute currently (in accordance
with the Internal Revenue Code and applicable regulations) to our stockholders.
If we fail to qualify as a REIT in any taxable year, we will be subject to
federal, state and local income taxes at regular corporate rates and may not be
able to qualify as a REIT for four subsequent tax years. Even if we qualify as a
REIT for federal taxation purposes, we may be subject to certain state and local
taxes on our income and to federal income and excise taxes on our undistributed
taxable income (i.e., taxable income not distributed in the amounts and in the
time frames prescribed by the Internal Revenue Code and applicable regulations
thereunder).

It is our intention to pay to our stockholders within the time periods
prescribed by the Internal Revenue Code no less than 90% of our annual taxable
income, including gains on the sale of real estate, except where we elect to
defer gains for tax purposes and invest the proceeds in new properties under
applicable rules of the Internal Revenue Code. It will continue to be our policy
to make sufficient cash distributions to stockholders in order for us to
maintain our REIT status under the Internal Revenue Code.
Item 3. - Quantitative and Qualitative Disclosures About Market Risk
          ----------------------------------------------------------
All of our long-term mortgage debt bears interest at fixed rates and
accordingly, the effect of changes in interest rates would not impact the amount
of interest expense that we incur under these mortgages. Our credit line is a
variable rate facility which is sensitive to interest rates. However, for the
nine months ended September 30, 2006, due to a low average balance outstanding
on the credit line, we do not believe that the effect of changes in interest
rates would materially impact the amount of interest expense incurred.

Item 4. - Controls and Procedures
          -----------------------
As required under Rules 13a-15 (e) and 15d-15 (e) under the Securities Exchange
Act of 1934, as amended, we carried out an evaluation under the supervision and
with the participation of our management, including our Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures as of September 30, 2006 are effective.

There were no changes in our internal control over financial reporting (as
defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) during the
three months ended September 30, 2006 that materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
PART II - OTHER INFORMATION

Item 1.         Legal Proceedings
                -----------------

         In July 2005, Jeffrey Fishman resigned as our president, chief
executive officer and a member of our Board of Directors following discovery of
what appeared to be inappropriate financial dealings by Mr. Fishman with the
former tenant of a movie theater property located in Brooklyn, NY, owned by a
joint venture in which we are a 50% venture partner and the managing member. We
had reported this matter to the Securities and Exchange Commission in July 2005.
The Audit Committee of our Board of Directors conducted an investigation of this
matter and related matters and retained special counsel to assist the committee
in the investigation. This investigation was completed and the Audit Committee
and its special counsel, based on the materials gathered and interviews
conducted, found no evidence that any other officer or employee of the Company
was aware of, or knowingly assisted in Mr. Fishman's inappropriate financial
dealings.

         On June 21, 2006 we announced that we had received notification of a
formal order of investigation from the SEC. We believe that the matters being
investigated by the SEC focus on the improper payments received by Mr. Fishman.
The SEC has also requested information regarding "related party" transactions
between the Company and entities affiliated with us and with certain of our
officers and directors and compensation paid to certain of the Company's
executive officers by those affiliates. Both the SEC and the Audit Committee and
its counsel have been conducting concurrent investigations concerning these
issues. The Company and its executive officers have fully cooperated with the
investigations being conducted by the SEC and the Audit Committee and intend to
continue to do so. As of this date, both investigations are on-going. Our direct
legal expenses related to these investigations totaled $682,000 and $360,000,
respectively, in the nine and three months ended September 30, 2006. Our direct
legal expenses related to the investigation by the Audit Committee of our former
president and chief executive officer totaled $560,000 in the year ended
December 31, 2005. These expenses have continued in the current quarter (ended
September 30, 2006) and we cannot at this time estimate the legal expenses we
will incur with respect to these investigations in any future quarter.

