Clipper Realty Inc. (NYSE:CLPR) Q4 2023 Earnings Conference Call March 14, 2024 5:00 PM ET Company Participants Larry Kreider - CFO David Bistricer - Co-Chairman and CEO JJ Bistricer - COO Conference Call Participants Buck Horne - Raymond James Larry Kreider Good afternoon and thank you for joining us for the Fourth Quarter 2023 Clipper Realty Inc. Earnings Conference Call. Participating with me on today's call are David Bistricer, Co-Chairman of the Board and Chief Executive Officer; and JJ Bistricer, Chie ...

Clipper Realty Inc. (CLPR) came out with quarterly funds from operations (FFO) of $0.15 per share, missing the Zacks Consensus Estimate of $0.16 per share. This compares to FFO of $0.11 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of -6.25%. A quarter ago, it was expected that this company would post FFO of $0.17 per share when it actually produced FFO of $0.15, delivering a surprise of -11.76%.Over the last four quarters, the comp ...

Clipper Realty Inc. Announces Fourth Quarter 2023 Results Financial Results for the Three Months Ended December 31, 2023 At December 31, 2023, notes payable (excluding unamortized loan costs) was $1,219.0 million, compared to $1,171.2 million at December 31, 2022. The increase was primarily due to the permanent financing on the Pacific House loan entered in 2023 and draws made on Dean Street development in the fourth quarter of 2023. Clipper Realty Inc. (NYSE: CLPR) is a self-administered and self-managed r ...

PART I [Business](index=7&type=section&id=Item%201.%20Business) Clipper Realty Inc. is a self-managed REIT focused on acquiring, owning, and operating multifamily and commercial properties in Manhattan and Brooklyn - The company is a REIT focused on multifamily and commercial real estate in the New York metropolitan area, specifically Manhattan and Brooklyn[31](index=31&type=chunk) - Core business strategies include increasing below-market rents, opportunistic acquisitions, proactive management to boost occupancy and rental rates, and selective redevelopment of properties[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) - The company's portfolio as of year-end 2023 includes notable properties such as Flatbush Gardens, Tribeca House, 141 Livingston Street, and 250 Livingston Street[33](index=33&type=chunk)[35](index=35&type=chunk) Revenue and Tenant Concentration (as of Dec 31, 2023) | Metric | Value | | :--- | :--- | | **Revenue from Residential Rents** | ~70% | | **Revenue from Commercial/Retail Rents** | ~30% | | **Portfolio Sq. Ft. Leased by NYC Agencies** | ~16% | | **Annualized Rent from NYC Agencies** | ~19% | [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks concentrated in real estate, business operations, organizational structure, indebtedness, and its REIT status [Risks Related to Real Estate](index=12&type=section&id=Risks%20Related%20to%20Real%20Estate) - All company properties are located in New York City (Manhattan and Brooklyn), creating significant exposure to adverse local economic conditions, regulatory changes like the Housing Stability and Tenant Protection Act of 2019, and other localized risks[58](index=58&type=chunk)[344](index=344&type=chunk) - The company is heavily dependent on agencies of the City of New York as a single government tenant. The City of New York has notified the company of its intent to terminate its lease at the 250 Livingston Street property effective August 23, 2025, which will make **342,496 sq. ft. of commercial space** available and could adversely affect financial results[59](index=59&type=chunk)[319](index=319&type=chunk)[324](index=324&type=chunk) - New York's rent stabilization regulations, particularly the Housing Stability and Tenant Protection Act of 2019, limit the company's ability to raise rents on regulated units, potentially impairing the value of its portfolio[56](index=56&type=chunk)[342](index=342&type=chunk)[343](index=343&type=chunk) - The company engages in development and redevelopment activities (e.g., 1010 Pacific Street, Dean Street), exposing it to risks such as financing availability, regulatory approvals, cost overruns, and construction delays[328](index=328&type=chunk)[329](index=329&type=chunk)[330](index=330&type=chunk) - The portfolio's revenue is concentrated, with eight properties generating all revenue in 2023. The Tribeca House and Flatbush Gardens