Group 1 - The Federal Reserve Chair, Jerome Powell, indicated in his speech that interest rates are likely to be cut soon [1] - The speech took place at the Federal Reserve's annual symposium in Jackson Hole, which is a significant event for economic policy discussions [1] Group 2 - The company invests substantial resources, over $100,000 annually, into researching profitable investment opportunities [2] - The approach has garnered over 500 five-star reviews from members who have benefited from the strategies provided [2]

Core Viewpoint - Clipper Realty (NYSE: CLPR) is viewed positively due to its secure dividend and attractive valuation relative to its portfolio of high-quality multifamily properties in New York, despite a year-to-date decline in stock price [1]. Group 1: Company Analysis - Clipper Realty's stock price has dipped year-to-date, yet the company maintains a bullish outlook due to its secure dividend and deeply discounted valuation [1]. - The company is part of a broader strategy by Pacifica Yield, which focuses on long-term wealth creation through investments in undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1].

Group 1: Investment Strategy - The focus is on a ranking system that emphasizes earnings estimates and revisions to identify winning stocks [1] - Value investing is highlighted as a strategy to find companies undervalued by the market using fundamental analysis [2] - Zacks has developed a Style Scores system to identify stocks with specific traits, particularly for value investors [3] Group 2: Clipper Realty (CLPR) - Clipper Realty holds a Zacks Rank of 2 (Buy) and a Value grade of A, with a P/E ratio of 7.96 compared to the industry average of 15.42 [4] - Over the past 52 weeks, CLPR's Forward P/E has ranged from 6.80 to 14.24, with a median of 10.53 [4] - The P/CF ratio for CLPR is 9.47, significantly lower than the industry average of 14.76, with a historical range of 5.23 to 10.00 [5] Group 3: Pebblebrook Hotel Trust (PEB) - Pebblebrook Hotel Trust also has a Zacks Rank of 2 (Buy) and a Value grade of A, with a forward earnings multiple of 6.46 [6] - PEB's P/E ratio has fluctuated between 4.77 and 8.94, with a median of 7.49, while its PEG ratio has ranged from 0.50 to 2.03, with a median of 0.57 [7] - The P/B ratio for PEB is 0.41, compared to the industry average of 1.68, with a historical range of 0.34 to 0.63 [7] Group 4: Overall Value Assessment - Both Clipper Realty and Pebblebrook Hotel Trust are identified as likely undervalued stocks based on key metrics and earnings outlook [8]

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS This section warns that forward-looking statements are subject to risks and uncertainties that could materially alter actual results - The report contains forward-looking statements regarding the Company's financial position, business strategy, and future operations, which are subject to risks and uncertainties that could cause actual results to differ materially[7](index=7&type=chunk) - Key risks include **dependency on two commercial leases** with the City of New York (one terminating August 23, 2025, the other expiring December 27, 2025), **impact of inflation on property costs**, market and economic conditions affecting occupancy and capital access, changes in rent stabilization regulations, and risks related to financing and development activities[9](index=9&type=chunk) PART I – FINANCIAL INFORMATION This section presents the company's financial statements and management's discussion and analysis [ITEM 1. CONDENSED FINANCIAL STATEMENTS](index=5&type=section&id=ITEM%201.%20CONDENSED%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements of Clipper Realty Inc. for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of operations, changes in equity, and cash flows, along with detailed notes explaining the company's organization, significant accounting policies, and specific financial line items [Consolidated Balance Sheets](index=5&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) This section details the company's financial position, including assets, liabilities, and equity Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | **Assets** | | | | Total investment in real estate, net | $1,157,464 | $1,228,528 | | Cash and cash equivalents | $32,029 | $19,896 | | Restricted cash | $28,809 | $18,156 | | Total Assets | $1,241,323 | $1,286,965 | | **Liabilities & Equity (Deficit)** | | | | Notes payable, net | $1,268,171 | $1,266,340 | | Total Liabilities | $1,299,019 | $1,301,195 | | Total Equity (Deficit) | $(57,696) | $(14,230) | | Total Liabilities and Equity (Deficit) | $1,241,323 | $1,286,965 | - Total Equity (Deficit) significantly decreased from **$(14,230) thousand** at December 31, 2024, to **$(57,696) thousand** at June 30, 2025[12](index=12&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This section presents the company's financial performance, detailing revenues, expenses, and net income or loss Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $39,036 | $37,346 | $78,434 | $73,106 | | Total Operating Expenses | $28,202 | $27,348 | $91,181 | $54,036 | | Income (Loss) From Operations | $10,808 | $9,998 | $(12,773) | $19,070 | | Net Loss | $(1,356) | $(1,743) | $(36,459) | $(4,410) | | Net Loss Attributable to Common Stockholders | $(516) | $(660) | $(13,863) | $(1,673) | | Basic and Diluted Net Loss Per Share | $(0.07) | $(0.06) | $(0.93) | $(0.15) | - For the six months ended June 30, 2025, the company reported a significant loss from operations of **$(12,773) thousand**, compared to an income of **$19,070 thousand** in the prior year, primarily due to a **$33,780 thousand loss on impairment of long-lived assets**[14](index=14&type=chunk) [Consolidated Statements of Changes in Equity](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20EQUITY) This section details changes in the company's equity structure over specific periods Consolidated Statements of Changes in Equity Highlights (in thousands) | Metric | Balance December 31, 2024 | Balance June 30, 2025 | | :-------------------------------- | :------------------------ | :-------------------- | | Total stockholders' equity | $(5,409) | $(21,936) | | Non-controlling interests | $(8,821) | $(35,760) | | Total equity | $(14,230) | $(57,696) | - Total equity (deficit) decreased significantly from **$(14,230) thousand** at December 31, 2024, to **$(57,696) thousand** at June 30, 2025, driven by net losses and distributions[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $15,044 | $15,044 | | Net cash provided (used) in investing activities | $17,967 | $(42,051) | | Net cash provided (used) by financing activities | $(10,225) | $27,526 | | Net increase in cash and cash equivalents and restricted cash | $22,786 | $519 | | Cash and cash equivalents and restricted cash - end of period | $60,838 | $36,744 | - Net cash provided by investing activities significantly improved to **$17,967 thousand** for the six months ended June 30, 2025, from **$(42,051) thousand** used in the prior year, primarily due to proceeds from the sale of 10 West 65th Street[19](index=19&type=chunk) - Net cash used by financing activities was **$(10,225) thousand** for the six months ended June 30, 2025, a shift from **$27,526 thousand** provided in the prior year, mainly due to mortgage loan repayments and loan issuance costs[19](index=19&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed explanations for the condensed consolidated financial statements [Introduction to the Condensed Consolidated Financial Statements](index=10&type=section&id=INTRODUCTION%20TO%20THE%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section introduces the unaudited condensed consolidated financial statements and their preparation basis - The unaudited condensed consolidated financial statements are prepared in accordance with SEC rules and GAAP, with certain information condensed or omitted compared to annual reports[20](index=20&type=chunk) [1. Organization](index=10&type=section&id=1.