Clipper Realty (CLPR) investor relations material

Executive summary

• Residential properties achieved near-full occupancy and record-high rents, with new free market leases exceeding prior rents by over 7% compared to the previous quarter, driving a 9.3% year-over-year increase in residential revenue to $31.9 million for Q1 2026.

• Prospect House, a new Brooklyn development, is nearly fully leased and contributed $1.7 million in revenue, though it posted a net loss of $2.3 million during initial lease-up.

• The company ceased supporting operations and debt service at 250 Livingston Street after NYC vacated, and is negotiating with the lender for a potential sale of the property loan; a temporary receiver now manages the property.

• Sale of 10 West 65th Street completed in May 2025, resulting in a significant impairment charge in Q1 2025 and a loss on disposal in Q2 2025.

• Portfolio consists of multifamily residential and commercial properties in Manhattan and Brooklyn, NY, with a focus on optimizing revenues and controlling costs amid market challenges.

Financial highlights

• Total Q1 2026 revenues were $38.1 million, down from $39.4 million in Q1 2025, as commercial declines offset residential gains.

• Net operating income (NOI) was $20.0 million, compared to $21.8 million in Q1 2025.

• Adjusted funds from operations (AFFO) were $2.3 million, down from $8.0 million year-over-year.

• Residential rental income rose 9.3% year-over-year to $31.9 million, while office revenue decreased by $4 million due to the NYC lease termination at 250 Livingston Street.

• Net loss attributable to common stockholders was $4.2 million in Q1 2026, compared to $13.3 million in Q1 2025; net loss improved to $11.1 million from $35.1 million year-over-year, reflecting the absence of a prior-year impairment charge.

Outlook and guidance

• Residential leasing demand is expected to remain strong due to constrained supply and discouraged new development in NYC, supporting further rent growth.

• Management expects continued pressure on commercial revenues until new tenants are secured for 250 Livingston and 141 Livingston.

• Focus remains on optimizing occupancy, pricing, and expenses to position for future growth, with management monitoring refinancing opportunities for Flatbush Gardens ahead of the 2027 interest rate reset.

• Company believes current cash flows and access to capital are sufficient for at least the next twelve months, but refinancing risk remains.

• Management expects further improvement at Prospect House as it is now fully leased and will contribute a full quarter of stabilized results going forward.