properties alone accounted for **28.8%** and **31.1% of total revenue**, respectively[321](index=321&type=chunk) [Risks Related to Our Business and Operations](index=24&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Operations) - Capital and credit market volatility, along with higher interest rates, may adversely affect access to and cost of capital, impacting business activities, earnings, and stock price[104](index=104&type=chunk)[101](index=101&type=chunk) - High inflation rates in the U.S. economy have increased operating expenses and interest expense on variable rate debt, which could outpace the company's ability to increase rents[105](index=105&type=chunk) - The company is exposed to cybersecurity threats, including ransomware and data breaches, which could disrupt IT systems, cause data loss, and result in significant expenses and reputational damage[28](index=28&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) [Risks Related to Our Organization and Structure](index=27&type=section&id=Risks%20Related%20to%20Our%20Organization%20and%20Structure) - Continuing investors hold special voting stock that gives them approximately **69.9% of the total voting power**, allowing them to significantly influence board composition, management, and business conduct[122](index=122&type=chunk)[123](index=123&type=chunk)[125](index=125&type=chunk) - The company's charter and Maryland law contain provisions that may discourage or prevent a change of control, such as the board's ability to issue stock without shareholder approval and a **9.8% ownership limit**[126](index=126&type=chunk)[127](index=127&type=chunk)[130](index=130&type=chunk) - Potential conflicts of interest exist as officers have outside business interests and are not required to present certain investment opportunities to the company, such as for-sale conversions or projects outside the New York metro area[138](index=138&type=chunk)[143](index=143&type=chunk) [Risks Related to Our Indebtedness and Financing](index=32&type=section&id=Risks%20Related%20to%20Our%20Indebtedness%20and%20Financing) - The company has substantial indebtedness, totaling **$1.219 billion** as of December 31, 2023, which may limit financial flexibility and dedicate a significant portion of cash flow to debt service[154](index=154&type=chunk)[147](index=147&type=chunk) - As of December 31, 2023, the company had approximately **$82.0 million of variable rate debt**, exposing it to increased interest expense in a rising rate environment[159](index=159&type=chunk) - Mortgage debt exposes the company to foreclosure risk. A foreclosure would be treated as a taxable sale of the property, which could generate taxable income without cash proceeds and impact the ability to meet REIT distribution requirements[164](index=164&type=chunk)[165](index=165&type=chunk) [Risks Related to Our Status as a REIT](index=34&type=section&id=Risks%20Related%20to%20Our%20Status%20as%20a%20REIT) - Failure to maintain REIT qualification would result in entity-level corporate income tax, significantly reducing funds available for distribution and adversely affecting the stock value[173](index=173&type=chunk)[177](index=177&type=chunk) - To comply with REIT requirements, the company must distribute at least **90% of its taxable income annually**, which could hinder its ability to reinvest cash for growth and may require it to borrow or sell assets at unfavorable times[179](index=179&type=chunk)[185](index=185&type=chunk)[193](index=193&type=chunk) - The company may be subject to a **100% penalty tax** on gains from "prohibited transactions," such as property held primarily for sale, which could cause it to forego otherwise attractive dispositions or conduct them through a taxable REIT subsidiary (TRS)[182](index=182&type=chunk)[183](index=183&type=chunk)[192](index=192&type=chunk) [Unresolved Staff Comments](index=39&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - None[208](index=208&type=chunk) [Cybersecurity](index=39&type=section&id=Item%201C.