Clipper Realty(US:CLPR)2025-11-13 22:36Financial Performance - Total revenues for the three months ended September 30, 2025, were $37.698 million, a slight increase from $37.622 million in the same period of 2024, representing a growth of 0.2%[13] - Residential rental income increased to $29.773 million for the three months ended September 30, 2025, compared to $27.846 million in 2024, reflecting a growth of 6.9%[13] - Net loss attributable to common stockholders for the three months ended September 30, 2025, was $1.751 million, compared to a loss of $412,000 in the same period of 2024, indicating a significant increase in losses[13] - For the nine months ended September 30, 2025, the net loss was $41,066,000 compared to a net loss of $5,496,000 for the same period in 2024, indicating a significant increase in losses[18] - The net loss for the three months ended September 30, 2025, was $4.607 million, compared to a net loss of $1.088 million in the same period of 2024, indicating a significant decline[148] Assets and Liabilities - Total assets as of September 30, 2025, were $1.238 billion, a decrease from $1.287 billion as of December 31, 2024[11] - Total liabilities stood at $1.304 billion as of September 30, 2025, slightly up from $1.301 billion at the end of 2024[11] - The company reported an accumulated deficit of $115.723 million as of September 30, 2025, compared to $95.507 million at the end of 2024[11] - The total debt as of September 30, 2025, was $1,281,158,000, compared to $1,275,359,000 as of December 31, 2024, showing a slight increase of 0.45%[70] Operating Expenses - Operating expenses for the three months ended September 30, 2025, totaled $28.813 million, an increase from $26.870 million in the same period of 2024, representing a rise of 7.2%[13] - Interest expense for the nine months ended September 30, 2025, was $36.321 million, compared to $35.320 million in the same period of 2024, indicating a slight increase[13] - Interest expense for the three months ended September 30, 2025, was $13.320 million, compared to $11.840 million in the same period of 2024, indicating an increase of approximately 12.5%[148] Cash Flow and Financing - Cash provided by operating activities for the nine months ended September 30, 2025, was $16,464,000, down from $21,337,000 in 2024[18] - The company made payments of mortgage notes totaling $163,639,000 during the nine months ended September 30, 2025[18] - The company completed the sale of a property at 10 West 65th Street for gross proceeds of $45,500,000, incurring $1,900,000 in closing costs[22] - The company entered into a Loan Agreement for $84.5 million with a maturity date of October 6, 2030, bearing an interest rate of 5.73%[101] Impairment and Reserves - The company reported a loss on impairment of long-lived assets amounting to $33.780 million for the nine months ended September 30, 2025, which was not present in the same period of 2024[13] - The company recorded a loss on impairment of long-lived assets amounting to $33,780,000 during the three months ended March 31, 2025[22] - The Company recorded a general reserve under ASC 450 for receivables probable of collection, reflecting a proactive approach to managing credit risk[46] Real Estate and Leasing - The company has a significant dependency on two commercial leases with the City of New York, with one lease terminating on August 23, 2025, and the other expiring on December 27, 2025, which poses a risk to financial stability[9] - The City of New York's lease termination for 342,496 square feet resulted in a loss of approximately $16,000 per annum in rental income[116] - The Company signed a lease amendment with Equinox extending the lease term to August 31, 2040, with increased rent and renovation credits[117] Legal and Compliance - An event of default occurred under the $125,000 building mortgage loan due to failure to deposit all revenue into the cash management account, which could lead to foreclosure proceedings[74] - The Company received notice of default due to the Guarantor's alleged failure to maintain a net worth of at least $100,000 as of December 31, 2022, and 2023[82] - The Company is subject to a claim from New York City for $1,152 million based on an audit of operating expense escalation charges from June 2014 to December 2018[130] Capital Expenditures - Capital expenditures for the three months ended September 30, 2025, totaled $4.659 million, a decrease from $11.840 million in the same period of 2024, representing a decline of approximately 60.5%[149] - The Company spent approximately $18,900 million on capital improvements required under the Housing Repair and Maintenance Letter Agreement through September 30, 2025[139] Related Party Transactions - The Company recorded related-party expenses of $60 million for Q3 2025, compared to $112 million for Q3 2024[143] Dividends and Distributions - The Company is required to distribute dividends equal to at least 90% of the REIT taxable income to qualify as a REIT, impacting its cash flow management strategy[58] - The company declared distributions totaling $4.614 million on November 13, 2025, for its common shares, Class B LLC units, and LTIP units[156]