%20Organization) This section describes the company's structure, property portfolio, and operating partnership model - As of June 30, 2025, the Company's property portfolio includes Tribeca House, Flatbush Gardens, 141 Livingston Street, 250 Livingston Street, Aspen, Clover House, 1010 Pacific Street, and the Dean Street redevelopment property[24](index=24&type=chunk) - On May 30, 2025, the Company sold 10 West 65th Street for gross proceeds of **$45,500 thousand**, incurring a loss on disposal of **$685 thousand**, following a **$33,780 thousand impairment loss** recorded in Q1 2025[22](index=22&type=chunk)[144](index=144&type=chunk) - The Company operates as a REIT, with operations primarily through Clipper Realty L.P., its operating partnership subsidiary[23](index=23&type=chunk)[25](index=25&type=chunk) - The Company's interest in the LLCs that own the properties generally entitles it to **38.0%** of aggregate cash distributions, profits, and losses as of June 30, 2025[23](index=23&type=chunk)[25](index=25&type=chunk) [2. Significant Accounting Policies](index=12&type=section&id=2.%20Significant%20Accounting%20Policies) This section outlines the significant accounting principles and methods used in financial reporting - The Company has two reportable operating segments: Residential Rental Properties and Commercial Rental Properties, with the Chief Operating Decision Maker reviewing revenue and Income from Operations for each[27](index=27&type=chunk) - Real estate assets are carried at historical cost, with improvements capitalized and ordinary repairs expensed[30](index=30&type=chunk)[35](index=35&type=chunk) - Long-lived assets are reviewed for impairment when circumstances indicate carrying amount may not be recoverable[30](index=30&type=chunk)[35](index=35&type=chunk) - Revenue recognition for commercial leases is on a straight-line basis, while residential leases and parking income are recognized as earned[46](index=46&type=chunk)[49](index=49&type=chunk) - The Company charges revenue for residential receivables not deemed probable of collection[46](index=46&type=chunk)[49](index=49&type=chunk) Residential Receivables Not Deemed Probable of Collection (in thousands) | Period | Charged Revenue | Recognized Revenue (Reassessment) | | :----------------------------- | :-------------- | :-------------------------------- | | Three months ended June 30, 2025 | $985 | $23 | | Three months ended June 30, 2024 | $933 | $113 | | Six months ended June 30, 2025 | $1,892 | $91 | | Six months ended June 30, 2024 | $1,719 | $229 | - Stock-based compensation for LTIP units is expensed over the vesting period[51](index=51&type=chunk)[52](index=52&type=chunk) - As of June 30, 2025, **$17,724 thousand** of unrecognized compensation cost remains, to be recorded over approximately **3.5 years**[51](index=51&type=chunk)[52](index=52&type=chunk) [3. Deferred Costs and Intangible Assets](index=18&type=section&id=3.%20Deferred%20Costs%20and%20Intangible%20Assets) This section details the company's deferred costs and intangible assets, including amortization Deferred Costs and Intangible Assets, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Total deferred costs and intangible assets | $11,608 | $11,529 | | Less accumulated amortization | $(6,143) | $(5,852) | | Total deferred costs and intangible assets, net | $5,465 | $5,676 | Amortization of Deferred Costs and Intangible Assets (in thousands) | Period | Amortization of Deferred Costs, Lease Origination, In-place Leases | Amortization of Real Estate Tax Abatements | | :----------------------------- | :---------------------------------------------------------------- | :----------------------------------------- | | Three months ended June 30, 2025 | $25 | $120 | | Three months ended June 30, 2024 | $27 | $120 | | Six months ended June 30, 2025 | $51 | $241 | | Six months ended June 30, 2024 | $53 | $241 | [4. Notes Payable](index=19&type=section&id=4.%20Notes%20Payable) This section provides details on the company's outstanding debt, including maturities, interest rates, and related issues Notes Payable Summary (in thousands) | Property | Maturity | Interest Rate | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :--------- | :------------ | :------------ | :------------------ | | Flatbush Gardens, Brooklyn, NY | 6/1/2032 | 3.125% | $329,000 | $329,000 | | 250 Livingston Street, Brooklyn, NY | 6/6/2029 | 3.63% | $125,000 | $125,000 | | 141 Livingston Street, Brooklyn, NY | 3/6/2031 | 3.21% | $100,000 | $100,000 | | Tribeca House, Manhattan, NY | 3/6/2028 | 4.506% | $360,000 | $360,000 | | Aspen, Manhattan, NY | 7/1/2028 | 3.68% | $58,573 | $59,403 | | Clover House, Brooklyn, NY | 12/1/2029 | 3.53% | $82,000 | $82,000 | | 10 West 65th Street, Manhattan, NY | 11/1/2027 | SOFR + 2.50% | - | $31,437 | | 1010 Pacific Street, Brooklyn, NY | 9/15/2025 | 5.55% | $60,000 | $60,000 | | 1010 Pacific Street, Brooklyn, NY | 9/15/2025 | 6.37% | $20,000 | $20,000 | | 953 Dean Street, Brooklyn, NY | 5/9/2027 | SOFR + 2.65% | $115,000 | - | | 953 Dean Street, Brooklyn, NY | 5/9/2027 | SOFR + 2.65% | $27,750 | - | | 953 Dean Street, Brooklyn, NY | 8/10/2026 | SOFR + 4.0% | - | $98,849 | | 953 Dean Street, Brooklyn, NY | 8/10/2026 | SOFR + 10.0% | - | $9,670 | | Total debt | | | $1,277,323 | $1,275,359 | | Unamortized debt issuance costs | | | $(9,152) | $(9,019) | | Total debt, net | | | $1,268,171 | $1,266,340 | - The City of New York intends to terminate its lease at 250 Livingston Street effective August 23, 2025, which provides **$15,400 thousand per annum** in rent[70](index=70&type=chunk)[72](index=72&type=chunk) - This termination has led to a cash management account requirement and alleged defaults under the **$125,000 thousand** mortgage loan[70](index=70&type=chunk)[72](index=72&type=chunk) - The lease at 141 Livingston Street expires December 27, 2025[75](index=75&type=chunk)[76](index=76&type=chunk)[84](index=84&type=chunk) - The Company is in a legal dispute with the lender regarding alleged defaults, including reserve payments and net worth covenants, and the lender has filed a lawsuit seeking foreclosure and a receiver[75](index=75&type=chunk)[76](index=76&type=chunk)[84](index=84&type=chunk) - The Company refinanced its Dean Street development loans on May 2, 2025, with new senior and mezzanine loans totaling **$141,750 thousand**, bearing interest at **1-Month CME Term SOFR plus 2.65%** (with a **2.25% floor**)[101](index=101&type=chunk)[102](index=102&type=chunk) Principal Payment Requirements (in thousands) | Year | Amount | | :---------------- | :------- | | 2025 (Remainder) | $80,839 | | 2026 | $1,732 | | 2027 | $145,647 | | 2028 | $416,555 | | 2029 | $209,571 | | Thereafter | $422,979 | | Total | $1,277,323 | [5. Rental Income under Operating Leases](index=25&type=section&id=5.