%20Cybersecurity) The company's cybersecurity risk management and strategy rely on third-party service providers for threat identification and management - Cybersecurity risk management is handled by third-party service providers, who monitor the threat environment[210](index=210&type=chunk)[211](index=211&type=chunk) - Oversight is provided by the Board of Directors and the Audit Committee, with management leading the implementation of cybersecurity processes[213](index=213&type=chunk)[214](index=214&type=chunk) - The company is not aware of any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the company[212](index=212&type=chunk) [Properties](index=39&type=section&id=Item%202.%20Properties) As of December 31, 2023, the company's portfolio comprised nine properties in Manhattan and Brooklyn, totaling approximately **3.4 million rentable square feet**, with an overall occupancy of **98%** (excluding development) Portfolio Overview (as of Dec 31, 2023) | Segment | Square Feet | Units/Tenants | % Leased | Annualized Base Rent (millions) | | :--- | :--- | :--- | :--- | :--- | | **Multifamily** | 2,716,754 | 3,683 | 97.7% | $105.0 | | **Commercial** | 548,580 | 2 | 100.0% | $25.7 | | **Retail** | 105,655 | 17 | 86.5% | $4.7 | | **Total** | **3,370,989** | **3,702** | **97.7%** | **$135.4** | | **Under Development** | 154,468 | 242 | N/A | N/A | - A significant lease expiration risk exists in 2025, when leases representing **$25.8 million**, or **85.3%** of the total annualized commercial and retail rental revenue, are set to expire[226](index=226&type=chunk)[222](index=222&type=chunk) [Descriptions of Our Properties](index=41&type=section&id=Descriptions%20of%20Our%20Properties) - **Tribeca House:** Comprises two luxury rental buildings with **506 residential units** and retail space. It is encumbered by a **$360.0 million loan** maturing in March 2028 with a fixed interest rate of **4.506%**[227](index=227&type=chunk)[223](index=223&type=chunk)[230](index=230&type=chunk) - **Flatbush Gardens:** A 59-building complex with **2,494 residential units** in Brooklyn. It is encumbered by a **$329.0 million mortgage note** maturing in June 2032 with a fixed interest rate of **3.125%** through May 2027[224](index=224&type=chunk)[231](index=231&type=chunk)[232](index=232&type=chunk) - **141 Livingston Street:** A 15-story office building in Downtown Brooklyn primarily leased to the City of New York. It is encumbered by a **$100 million mortgage note** maturing in March 2031 with a fixed rate of **3.21%**[233](index=233&type=chunk)[236](index=236&type=chunk) - **250 Livingston Street:** A 12-story mixed-use building with office space leased to the City of New York until 2025. It is encumbered by a **$125.0 million mortgage note** maturing in June 2029 with a fixed rate of **3.63%**[237](index=237&type=chunk)[84](index=84&type=chunk)[238](index=238&type=chunk) - **1010 Pacific Street:** A newly redeveloped **175-unit residential building** in Brooklyn, encumbered by **$80.0 million in mortgage debt** maturing in September 2025 with blended interest rates[249](index=249&type=chunk)[85](index=85&type=chunk) - **Dean Street:** A property under redevelopment in Brooklyn, planned as a **240-unit residential building**. It is financed with a senior construction loan of up to **$115 million** and a mezzanine loan of up to **$8 million**[251](index=251&type=chunk)[257](index=257&type=chunk) [Legal Proceedings](index=46&type=section&id=Item%203.%20Legal%20Proceedings) The company has been involved in several legal proceedings, primarily tenant lawsuits concerning rent stabilization laws at its Tribeca House property - The company faced lawsuits from tenants at its Tribeca House property alleging rent overcharges related to RPTL 421-g tax abatements. Rulings have determined overcharge amounts and legal fees, with remaining issues in settlement discussions[625](index=625&type=chunk)[650](index=650&type=chunk)[626](index=626&type=chunk) - An investigation by the NY Attorney General's Office into tenant screening practices was resolved in April 2022 through an Assurance of Discontinuance, which had no financial impact on the company[628](index=628&type=chunk) [Mine Safety Disclosure](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) This item is not applicable to the company's business - Not applicable[260](index=260&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=47&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the New York Stock Exchange (NYSE) under the ticker symbol "CLPR" - The company's common stock is listed on the NYSE under the ticker "CLPR"[262](index=262&type=chunk) - As a REIT, the company must distribute at least **90% of