         Reference is made to Item 3 of the Company's Annual Report on Form 10-K
for the year ended December 31, 2005 with respect to civil litigations involving
the former tenant of the Brooklyn property, Mr. Fishman and Britannia Management
LLC, on one hand, and the Company and certain of its affiliated entities, on the
other hand. For the nine and three months ended September 30, 2006, the Company
incurred $105,000 and $12,000 in legal expenses related to the civil litigation
and $63,000 for the year ended December 31, 2005. There has been no material
change in the status of either litigation other than as discussed below.  The
litigations have been joined for discovery purposes and the Company amended its
complaint to add additional parties including Mr. Fishman's and Mr. Adie's
spouses. Mr. and Mrs. Fishman each made motions to dismiss which were granted
in part and denied in part. The principal claims of fraud, breach of fiduciary
and commercial bribery remain. In addition, the Court has granted the Company
leave to pursue summary judgment against Mr. Fishman and further set a
preliminary discovery schedule which will not be stayed during the pendency of
the Company's motion. The motions were granted to limit the claims as against
Mrs. Fishman to unjust enrichment for monies she has received from Mr. Adie or
his entities and as against Mr. Fishman to dismiss certain claims including the
RICO claims.

Item 6.    Exhibits
           --------

           Exhibit 31.1    Certification of Chairman of the Board and Chief
                           Executive Officer pursuant to Section 302 of
                           the Sarbanes-Oxley Act of 2002. (Filed with this
                           Form 10-Q.)

           Exhibit 31.2    Certification of President pursuant to Section 302
                           of the Sarbanes-Oxley Act of 2002. (Filed with this
                           Form 10-Q.)

           Exhibit 31.3    Certification of Senior Vice President and Chief
                           Financial Officer pursuant to Section 302 of
                           the Sarbanes-Oxley Act of 2002. (Filed with this
                           Form 10-Q.)

           Exhibit 32.1    Certification of Chairman of the Board and Chief
                           Executive Officer pursuant to Section 906 of
                           the Sarbanes-Oxley Act of 2002. (Filed with this
                           Form 10-Q.)

           Exhibit 32.2    Certification of President pursuant to Section 906
                           of the Sarbanes-Oxley Act of 2002.  (Filed with this
                           Form 10-Q.)

           Exhibit 32.3    Certification of Senior Vice President and Chief
                           Financial Officer pursuant to Section 906 of
                           the Sarbanes-Oxley Act of 2002. (Filed with this
                           Form 10-Q.)
ONE LIBERTY PROPERTIES, INC.

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                          One Liberty Properties, Inc.
                                  (Registrant)

November 7, 2006                    /s/ Patrick J. Callan, Jr.
----------------                    ---------------------------------
Date                                Patrick J. Callan, Jr.
                                    President
                                    (authorized officer)

November 7, 2006                    /s/ David W. Kalish
----------------                    -------------------------------
Date                                David W. Kalish
                                    Senior Vice President and
                                    Chief Financial Officer
                                    (principal financial officer)
EXHIBIT 31.1
                                  CERTIFICATION

   I, Fredric H. Gould, Chairman of the Board and Chief Executive Officer of
One Liberty Properties, Inc. certify that:

   1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly
   period ended September 30, 2006 of One Liberty Properties, Inc.

   2. Based on my knowledge, this report does not contain any untrue statement
   of a material fact or omit to state a material fact necessary to make the
   statements made, in light of the circumstances under which such statements
   were made, not misleading with respect to the period covered by this report;

   3. Based on my knowledge, the financial statements, and other financial
   information included in this report, fairly present in all material respects
   the financial condition, results of operations and cash flows of the
   registrant as of, and for, the periods presented in this report;