%20Rental%20Income%20under%20Operating%20Leases) This section details future cash rents from commercial tenants and their contribution to total revenues Minimum Future Cash Rents Receivable from Commercial Tenants (in thousands) | Year | Amount | | :---------------- | :------- | | 2025 (Remainder) | $9,966 | | 2026 | $5,279 | | 2027 | $4,790 | | 2028 | $3,778 | | 2029 | $3,737 | | Thereafter | $22,479 | | Total | $50,029 | - Commercial leases with the City of New York comprised approximately **21% of total revenues** for the three and six months ended June 30, 2025[109](index=109&type=chunk) - The City of New York's lease at 250 Livingston Street, providing **$16 million per annum**, terminates August 23, 2025[109](index=109&type=chunk) - A five-year extension for 141 Livingston Street was agreed upon but is subject to lender approval and ongoing litigation[109](index=109&type=chunk) [6. Fair Value of Financial Instruments](index=25&type=section&id=6.%20Fair%20Value%20of%20Financial%20Instruments) This section discusses the fair value estimation of financial instruments, particularly notes payable - The fair value of notes payable, classified as Level 2, is estimated by discounting contractual cash flows using adjusted market interest rates[114](index=114&type=chunk) Carrying Amount and Estimated Fair Value of Notes Payable (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------------- | :------------ | :------------------ | | Carrying amount (excluding unamortized debt issuance costs) | $1,277,323 | $1,275,359 | | Estimated fair value | $1,245,003 | $1,209,629 | [7. Commitments and Contingencies](index=26&type=section&id=7.%20Commitments%20and%20Contingencies) This section outlines the company's legal proceedings, claims, and capital improvement commitments - The Company is involved in several legal proceedings related to rent stabilization laws (Kuzmich, Crowe, Horn cases) at its Tribeca House property, with accrued overcharges and attorney fees totaling **$2,700 thousand** in 2021, and an additional **$175 thousand** for plaintiffs and **$94 thousand** for attorney fees accrued in 2024[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) - A class action complaint (Sanchez case) alleges failure to pay overtime and provide wage statements, for which the Company cannot estimate a loss[121](index=121&type=chunk) - The Company is disputing a **$1,152 thousand claim** from the NYC Department of Citywide Administrative Services for operating expense escalation charges, with NYC withholding rent to satisfy the claim[122](index=122&type=chunk) - A lawsuit was filed by Wells Fargo Bank against the 141 Livingston Street property owner and guarantors, seeking property sale and receiver appointment due to alleged loan defaults[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - The court denied the receiver motion, but the litigation is ongoing[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - The Company is committed to performing capital improvements at Flatbush Gardens, estimated up to **$27 million** over three years, with approximately **$17 million** spent through June 30, 2025[127](index=127&type=chunk) [8. Related-Party Transactions](index=30&type=section&id=8.%20Related-Party%20Transactions) This section details transactions and expenses involving related parties of the company Related-Party Office and Overhead Expenses (in thousands) | Period | Office and Overhead Expenses | Reimbursable Payroll Expense | | :----------------------------- | :--------------------------- | :--------------------------- | | Three months ended June 30, 2025 | $120 | $(89) | | Three months ended June 30, 2024 | $148 | $(23) | | Six months ended June 30, 2025 | $178 | $(135) | | Six months ended June 30, 2024 | $197 | $(37) | [9. Segment Reporting](index=30&type=section&id=9.%20Segment%20Reporting) This section presents financial information by the company's operating segments: residential and commercial rentals - The Company classifies its operations into two reportable segments: Commercial Rental Properties and Residential Rental Properties, which include various properties in Manhattan and Brooklyn[132](index=132&type=chunk)[134](index=134&type=chunk) Segment Revenues (in thousands) | Period | Commercial Rental Income | Residential Rental Income | Total Revenues | | :----------------------------- | :----------------------- | :------------------------ | :------------- | | Three months ended June 30, 2025 | $9,982 | $29,054 | $39,036 | | Three months ended June 30, 2024 | $9,598 | $27,748 | $37,346 | | Six months ended June 30, 2025 | $20,190 | $58,244 | $78,434 | | Six months ended June 30, 2024 | $19,252 | $53,854 | $73,106 | Segment Income (Loss) from Operations (in thousands) | Period | Commercial Income from Operations | Residential Income from Operations | Total Income from Operations | | :----------------------------- | :-------------------------------- | :--------------------------------- | :--------------------------- | | Three months ended June 30, 2025 | $3,492 | $7,316 | $10,808 | | Three months ended June 30, 2024 | $3,866 | $6,132 | $9,998 | | Six months ended June 30, 2025 | $7,157 | $(19,930) | $(12,773) | | Six months ended June 30, 2024 | $7,614 | $11,456 | $19,070 | Segment Total Assets (in thousands) | Date | Commercial Assets | Residential Assets | Total Assets | | :---------------- | :---------------- | :----------------- | :----------- | | June 30, 2025 | $313,744 | $926,579 | $1,241,323 | | December 31, 2024 | $315,296 | $971,669 | $1,286,965 | Segment Capital Expenditures (in thousands) | Period | Commercial Capital Expenditures | Residential Capital Expenditures | Total Capital Expenditures | | :----------------------------- | :------------------------------ | :------------------------------- | :------------------------- | | Three months ended June 30, 2025 | $788 | $9,680 | $10,468 | | Three months ended June 30, 2024 | $1,230 | $21,601 | $22,831 | | Six months ended June 30, 2025 | $1,422 | $20,327 | $21,749 | | Six months ended June 30, 2024 | $2,249 | $41,320 | $43,769 | [10. Impairment of long-lived assets](index=33&type=section&id=10.%20Impairment%20of%20long-lived%20assets) This section details the impairment loss recognized on the 10 West 65th Street property - On March 31, 2025, the Company recorded an impairment loss of **$33,780 thousand** on its 10 West 65th Street property, classified as an asset held for sale, based on its estimated selling price less costs to sell[139](index=139&type=chunk)[140](index=140&type=chunk) [11. Subsequent Events](index=33&type=section&id=11.