its taxable income annually**. The dividend policy is subject to board discretion and may be impacted by operating results, debt service, and other financial needs[264](index=264&type=chunk)[266](index=266&type=chunk) [Reserved](index=48&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, the company experienced strong performance in its residential portfolio, while the commercial portfolio faced headwinds, contributing to an increased net loss of **$15.6 million** for the year - The residential rental market remained robust in 2023, leading to increased rental rates at key properties like Tribeca House and Clover House. The urban office market has been negatively impacted by remote work, but the company's long-term leases with the City of New York have mitigated this impact, although the upcoming 2025 lease termination at 250 Livingston presents a significant future risk[281](index=281&type=chunk) - The company's weighted average interest rate on its debt was approximately **4.2% per annum** as of December 31, 2023[284](index=284&type=chunk) [Results of Operations](index=55&type=section&id=Results%20of%20Operations) Comparison of Operations (Years Ended Dec 31, 2023 vs 2022) | Metric (in thousands) | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $138,205 | $129,746 | +6.5% | | Residential Rental Income | $99,716 | $90,262 | +10.5% | | Commercial Rental Income | $38,489 | $39,484 | -2.5% | | **Total Operating Expenses** | $105,035 | $102,110 | +2.9% | | **Income from Operations** | $33,170 | $27,636 | +20.0% | | Interest Expense, net | $44,867 | $40,207 | +11.6% | | **Net Loss** | **($15,565)** | **($12,571)** | **+23.8%** | - The increase in net loss was primarily driven by higher interest expense and a **$3.9 million loss** on the modification/extinguishment of debt related to the 1010 Pacific Street construction loan refinancing[411](index=411&type=chunk)[435](index=435&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) - As of December 31, 2023, the company had **$1.206 billion of net indebtedness**, **$22.2 million of cash and cash equivalents**, and **$14.1 million of restricted cash**[413](index=413&type=chunk) - Short-term liquidity needs are expected to be met by cash from operations, while long-term needs like acquisitions and debt maturities will likely require external capital from debt or equity offerings[450](index=450&type=chunk)[437](index=437&type=chunk) Cash Flow Summary (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $26,185 | $20,139 | | Net Cash used in Investing Activities | ($41,357) | ($51,476) | | Net Cash from Financing Activities | $20,731 | $9,779 | [Non-GAAP Financial Measures](index=61&type=section&id=Non-GAAP%20Financial%20Measures) Reconciliation of Key Non-GAAP Metrics (in thousands) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net Loss | ($15,565) | ($12,571) | | **FFO** | **$13,374** | **$14,414** | | **AFFO** | **$22,550** | **$19,237** | | **Adjusted EBITDA** | **$66,148** | **$58,518** | | **NOI** | **$76,312** | **$68,162** | [Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuation, with a hypothetical **1%** change impacting annual net income by approximately **$0.8 million** - The principal market risk is from interest rate fluctuations on its **$82.0 million of variable rate debt**[366](index=366&type=chunk)[367](index=367&type=chunk) - A **1%** change in interest rates on this variable debt would impact annual net income by approximately **$0.8 million**[367](index=367&type=chunk) [Financial Statements and Supplementary Data](index=64&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates by reference the company's consolidated financial statements and supplementary data, which begin on page F-1 of the Annual Report - The financial statements are incorporated by reference and begin on page F-1 of the report[369](index=369&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=64&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[369](index=369&type=chunk) [Controls and Procedures](index=64&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2023 - Management concluded that disclosure controls and procedures are effective as of December 31, 2023[370](index=370&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2023, based on the COSO framework[372](index=372&type=chunk) - The independent auditor, PKF O'Connor Davies, LLP, audited and provided an unqualified opinion on the effectiveness of the company's internal control over financial reporting[375](index=375&type=chunk)[515](index=515&type=chunk) [Other Information](index=65&type=section&id=Item%209B.