   4. The registrant's other certifying officers and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
   financial reporting (as defined in Exchange Act Rule 13a-15(f)) for the
   registrant and have:

   a)   Designed such disclosure controls and procedures, or caused such
   disclosure controls and procedures to be designed under our supervision,
   to ensure that material information relating to the registrant,
   including its consolidated subsidiaries, is made known to us by others
   within those entities, particularly during the period in which this
   report is being prepared;

   b) Designed such internal control over financial reporting, or caused such
   internal control over financial reporting to be designed under our
   supervision, to provide reasonable assurance regarding the reliability of
   financial reporting and the preparation of financial statements for external
   purposes in accordance with generally accepted accounting principles;

   c) Evaluated the effectiveness of the registrant's disclosure controls and
   procedures and presented in this report our conclusions about the
   effectiveness of the disclosure controls and procedures, as of the end of the
   period covered by this report based on such evaluation; and

   d) Disclosed in this report any change in the registrant's internal control
   over financial reporting that occurred during the registrant's most recent
   fiscal quarter (the registrant's fourth fiscal quarter in the case of an
   annual report) that has materially affected, or is reasonably likely to
   materially affect, the registrant's internal control over financial
   reporting; and

   5. The registrant's other certifying officers and I have disclosed, based on
   our most recent evaluation of internal control over financial reporting, to
   the registrant's auditors and the audit committee of the registrant's board
   of directors (or persons performing the equivalent functions):

   a) All significant deficiencies and material weaknesses in the design or
   operation of internal control over financial reporting which are
   reasonably likely to adversely affect the registrant's ability to
   record, process, summarize and report financial information; and

   b) Any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal
   control over financial reporting.

   Date:   November 7, 2006
                                      /s/ Fredric H. Gould
                                      --------------------
                                      Fredric H. Gould
                                      Chairman of the Board and
                                      Chief Executive Officer
EXHIBIT 31.2
                                  CERTIFICATION

   I, Patrick J. Callan, Jr., President of One Liberty Properties, Inc.
certify that:

   1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly
   period ended September 30, 2006 of One Liberty Properties, Inc.

   2. Based on my knowledge, this report does not contain any untrue statement
   of a material fact or omit to state a material fact necessary to make the
   statements made, in light of the circumstances under which such statements
   were made, not misleading with respect to the period covered by this report;

   3. Based on my knowledge, the financial statements, and other financial
   information included in this report, fairly present in all material respects
   the financial condition, results of operations and cash flows of the
   registrant as of, and for, the periods presented in this report;

   4. The registrant's other certifying officers and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
   financial reporting (as defined in Exchange Act Rule 13a-15(f)) for the
   registrant and have:

   a) Designed such disclosure controls and procedures, or caused such
   disclosure controls and procedures to be designed under our supervision,
   to ensure that material information relating to the registrant,
   including its consolidated subsidiaries, is made known to us by others
   within those entities, particularly during the period in which this
   report is being prepared;

   b) Designed such internal control over financial reporting, or caused such
   internal control over financial reporting to be designed under our
   supervision, to provide reasonable assurance regarding the reliability of
   financial reporting and the preparation of financial statements for external
   purposes in accordance with generally accepted accounting principles;

   c) Evaluated the effectiveness of the registrant's disclosure controls and
   procedures and presented in this report our conclusions about the
   effectiveness of the disclosure controls and procedures, as of the end of the
   period covered by this report based on such evaluation; and

   d) Disclosed in this report any change in the registrant's internal control
   over financial reporting that occurred during the registrant's most recent
   fiscal quarter (the registrant's fourth fiscal quarter in the case of an
   annual report) that has materially affected, or is reasonably likely to
   materially affect, the registrant's internal control over financial
   reporting; and

   5. The registrant's other certifying officers and I have disclosed, based on
   our most recent evaluation of internal control over financial reporting, to
   the registrant's auditors and the audit committee of the registrant's board
   of directors (or persons performing the equivalent functions):

   a) All significant deficiencies and material weaknesses in the design or
   operation of internal control over financial reporting which are
   reasonably likely to adversely affect the registrant's ability to
   record, process, summarize and report financial information; and

   b) Any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal
   control over financial reporting.

   Date:   November 7, 2006
                                 /s/ Patrick J. Callan, Jr.
                                 --------------------------
                                 Patrick J. Callan, Jr.
                                 President
EXHIBIT 31.3
                                  CERTIFICATION

 I, David W. Kalish, Senior Vice President and Chief Financial Officer of One
Liberty Properties, Inc. certify that:

   1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly
   period ended September 30, 2006 of One Liberty Properties, Inc.