%20Subsequent%20Events) This section reports significant events that occurred after the reporting period, such as declared distributions - On August 7, 2025, the Company declared distributions totaling **$4,614 thousand** on its common shares, Class B LLC units, and LTIP units[141](index=141&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=34&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the Company's financial condition and operational results, highlighting revenue drivers, market trends, and a detailed analysis of income statement changes. It also discusses liquidity, capital resources, and non-GAAP financial measures [Overview of Our Company](index=34&type=section&id=Overview%20of%20Our%20Company) This section describes the company's structure, property portfolio, and operating model - Clipper Realty Inc. is a self-administered and self-managed REIT focused on acquiring, owning, managing, operating, and repositioning multifamily residential and commercial properties in the New York metropolitan area[143](index=143&type=chunk) - The Company's portfolio includes properties in Tribeca, East Flatbush, Downtown Brooklyn, and Prospect Heights, with a redevelopment project at Dean Street[147](index=147&type=chunk) - The Company's ownership interest in its initial portfolio (Tribeca House, Flatbush Gardens, Livingston Street properties) entitles it to **37.9%** of aggregate distributions from LLC subsidiaries, with continuing investors holding **62.1%** through Class B LLC units[146](index=146&type=chunk) [How We Derive Our Revenue](index=35&type=section&id=How%20We%20Derive%20Our%20Revenue) This section explains the primary sources of the company's revenue - Revenue is primarily derived from residential, commercial, and retail tenants, categorized into two reportable segments: Residential Rental Properties and Commercial Rental Properties[148](index=148&type=chunk) [Trends](index=35&type=section&id=Trends) This section discusses key market and operational trends affecting the company's performance - Residential properties experienced elevated occupancy and rental rate growth in Q2 2025 due to a **robust New York metro area rental market**[149](index=149&type=chunk) Average Residential Rent Per Square Foot | Property | June 30, 2025 | June 30, 2024 | | :---------------- | :------------ | :------------ | | Tribeca House | $85.60 | $80.93 | | Flatbush Gardens | $31.27 | $28.10 | | Clover House | $87.76 | $83.68 | - The City of New York will vacate 250 Livingston Street on August 23, 2025, leading to an expected loss of approximately **$16 million per annum** in combined rental income and reimbursements[150](index=150&type=chunk) - The lease extension for 141 Livingston Street with the City of New York is subject to lender approval and ongoing litigation, posing a risk of not replacing the tenant at comparable rents[151](index=151&type=chunk) - The weighted average interest rate on the Company's debt was approximately **4.2% per annum** as of June 30, 2025[151](index=151&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance over the reporting periods [Income Statement for the Three Months Ended June 30, 2025, and 2024](index=36&type=section&id=Income%20Statement%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025%2C%20and%202024) This section compares the company's income statement performance for the three months ended June 30, 2025, and 2024 Three Months Ended June 30, 2025 vs. 2024 (Excluding 10 West 65th Street, in thousands) | Metric | 2025 (Excl. 10 West 65th) | 2024 (Excl. 10 West 65th) | Increase (decrease) | % Change | | :-------------------------------- | :------------------------ | :------------------------ | :------------------ | :--------- | | Residential rental income | $28,363 | $26,709 | $1,654 | 6.2% | | Commercial rental income | $9,979 | $9,595 | $384 | 4.0% | | Total revenues | $38,342 | $36,304 | $2,038 | 5.6% | | Property operating expenses | $9,446 | $8,780 | $666 | 7.6% | | Real estate taxes and insurance | $7,333 | $7,165 | $168 | 2.3% | | General and administrative | $3,732 | $3,379 | $353 | 10.4% | | Depreciation and amortization | $7,314 | $7,163 | $151 | 2.1% | | Income from operations | $10,501 | $9,817 | $684 | 7.0% | | Net loss | $(656) | $(1,279) | $623 | 48.7% | - Residential rental income increased by **6.2%** due to higher rental rates and leased occupancy, particularly at Tribeca House (from **$80.93 to $85.60 per sq ft**) and Flatbush Gardens (from **$28.10 to $31.27 per sq ft**)[156](index=156&type=chunk) - Property operating expenses increased by **7.6%** primarily due to higher tenant legal and payroll costs at Flatbush Gardens, partially offset by lower utilities[158](index=158&type=chunk) [Income Statement for the Six Months Ended June 30, 2025 and 2024](index=38&type=section&id=Income%20Statement%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the company's income statement performance for the six months ended June 30, 2025, and 2024 Six Months Ended June 30, 2025 vs. 2024 (Excluding 10 West 65th Street, in thousands) | Metric | 2025 (Excl. 10 West 65th) | 2024 (Excl. 10 West 65th) | Increase (decrease) | % Change | | :-------------------------------- | :------------------------ | :------------------------ | :------------------ | :--------- | | Residential rental income | $56,483 | $51,805 | $4,678 | 9.0% | | Commercial rental income | $20,183 | $19,245 | $938 | 4.9% | | Total revenues | $76,666 | $71,050 | $5,616 | 7.9% | | Property operating expenses | $19,357 | $17,203 | $2,154 | 12.5% | | Real estate taxes and insurance | $14,682 | $14,029 | $653 | 4.7% | | General and administrative | $7,438 | $6,806 | $632 | 9.3% | | Depreciation and amortization | $14,660 | $14,250 | $410 | 2.9% | | Income from operations | $20,513 | $18,762 | $1,751 | 9.3% | | Net loss | $(1,607) | $(3,425) | $1,818 | 53.1% | - Residential rental income increased by **9.0%** due to higher rental rates and occupancy, while commercial rental income rose by **4.9%** from escalation income and new leases[164](index=164&type=chunk)[165](index=165&type=chunk) - Property operating expenses increased by **12.5%** due to higher tenant legal, supplies, and payroll costs at Flatbush Gardens and increased utilities, partially offset by lower repair and maintenance costs[166](index=166&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its financial obligations and fund its operations and investments [Short-Term and Long-Term Liquidity Needs](index=39&type=section&id=Short-Term%20and%20Long-Term%20Liquidity%20Needs) This section outlines the company's immediate and future capital requirements - As of June 30, 2025, the Company had **$1,268 million** in indebtedness (net), **$32,029 thousand** in cash and cash equivalents, and **$28,809 thousand** in restricted cash[171](index=171&type=chunk) - Short-term liquidity needs are expected to be met by cash from operations and on