%20Other%20Information) The company reports no other information under this item - None[356](index=356&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=65&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[357](index=357&type=chunk) PART III [Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, and Principal Accountant Fees](index=65&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Information for Items 10 through 14 will be incorporated by reference from the company's definitive Proxy Statement for its 2024 Annual Meeting of Stockholders - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's forthcoming Proxy Statement[396](index=396&type=chunk)[459](index=459&type=chunk)[482](index=482&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=66&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the Annual Report on Form 10-K, including consolidated financial statements, schedules, and an index of exhibits - This item provides an index of all financial statements, schedules, and exhibits filed with the Form 10-K[507](index=507&type=chunk)[462](index=462&type=chunk)[508](index=508&type=chunk) [Form 10-K Summary](index=71&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company did not provide a summary under this item - None[464](index=464&type=chunk)

NEW YORK--(BUSINESS WIRE)--Clipper Realty Inc. (NYSE: CLPR), an owner and operator of multifamily residential and commercial properties in the New York metropolitan area, today announced the Federal income tax treatment of its 2023 dividends to holders of its common stock.   Record Date   Payable Date   Total Dividend Per Share   Ordinary Dividend   Qualified Dividend   Nontaxable Dividend 3/27/2023 4/05/2023 $0.0950 $0.0095 $0.0000 $0.0855 5/15/2023 ...

Clipper Realty Inc. (NYSE:CLPR) Q3 2023 Earnings Conference Call November 2, 2023 5:00 PM ET Company Participants Larry Kreider - Chief Financial Officer David Bistricer - Co-Chairman of the Board and Chief Executive Officer J.J. Bistricer - Chief Operating Officer Operator Good day and welcome to the Clipper Realty Quarterly Earnings Call. At this time, all participants have been placed on a listen-only mode and the floor will be open for questions and comments after the presentation. It is now my pleasur ...

PART I – FINANCIAL INFORMATION [Condensed Financial Statements](index=4&type=section&id=ITEM%201.%20CONDENSED%20FINANCIAL%20STATEMENTS) The condensed financial statements show total assets of **$1.24 billion**, liabilities of **$1.23 billion**, and a net loss of **$12.7 million** for the nine months ended September 30, 2023 Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2023 (unaudited) | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$1,239,759** | **$1,229,631** | | Investment in real estate, net | $1,178,157 | $1,171,109 | | Cash and cash equivalents | $22,450 | $18,152 | | **Total Liabilities** | **$1,226,119** | **$1,192,452** | | Notes payable, net | $1,197,278 | $1,161,588 | | **Total Equity** | **$13,640** | **$37,179** | Consolidated Statements of Operations Highlights (in thousands) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Total Revenues | $103,338 | $96,737 | | Income from Operations | $24,155 | $20,859 | | Net Loss | $(12,709) | $(9,217) | | Net Loss per Share (Basic & Diluted) | $(0.36) | $(0.26) | [Notes to Consolidated Financial Statements (Unaudited)](index=9&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) The notes detail the company's REIT structure, accounting policies, property portfolio, debt, segment performance, and legal matters, noting significant revenue concentration - The company operates as a REIT, with its operations primarily conducted through the Operating Partnership, which is a variable interest entity (VIE) controlled by the company[5](index=5&type=chunk)[6](index=6&type=chunk) - On June 29, 2023, the Flatbush Gardens property entered a 40-year regulatory agreement, receiving a full property tax exemption in exchange for maintaining rent affordability, leasing units to formerly homeless families, and committing to a **$27 million** capital improvements