   2. Based on my knowledge, this report does not contain any untrue statement
   of a material fact or omit to state a material fact necessary to make the
   statements made, in light of the circumstances under which such statements
   were made, not misleading with respect to the period covered by this report;

   3. Based on my knowledge, the financial statements, and other financial
   information included in this report, fairly present in all material respects
   the financial condition, results of operations and cash flows of the
   registrant as of, and for, the periods presented in this report;

   4. The registrant's other certifying officers and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
   financial reporting (as defined in Exchange Act Rule 13a-15(f)) for the
   registrant and have:

   a) Designed such disclosure controls and procedures, or caused such
   disclosure controls and procedures to be designed under our supervision, to
   ensure that material information relating to the registrant, including its
   consolidated subsidiaries, is made known to us by others within those
   entities, particularly during the period in which this report is being
   prepared;

   b) Designed such internal control over financial reporting, or caused such
   internal control over financial reporting to be designed under our
   supervision, to provide reasonable assurance regarding the reliability of
   financial reporting and the preparation of financial statements for external
   purposes in accordance with generally accepted accounting principles;

   c) Evaluated the effectiveness of the registrant's disclosure controls and
   procedures and presented in this report our conclusions about the
   effectiveness of the disclosure controls and procedures, as of the end of the
   period covered by this report based on such evaluation; and

   d) Disclosed in this report any change in the registrant's internal control
   over financial reporting that occurred during the registrant's most recent
   fiscal quarter (the registrant's fourth fiscal quarter in the case of an
   annual report) that has materially affected, or is reasonably likely to
   materially affect, the registrant's internal control over financial
   reporting; and

   5. The registrant's other certifying officers and I have disclosed, based on
   our most recent evaluation of internal control over financial reporting, to
   the registrant's auditors and the audit committee of the registrant's board
   of directors (or persons performing the equivalent functions):

   a) All significant deficiencies and material weaknesses in the design or
   operation of internal control over financial reporting which are reasonably
   likely to adversely affect the registrant's ability to record, process,
   summarize and report financial information; and

   b) Any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal control
   over financial reporting.

Date:   November 7, 2006
                                /s/ David W. Kalish
                                ------------------------
                                David W. Kalish
                                Senior Vice President
                                and Chief Financial Officer
EXHIBIT 32.1

       CERTIFICATION OF CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER

                           PURSUANT TO 18 U.S.C. 1350
                 (SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

The undersigned, Fredric H. Gould, Chairman of the Board and Chief Executive
Officer of One Liberty Properties, Inc., (the "Registrant"), does hereby
certify, pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that based upon a review of the Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 2006 of the Registrant,
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"):

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Registrant.

Date:   November 7, 2006   /s/ Fredric H. Gould
                           -----------------------
                           Fredric H. Gould
                           Chairman of the Board and Chief Executive Officer
EXHIBIT 32.2

                           CERTIFICATION OF PRESIDENT

                           PURSUANT TO 18 U.S.C. 1350
                 (SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

The undersigned, Patrick J. Callan, Jr., President of One Liberty Properties,
Inc. (the "Registrant"), does hereby certify, pursuant to 18 U.S.C. 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based
upon a review of the Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 2006 of the Registrant, as filed with the Securities and
Exchange Commission on the date hereof (the "Report"):

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Registrant.

Date:   November 7, 2006    /s/ Patrick J. Callan, Jr.
                            ----------------------------
                            Patrick J. Callan, Jr.
                            President
EXHIBIT 32.3

       CERTIFICATION OF SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

                           PURSUANT TO 18 U.S.C. 1350
                 (SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

The undersigned, David W. Kalish, Senior Vice President and Chief Financial
Officer of One Liberty Properties, Inc. (the "Registrant"), does hereby certify,
pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that based upon a review of the Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 2006 of the Registrant,
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"):

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Registrant.

Date:   November 7, 2006            /s/ David W. Kalish
                                    -------------------------
                                    David W. Kalish
                                    Senior Vice President
                                    and Chief Financial Officer