hand[173](index=173&type=chunk) - Long-term needs for acquisitions, renovations, and debt payments will require additional capital from equity offerings and secured/unsecured debt[173](index=173&type=chunk) - Proceeds from the sale of 10 West 65th Street (approximately **$13,000 thousand net**) and a **$160 million bridge loan** for the Dean Street property (with **$141,750 thousand drawn**) contribute to long-term liquidity[173](index=173&type=chunk) [Distributions](index=41&type=section&id=Distributions) This section details the company's dividend and distribution policies and payments - As a REIT, the Company must distribute at least **90% of its taxable income** annually[177](index=177&type=chunk) Dividends and Distributions Paid (in thousands) | Period | Amount | | :----------------------------- | :------- | | Three months ended June 30, 2025 | $9,200 | | Three months ended June 30, 2024 | $8,800 | | May 7, 2025 (declared) | $4,600 | [Cash Flows for the Six Months Ended June 30, 2025 and 2024](index=41&type=section&id=Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section analyzes the company's cash flow activities for the six months ended June 30, 2025, and 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Operating activities | $15,044 | $15,044 | | Investing activities | $17,967 | $(42,051) | | Financing activities | $(10,225) | $27,526 | - Net cash from investing activities increased significantly due to proceeds from the sale of 10 West 65th Street and decreased capital spending at the Dean Street development[180](index=180&type=chunk) - Net cash used in financing activities was primarily due to mortgage loan repayments (**$31,438 thousand**) and dividend payments (**$9,227 thousand**), partially offset by Dean Street property borrowings (**$34,231 thousand**)[181](index=181&type=chunk) [Income Taxes](index=41&type=section&id=Income%20Taxes) This section explains the company's income tax position and REIT status - No provision for income taxes is made as the Company operates as a REIT and holds operations in pass-through entities, meaning income or loss is included in partners' or members' individual tax returns[182](index=182&type=chunk)[183](index=183&type=chunk) [Inflation](index=42&type=section&id=Inflation) This section discusses the impact of inflation on the company's operations and financial results - Inflation has increased property acquisition, development, replacement, and operating costs[184](index=184&type=chunk) - The Company's residential leases are short-term, allowing for rent increases to recover costs, and commercial leases generally permit recovery of some operating costs[184](index=184&type=chunk) [Non-GAAP Financial Measures](index=42&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations and explanations for non-GAAP financial measures used by management [Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO)](index=42&type=section&id=Funds%20From%20Operations%20and%20Adjusted%20Funds%20From%20Operations) This section defines and reconciles FFO and AFFO to net loss - FFO is defined by NAREIT as net income excluding gains/losses from property sales and impairment, plus depreciation and amortization[187](index=187&type=chunk)[188](index=188&type=chunk) - AFFO further adjusts FFO for items like amortization of intangibles, straight-line rent, debt origination costs, and recurring capital spending[187](index=187&type=chunk)[188](index=188&type=chunk) FFO and AFFO Reconciliation to Net Loss (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(1,356) | $(1,743) | $(36,459) | $(4,410) | | Real estate depreciation and amortization | $7,314 | $7,455 | $14,950 | $14,834 | | **FFO** | **$5,958** | **$5,712** | **$(21,509)** | **$10,424** | | Amortization of real estate tax intangible | $121 | $121 | $241 | $241 | | Straight-line rent adjustments | $37 | $38 | $59 | $87 | | Amortization of debt origination costs | $457 | $530 | $914 | $1,061 | | Amortization of LTIP awards | $1,078 | $713 | $2,221 | $1,274 | | Recurring capital spending | $(34) | $(61) | $(69) | $(134) | | Loss on impairment of long-lived assets | — | — | $33,780 | — | | Loss on disposal of long-lived assets | $685 | — | $685 | — | | Transaction pursuit costs | $(10) | — | $(10) | — | | Litigation settlement and other | $26 | — | $26 | — | | **AFFO** | **$8,318** | **$7,053** | **$16,338** | **$12,953** | - FFO for the six months ended June 30, 2025, was **$(21,509) thousand**, a significant decrease from **$10,424 thousand** in the prior year, primarily due to the **loss on impairment of long-lived assets**[191](index=191&type=chunk) [Adjusted Earnings Before Interest, Income Taxes, Depreciation and Amortization (Adjusted EBITDA)](index=43&type=section&id=Adjusted%20Earnings%20Before%20Interest%2C%20Income%20Taxes%2C%20Depreciation%20and%20Amortization) This section defines and reconciles Adjusted EBITDA to net loss - Adjusted EBITDA is defined as net loss before non-controlling interests, plus real estate depreciation and amortization, amortization of intangibles, straight-line rent adjustments, non-cash equity compensation, net interest expense, and other specific non-operating items[192](index=192&type=chunk) Adjusted EBITDA Reconciliation to Net Loss (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(1,356) | $(1,743) | $(36,459) | $(4,410) | | Real estate depreciation and amortization | $7,314 | $7,455 | $14,950 | $14,834 | | Amortization of real estate tax intangible | $121 | $121 | $241 | $241 | | Straight-line rent adjustments | $37 | $38 | $59 | $87 | | Amortization of LTIP awards | $1,078 | $713 | $2,221 | $1,274 | | Interest expense, net | $11,479 | $11,741 | $23,001 | $23,480 | | Transaction pursuit costs | $(10) | — | $(10) | — | | Loss on impairment of long-lived assets | — | — | $33,780 | — | | Loss on disposal of long-lived assets | $685 | — | $685 | — | | Litigation settlement and other | $26 | — | $26 | — | | **Adjusted EBITDA** | **$19,374** | **$18,325** | **$38,494** | **$35,506** | [Net Operating Income (NOI)](index=44&type=section&id=Net%20Operating%20Income) This section defines and reconciles Net Operating Income (NOI) to income from operations - NOI is defined as income from operations plus real estate depreciation and amortization, general and administrative expenses, transaction pursuit costs, amortization of identifiable intangibles, straight-line rent adjustments, impairment losses, and litigation settlement[196](index=196&type=chunk) NOI Reconciliation to Income from Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income from operations | $10,808 | $9,998 | $(12,773) | $19,070 | | Real estate depreciation and amortization | $7,314 | $7,455 | $14,950 | $14,834 | | General and administrative expenses | $3,819 | $3,459 | $7,644 | $7,010 | | Transaction pursuit costs | $(10) | — | $(10) | — | | Amortization of real estate tax intangible | $121 | $121 | $241 | $241 | | Straight-line rent adjustments | $37 | $38 | $59 | $87 | | Loss on impairment of long-lived assets | — | — | $33,780 | — | | Litigation Settlement and other | $26 | — | $26 | — | | **NOI** | **$22,115** | **$21,071** | **$43,917** | **$41,242** | [Critical Accounting Policies](index=44&type=section&id=Critical%20Accounting%20Policies) This section highlights the company's critical accounting policies and estimates - Management's discussion and analysis relies on estimates and judgments affecting reported amounts, with no material changes to critical accounting policies disclosed in the 2024 Annual Report on Form 10-K[198](index=198&type=chunk) [Recent Accounting Pronouncements](index=46&type=section&id=Recent%20Accounting%20Pronouncements) This section discusses the impact of recently adopted and issued accounting pronouncements - The Company adopted ASU 2023-07 (Improvements to Reportable Segment Disclosures) in 2024 with no material impact[64](index=64&type=chunk)[65](index=65&type=chunk) - It is evaluating ASU 2024-03 (Expense Disaggregation Disclosures), effective 2027[64](index=64&type=chunk)[65](index=65&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=46&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section discusses the Company's exposure to market risks, primarily interest rate fluctuations, and the measures taken to mitigate these risks - The Company's primary market risk is interest rate fluctuations[200](index=200&type=chunk)[201](index=201&type=chunk) - A **one percent change in interest rates** on its **$142.8 million variable rate debt** would impact annual net loss by approximately **$1.4 million**[200](index=200&type=chunk)[201](index=201&type=chunk) - As of June 30, 2025, the Company had an interest rate cap with US Bank, capping the SOFR portion of the interest rate on the 953 Dean Street Loans at **6%**[201](index=201&type=chunk) Fair Value of Notes Payable (in millions) | Date | Fair Value | | :---------------- | :--------- | | June 30, 2025 | $1,245.0 | | December 31, 2024 | $1,160.4 | [ITEM 4. CONTROLS AND PROCEDURES](index=46&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[202](index=202&type=chunk) - There were no changes in internal control over financial reporting during the period that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[204](index=204&type=chunk) PART II – OTHER INFORMATION This section presents other information, including legal proceedings, risk factors, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=46&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 7 of the condensed consolidated financial statements for a discussion of legal proceedings, which include ongoing rent stabilization lawsuits and a mortgage foreclosure lawsuit - Legal proceedings are detailed in Note 7, 'Commitments and Contingencies,' covering rent overcharge cases and a mortgage foreclosure lawsuit related to the 141 Livingston Street property[205](index=205&type=chunk) [ITEM 1A. RISK FACTORS](index=47&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section updates the risk factors from the Annual Report on Form 10-K, focusing on the significant risks associated with the Company's commercial leases with the City of New York and potential conflicts of interest with management's outside business activities - The Company is highly dependent on **two commercial leases** with the City of New York, which represent approximately **21% of total revenues**[206](index=206&type=chunk)[207](index=207&type=chunk) - One lease terminates August 23, 2025 (250 Livingston Street), and the other expires December 27, 2025 (141 Livingston Street)[206](index=206&type=chunk)[207](index=207&type=chunk) - The termination of the 250 Livingston Street lease could result in a loss of **$15.4 million per annum** and has led to alleged defaults on the **$125 million mortgage loan**, including cash management account requirements[208](index=208&type=chunk)[209](index=209&type=chunk) - The 141 Livingston Street lease expiration in December 2025, coupled with ongoing litigation and alleged loan defaults, could require funding a **$10 million reserve** or letter of credit if the lease is not extended[211](index=211&type=chunk)[213](index=213&type=chunk)[215](index=215&type=chunk) - Conflicts of interest may arise due to senior management's outside business interests and an Investment Policy that does not require them to present certain investment opportunities to the Company[227](index=227&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk) [250 Livingston Street Property](index=47&type=section&id=250%20Livingston%20Street%20Property) This section details risks associated with the termination of the 250 Livingston Street lease and loan defaults - The City of New York's lease at 250 Livingston Street, providing **$15.4 million per annum**, terminates August 23, 2025[208](index=208&type=chunk) - The Company faces risks of not replacing the tenant at comparable rates or incurring substantial costs to improve the vacated space[208](index=208&type=chunk) - Alleged defaults on the **$125 million mortgage loan** for 250 Livingston Street include failure to deposit all revenue into a cash management account and a dispute over the Company's net worth covenant[209](index=209&type=chunk) - While the net worth issue was resolved, the revenue deposit issue was re-alleged[209](index=209&type=chunk) [141 Livingston Street Property](index=48&type=section&id=141%20Livingston%20Street%20Property) This section outlines risks related to the 141 Livingston Street lease expiration, loan defaults, and ongoing litigation - The 141 Livingston Street lease expires December 27, 2025[211](index=211&type=chunk)[213](index=213&type=chunk) - Failure to extend or replace the lease for a minimum five-year term would require funding a **$10 million reserve account** or delivering a letter of credit[211](index=211&type=chunk)[213](index=213&type=chunk) - The Company is in a dispute with the special servicer over alleged defaults on the **$100 million loan**, including reserve payments, net worth covenants, and insurance compliance[214](index=214&type=chunk)[215](index=215&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk) - The servicer has accelerated the loan and demanded payment of principal, default premiums, and penalties[214](index=214&type=chunk)[215](index=215&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk) - A lawsuit has been filed by Wells Fargo Bank seeking the sale of the property and appointment of a receiver[221](index=221&type=chunk)[222](index=222&type=chunk)[224](index=224&type=chunk) - While the court denied the initial receiver motion, the litigation is ongoing, and an appeal has been filed[221](index=221&type=chunk)[222](index=222&type=chunk)[224](index=224&type=chunk) - A five-year lease extension with NYC was agreed upon but rejected by the Company due to conditions imposed by the loan special servicer, making the lease approval uncertain and subject to the ongoing litigation[223](index=223&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=51&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section states that there were no unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities or use of proceeds occurred during the reporting