plan[4](index=4&type=chunk)[28](index=28&type=chunk) - The City of New York is a significant tenant, comprising approximately **23%** of total revenues for the nine months ended September 30, 2023[9](index=9&type=chunk) - The company is involved in several legal proceedings (Kuzmich, Crowe, Horn cases) related to rent overcharge allegations at its Tribeca House property. A charge of **$2.7 million** was recorded in 2021 for litigation settlement, with payments made in 2022 and 2023[21](index=21&type=chunk)[22](index=22&type=chunk)[25](index=25&type=chunk) Segment Revenue Breakdown (unaudited) | Period | Commercial | Residential | Total | | :--- | :--- | :--- | :--- | | Nine months ended Sep 30, 2023 | 28% | 72% | 100% | | Nine months ended Sep 30, 2022 | 31% | 69% | 100% | Notes Payable Principal Payment Requirements (as of Sep 30, 2023, in thousands) | Year | Principal Payments | | :--- | :--- | | 2023 (Remainder) | $487 | | 2024 | $1,993 | | 2025 | $82,092 | | 2026 | $44,718 | | 2027 | $33,461 | | Thereafter | $1,049,105 | | **Total** | **$1,211,856** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=28&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) MD&A discusses the company's financial performance, noting revenue growth and a widened net loss, with sufficient liquidity from financing activities [Overview of Our Company](index=28&type=section&id=Overview%20of%20Our%20Company) Clipper Realty Inc. is a self-managed REIT focused on acquiring, owning, and operating multifamily residential and commercial properties in Manhattan and Brooklyn - The company is a REIT focused on multifamily and commercial properties in the New York metropolitan area, with a portfolio in Manhattan and Brooklyn[43](index=43&type=chunk) - As of September 30, 2023, the company's portfolio includes a **59-building** residential complex in Brooklyn, residential/retail properties in Tribeca and Manhattan, and commercial properties in Downtown Brooklyn[44](index=44&type=chunk)[46](index=46&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Total revenues grew **6.8%** for the nine months ended September 30, 2023, driven by residential rental income, but net loss widened due to increased interest expense and a **$3.9 million** loss on debt extinguishment Comparison of Operations for the Nine Months Ended September 30 (in thousands) | Metric | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $103,338 | $96,737 | 6.8% | | Income from Operations | $24,155 | $20,859 | 15.8% | | Interest Expense, net | $(32,996) | $(30,076) | 9.7% | | Loss on extinguishment of debt | $(3,868) | $0 | N/A | | Net Loss | $(12,709) | $(9,217) | 37.9% | - Residential rental income for the nine-month period increased by **8.0%** (to **$72.5 million** from **$67.2 million**) primarily due to higher rental rates at properties like Tribeca House and Clover House[80](index=80&type=chunk)[85](index=85&type=chunk) - Real estate tax expenses for Q3 2023 decreased by **12.3%** compared to Q3 2022, mainly due to the real estate tax exemption at Flatbush Gardens resulting from the Article 11 agreement[59](index=59&type=chunk)[61](index=61&type=chunk) - A loss on extinguishment of debt of **$3.9 million** was recorded in the nine months ended September 30, 2023, related to the refinancing of the 1010 Pacific Street construction loan[117](index=117&type=chunk)[191](index=191&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2023, the company had **$1.2 billion** in indebtedness and **$22.5 million** in cash, with net cash from operations increasing, indicating sufficient liquidity Liquidity Position as of September 30, 2023 (in millions) | Item | Amount | | :--- | :--- | | Indebtedness, net | $1,197.0 | | Cash and cash equivalents | $22.5 | | Restricted cash | $14.9 | Cash Flow Summary for the Nine Months Ended September 30 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $17,130 | $15,159 | | Net cash used in investing activities | $(27,783) | $(41,992) | | Net cash provided by financing activities | $17,341 | $10,101 | - Net cash from financing activities in the first nine months of 2023 was primarily driven by the refinancing of the 1010 Pacific Street and Dean Street property loans, providing **$40.6 million** net of amortization, offset by loan costs and dividends[144](index=144&type=chunk) [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like