Clipper Realty Inc.

Good morning, ladies and gentlemen, and welcome to the Clipper Realty 4Q 2020 earnings call. At this time, all participants have been placed on a list-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Michael Franz. Sir, the floor is yours.

Good morning, and thank you for joining us for the fourth quarter 2020 Clipper Realty Inc. earnings conference call. Participating with me on today's call are David Bistresser, Co-Chairman of the Board and Chief Executive Officer, and JJ Bistresser, Chief Operating Officer. Please be aware that statements made during the call that are not historical may be deemed forward-looking statements, and actual results may differ materially from those indicated by such forward-looking statements. These statements are subject to numerous risks and uncertainties. including those disclosed in the company's 2020 annual report on Form 10-K posted yesterday, which is accessible at www.sdc.gov and our website. As a reminder, the forward-looking statements speak only as of the date of this call, March 17th, 2021, and the company undertakes no duty to update them. During this call, management may refer to certain non-GAAP financial measures including adjusted funds from operations, or AFFO, adjusted earnings before interest taxes depreciation and amortization, or adjusted EBITDA, and net operating income, or NOI. Please see our press release, supplemental financial information, and Form 10-K posted yesterday for a reconciliation of these non-GAAP financial measures with the most directly comparable GAAP financial measures. With that, I will now turn the call over to our co-chairman and CEO, David Bistreser.

Thank you, Michael. Good morning and welcome to the fourth quarter 2020 earnings call for Clipper Realty. I will provide an update to our business performance, including recent highlights and milestones, as well as how our company continues to respond to the COVID-19 pandemic. I will then turn the call over to JJ, who will discuss property-level activity, including leasing performance and measures taken in light of the pandemic. Finally, Michael will speak about our quarterly financial performance, We will then take your questions. I will begin by thanking the entire Clipper Realty team for the continued hard work and perseverance during these unprecedented times. We are grateful for their efforts over the past year under very challenging circumstances, are proud of their ongoing dedication to our shareholders, residents, communities, and our business. Our properties have remained open and operational throughout the pandemic. We continue to take the necessary steps to make our tenants safe and in compliance with state and local orders. During the fourth quarter and into the beginning of 2021, we have seen an increase in residential leasing activity as New York City and the economy in general continues to strengthen from the depths of the pandemic. We expect demand to accelerate, pricing continues to improve as New York City continues to open up and vaccinations proliferate. At year end, our properties were a 95 cent lease an approximate 200 basis point increase versus the end of the third quarter. We are confident in the resiliency of New York City. We expect our properties in the city to remain desirable to a broad range of tenants, and operations continue to return to a more normal state over time. Last month, we refinanced our 141 Livingston Street property with a $100 million 10-year secured first mortgage loan with City Real Estate Funding, Inc. The loan bears interest at 3.21%, interest only for the entire term, which is expected to reduce annual debt service by $1.3 million. We repaid the existing $74 million amortizing loan on the property that was due in 2028 and bore interest at 3.875 through May 2023. Net proceeds of approximately $23 million increased our cash position. We finance our portfolio on an asset-by-asset basis, no cost collateralization, and our debt is non-recourse and non-cost collateralized except for standard carbots. We have no debt maturities on any of our operating properties until 2027. Our property is well positioned from a liquidity perspective. During the fourth quarter, we repurchased approximately 1.7 million shares of common stock, at an average price of $5.70 per share under our $10 million repurchase program announced in August of 2020. We completed the repurchase program in November of last year. For more recent developments, we continue to proceed with the redevelopment of our 1010 Pacific Street acquisition located in Prospect Heights, Brooklyn, about one mile from the Atlantic Terminal Barclays center hub as previously discussed we estimate the project will cost 85 million dollars in total take two years to complete and develop to six and a half percent stabilized cap rate jj will provide a further update on the project shortly permits to commence construction are in hand and construction has commenced in our office portfolio the city rent at 141 limousine property increased 25% by the end of December 2020, and will add $2.1 million to the property annual NOI. Together with the expected additional $5 million of annual NOI resulting from the city's new lease of 250 Livingston Street property that commenced in August of 2020, these roles are expected to add an incremental $7.1 million of annual NOI to our portfolio. representing an approximate 10% increase on our normalized run rate. I would like to provide an update on Tribeca House 421-G Kuzmich litigation. As previously disclosed on October 29, 2020, the Appellate Division applied the Court of Appeals Regina ruling to this case, holding that the base date for the determination of rent overcharges is four years prior to 2016 filing of the Kuzmich complaint and overcharges. if any are determined by comparing the rents actually charged during the four-year period to the rent increase permitted by New York City Rent Guidelines Board. Although not eliminating rent overcharge as a liability altogether, this ruling is expected to limit our financial exposure in this regard. The case will be remanded back to the lower court, which will determine the amount of liability of rent overcharge and attorney's fees. No court dates have been scheduled yet. We do not believe that this litigation will have a material impact on our business as it pertains to a limited subset of previous and existing tenants at the property. The vast majority of current tenants and all future move-ins are not impacted by the litigation as those units are free market. Lastly, I'd like to comment on the fourth quarter results. We are reporting quarterly revenue of $30.3 million. NOI of $14.7 million, and AFFO of $3 million. Michael will provide further details on our financial performance. I will now turn the call over to JJ, who will provide an update on our operations and our response to the pandemic.