period[231](index=231&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=51&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section refers to Note 4 of the condensed consolidated financial statements for information regarding defaults upon senior securities, specifically related to the 141 Livingston Street and 250 Livingston Street properties - Information regarding defaults upon senior securities is provided in Note 4, 'Notes Payable,' specifically concerning the 141 Livingston Street and 250 Livingston Street properties[231](index=231&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=51&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section indicates that mine safety disclosures are not applicable to the Company's operations - Mine safety disclosures are not applicable[232](index=232&type=chunk) [ITEM 5. OTHER INFORMATION](index=51&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section states that there is no other information to report - No other information is reported in this section[233](index=233&type=chunk) [ITEM 6. EXHIBITS](index=51&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including agreements related to property sales, incentive compensation plans, loan agreements, and certifications - Exhibits include the Purchase and Sale Agreement for 10 West 65th Street, 2025 Omnibus Incentive Compensation Plan, 2025 Non-Employee Director Plan, Dean Owner LLC Multifamily Loan and Security Agreement, and various certifications[234](index=234&type=chunk) SIGNATURES This section contains the official signatures of the company's executive officers - The report is signed by David Bistricer, Co-Chairman and Chief Executive Officer, and Lawrence E. Kreider, Chief Financial Officer, on August 7, 2025[238](index=238&type=chunk)

Financial Data and Key Metrics Changes - The company reported near record quarterly revenue of $39 million, a 4.5% increase from $37.3 million last year [8][12] - Record net operating income (NOI) of $22.1 million, a 5% increase from $21.1 million last year [8][12] - Record adjusted funds from operations (AFFO) of $8.3 million, a 17% increase from $7.1 million last year [8][12] Business Line Data and Key Metrics Changes - Residential revenue increased to $29.1 million, up by $1.3 million due to strong leasing across all properties [12] - Commercial revenue rose by $400,000 due to filling smaller retail vacancies at Tribeca House and Aspen properties [12] Market Data and Key Metrics Changes - Overall rents are at all-time highs, with new leases exceeding prior rents by over 14% across the entire portfolio [5][9] - Rent collections across the portfolio remained strong, with an overall collection rate of approximately 97% [11] Company Strategy and Development Direction - The company is focused on optimizing occupancy, pricing, and expenses to position itself for growth [11] - The company plans to continue leasing the newly completed Prospect House development and finalize the lease at 141 Livingston Street [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong residential leasing demand due to constrained rental housing supply [9] - The company anticipates continued operating improvements throughout 2025 [17] Other Important Information - The company refinanced the construction loan for the Prospect House development, providing excess proceeds for interest and operating expenses [6] - A dividend of $0.95 per share was announced for the second quarter, consistent with the previous quarter [17] Q&A Session Summary - There were no questions during the Q&A session, and the management team concluded the call [20][22]

分组1 - Clipper Realty Inc. reported quarterly funds from operations (FFO) of $0.2 per share, exceeding the Zacks Consensus Estimate of $0.15 per share, and showing an increase from $0.17 per share a year ago, resulting in an FFO surprise of +33.33% [1] - The company posted revenues of $39.04 million for the quarter ended June 2025, which was a slight miss compared to the Zacks Consensus Estimate by 0.16%, but an increase from $37.35 million year-over-year [2] - Clipper Realty has consistently surpassed consensus FFO estimates over the last four quarters, while it has not been able to beat consensus revenue estimates during the same period [2] 分组2 - The stock has underperformed, losing about 21.8% since the beginning of the year, while the S&P 500 has gained 7.9% [3] - The current consensus FFO estimate for the upcoming quarter is $0.13 on revenues of $37.3 million, and for the current fiscal year, it is $0.57 on revenues of $150.9 million [7] - The Zacks Industry Rank for REIT and Equity Trust - Other is currently in the top 40% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

[Second Quarter 2025 Financial and Operating Results](index=1&type=section&id=Second%20Quarter%202025%20Financial%20and%20Operating%20Results) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the second quarter of 2025, Clipper Realty reported strong top-line growth, with revenues increasing 4.5% to $39.0 million and Net Operating Income (NOI) rising 5% to a record $22.1 million. Adjusted Funds From Operations (AFFO) saw a significant 18% increase to $8.3 million. However, the company recorded a net loss of $1.4 million, or $0.7 million when excluding an impairment charge related to a property sale Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenues** | $39.0 million | $37.3 million | +4.5% | | **Net Operating Income (NOI)** | $22.1 million | $21.1 million | +5.0% | | **Adjusted FFO (AFFO)** | $8.3 million | $7.1 million | +18.0% | | **AFFO per Share** | $0.20 | $0.17 | +17.6% | | **Net Loss** | ($1.4 million) | ($1.7 million) | N/A | | **Net Loss (ex-impairment)** | ($0.7 million) | ($1.7 million) | N/A | - Revenue growth was driven by a **$1.3 million (5.0%) increase** in residential rental income due to higher rental rates and occupancy, and a **$0.4 million (4.2%) increase** in commercial income[3](index=3&type=chunk) - The net loss of **$1.4 million** included a **$0.7 million impairment charge** related to the sale of the 10 West 65th Street property[4](index=4&type=chunk) [Operational and Strategic Updates](index=1&type=section&id=Operational%20and%20Strategic%20Updates) The company maintained strong operational performance with high occupancy and renter demand, achieving significant rent increases on new and renewal leases. Key strategic activities included completing the Dean Street development and its bridge financing, selling the 10W 65th Street property to generate cash, and actively managing its commercial portfolio, including the upcoming vacancy at 250 Livingston Street - Residential leasing remains very strong, with new leases achieving rent increases of nearly **14%** and renewals over **6%**[2](index=2&type=chunk) - The Dean Street ground-up development construction is complete, leasing has begun, and a new bridge financing was secured to reduce interest costs and provide working capital[2](index=2&type=chunk) - The 10W 65th Street property was sold, generating nearly **$13 million** in cash[2](index=2&type=chunk) - The company is actively seeking