FFO, AFFO, Adjusted EBITDA, and NOI to supplement operating performance, with AFFO increasing to **$16.2 million** for the nine months ended September 30, 2023 Reconciliation of Net Loss to FFO and AFFO (in thousands) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net Loss | $(12,709) | $(9,217) | | Real estate depreciation and amortization | 21,376 | 20,221 | | **FFO** | **$8,667** | **$11,004** | | Adjustments (e.g., amortization, straight-line rent, etc.) | 7,561 | 3,536 | | **AFFO** | **$16,228** | **$14,540** | Adjusted EBITDA and NOI (in thousands) | Metric | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Adjusted EBITDA | $48,501 | $43,953 | | NOI | $56,326 | $51,049 | [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is interest rate fluctuations on its **$74.4 million** variable-rate debt, where a **1%** increase would impact annual net loss by approximately **$0.7 million** - The principal market risk is from interest rate fluctuations on variable rate debt[202](index=202&type=chunk) - A **1%** change in interest rates on the **$74.4 million** of variable rate debt would impact annual net loss by approximately **$0.7 million**[203](index=203&type=chunk) - The estimated fair value of the Company's notes payable was approximately **$1.117 billion** as of September 30, 2023[224](index=224&type=chunk) [Controls and Procedures](index=39&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded the company's disclosure controls and procedures were effective as of September 30, 2023, with no material changes in internal control over financial reporting during the quarter - Management concluded that the Company's disclosure controls and procedures were effective as of September 30, 2023[204](index=204&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter[227](index=227&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=40&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 8, "Commitments and Contingencies," in the consolidated financial statements for details on legal proceedings - For information on legal proceedings, the report refers to Note 8 of the consolidated financial statements[207](index=207&type=chunk) [Risk Factors](index=40&type=page&id=ITEM%201A.%20RISK%20FACTORS) The company states no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022 - There have been no material changes to the risk factors disclosed in the company's 2022 Annual Report on Form 10-K[228](index=228&type=chunk) [Exhibits](index=41&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including loan agreements for the Dean Street property, a line of credit note, and officer certifications - Exhibits filed include new loan agreements for the Dean Street property, a line of credit note with Valley National Bank, and required officer certifications[210](index=210&type=chunk)

Clipper Realty Inc. (NYSE:CLPR) Q2 2023 Earnings Conference Call August 4, 2023 5:00 PM ET Company Participants Larry Kreider - Chief Financial Officer David Bistricer - Co-Chairman of the Board and Chief Executive Officer J.J. Bistricer - Chief Operating Officer Conference Call Participants Buck Horne - Raymond James Craig Kucera - B. Riley Securities Operator Good day, and welcome to the Clipper Realty Second Quarter Earnings Call. At this time, all participants have been placed on a listen-only mode and ...

3. Acquisitions | --- | --- | --- | --- | --- | |-------------------------------------------------------------|-------|-------------------------------|-------|---------------------| | | | June 30, 2023 \n(unaudited) | | December 31, 2022 | | Deferred costs | | $ 348 | $ | 348 | | Lease origination costs | | 1,463 | | 1,376 | | In-place leases | | 428 | | 428 | | Real estate tax abatements | | 9,142 | | 9,142 | | Total deferred costs and intangible assets | | 11,381 | | 11,294 | | Less accumulated amortizati ...

Clipper Realty, Inc. (NYSE:CLPR) Q1 2023 Earnings Conference Call May 4, 2023 5:00 PM ET Company Participants Larry Kreider – Chief Financial Officer David Bistricer – Co-Chairman of the Board and Chief Executive Officer J.J. Bistricer – Chief Operating Officer Conference Call Participants Buck Horne – Raymond James Operator Good day, ladies and gentlemen, and welcome to the Clipper Realty First Quarter 2023 Earnings Call. At this time, all participants have been placed on a listen-only mode and the floor w ...