solutions for the 250 Livingston Street property, which New York City will vacate in August 2025, while a lease renewal with the city has been agreed upon for the 141 Livingston Street property[2](index=2&type=chunk) [Balance Sheet and Financing Activities](index=2&type=section&id=Balance%20Sheet%20and%20Financing%20Activities) As of June 30, 2025, notes payable stood at $1.28 billion. Key financing activities during the quarter included securing a new $160 million, two-year bridge loan for the Dean Street property at a lower interest rate, which was used to repay the existing construction loan. Additionally, the company retired $31.2 million of debt following the sale of the 10 West 65th Street property - Notes payable increased slightly to **$1,277.3 million** at June 30, 2025, from **$1,275.4 million** at December 31, 2024[8](index=8&type=chunk) - A new **$160 million** bridge loan was secured for the Dean Street property, featuring a lower interest rate (**2.65% over SOFR**) and providing funds for lease-up and working capital[8](index=8&type=chunk) - The sale of the 10 West 65th Street property for **$43.6 million (net)** allowed the company to retire **$31.2 million** of the property's debt[8](index=8&type=chunk) [Dividend Declaration](index=2&type=section&id=Dividend%20Declaration) The company has declared a second-quarter dividend of $0.095 per share, consistent with the previous quarter. The dividend is payable on September 5, 2025, to shareholders of record on August 21, 2025 Q2 2025 Dividend Information | Metric | Value | | :--- | :--- | | **Dividend per Share** | $0.095 | | **Record Date** | August 21, 2025 | | **Payment Date** | September 5, 2025 | [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to $1.24 billion from $1.29 billion at year-end 2024, primarily due to a reduction in net investment in real estate following a property sale. Total liabilities remained stable at approximately $1.30 billion, leading to an increased total equity deficit of $57.7 million Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$1,241,323** | **$1,286,965** | | Investment in real estate, net | $1,157,464 | $1,228,528 | | Cash and cash equivalents | $32,029 | $19,896 | | **Total Liabilities** | **$1,299,019** | **$1,301,195** | | Notes payable, net | $1,268,171 | $1,266,340 | | **Total Equity (Deficit)** | **($57,696)** | **($14,230)** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, total revenues grew to $39.0 million from $37.3 million in the prior year. Despite higher income from operations, the company reported a net loss of $1.4 million, compared to a $1.7 million net loss in Q2 2024, influenced by a loss on disposal of assets Q2 Statement of Operations Highlights (in thousands) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Total Revenues** | **$39,036** | **$37,346** | | Total Operating Expenses | $28,202 | $27,348 | | **Income from Operations** | **$10,808** | **$9,998** | | Interest Expense, net | ($11,479) | ($11,741) | | **Net Loss** | **($1,356)** | **($1,743)** | | **Net Loss per Share** | **($0.07)** | **($0.06)** | [Consolidated Statements of Cash Flows](index=5&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities was $15.0 million. Investing activities provided $18.0 million in cash, primarily from the $43.5 million proceeds from a real estate sale, offset by capital expenditures. Financing activities used $10.2 million, mainly for dividends and net debt activities. This resulted in a significant increase in total cash and restricted cash to $60.8 million Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | **$15,044** | **$15,044** | | **Net Cash from Investing Activities** | **$17,967** | **($42,051)** | | **Net Cash from Financing Activities** | **($10,225)** | **$27,526** | | Net Increase in Cash | $22,786 | $519 | | **Cash and Restricted Cash (End of Period)** | **$60,838** | **$36,744** | [Reconciliation of Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) [Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO)](index=7&type=section&id=Funds%20From%20Operations%20(FFO)%20and%20Adjusted%20Funds%20From%20Operations%20(AFFO)) In Q2 2025, FFO increased to $6.0 million from $5.7 million in Q2 2024. After adjustments for items like amortization and non-cash compensation, AFFO grew more substantially by 18% to $8.3 million, or $0.20 per share, up from $7.1 million, or $0.17 per share, in the prior-year period FFO and AFFO Reconciliation Summary (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Loss | ($1,356) | ($1,743) | | Real estate depreciation & amortization | $7,314 | $7,455 | | **FFO** | **$5,958** | **$5,712** | | Adjustments | $2,360 | $1,341 | | **AFFO** | **$8,318** | **$7,053** | | **AFFO Per Share/Unit** | **$0.20** | **$0.17** | [Adjusted EBITDA](index=9&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 was $19.4 million, an increase from $18.3 million in Q2 2024. The reconciliation from net loss primarily involves adding back interest expense, depreciation, and amortization Adjusted EBITDA Reconciliation Summary (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Loss | ($1,356) | ($1,743) | | Interest expense, net | $11,479 | $11,741 | | Real estate depreciation & amortization | $7,314 | $7,455 | | Other Adjustments | $1,937 | $872 | | **Adjusted EBITDA** | **$19,374** | **$18,325** | [Net Operating Income (NOI)](index=9&type=section&id=Net%20Operating%20Income%20(NOI)) Net Operating Income (NOI) for Q2 2025 reached a record $22.1 million, a 5% increase from $21.1 million in the same period last year. This non-GAAP measure is derived by adjusting income from operations for depreciation, general and administrative expenses, and other items NOI Reconciliation Summary (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Income from operations | $10,808 | $9,998 | | Real estate depreciation & amortization | $7,314 | $7,455 | | General and administrative expenses | $3,819 | $3,459 | | Other Adjustments | $174 | $159 | | **NOI** | **$22,115** | **$21,071** |

Finally, we should also recognize that APLE has a P/CF ratio of 7.37. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. APLE's current P/CF looks attractive when compared to its industry's average P/CF of 15.28. Over the past year, APLE's P/CF has been as high as 9.97 and as low as 6.68, with a median of 8.68. Apple Hospitality REIT (APLE) is a stock many investors are watching right now. APLE is currently s ...

Group 1 - The article discusses the author's transition from selling a significant portion of EPR Properties stock to seeking new investment opportunities, particularly in high-yield Real Estate Investment Trusts (REITs) that offer stable passive income and potential mean reversion [1] - The author emphasizes a focus on value and income-oriented strategies in the selection of REITs, applying fundamental economic insights to assess market trends [1] Group 2 - The author identifies a strong interest in income investing, particularly in the context of the economic landscape shaped by the COVID-19 pandemic [1]

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