Clipper Realty Inc.

Good afternoon, ladies and gentlemen, and welcome to the Clipper Realty First Quarter 2022 Earnings Call. At this time, participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Larry Kreider.

Sir, the floor is yours. Thank you very much, Matt. Good afternoon, and thank you for joining us for the First Quarter 2022 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 2021 annual report on Form 10-K, which is accessible at www.sec.gov and our website. As a reminder, the forward-looking statements speak only as of the date of this call, May 10, 2022, and the company undertakes no duty to replace them, 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-Q posted today 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 Bister, sir.

Thank you, Larry. Our new residential leasing activity that began toward the end of last year continues to improve. At the end of the first quarter, all our residential properties were leased to the mid-high 90% range. New rental rates per square foot in April and May are reaching or exceeding pre-pandemic levels and all exceeding present average rates. For example, leases in April at Tribeca House were $83 per square foot. Plattridge Gardens, $35 per square foot. Clover House, $84 per square foot. We are experiencing strong rental demand at our Tribeca House property. Year on year, this occupancy has increased from 89% in December last year, with an average occupancy of 98% over the 12 months. As occupancy increased last year, we achieved higher rent per square foot levels, which now have reached an excess of $83 in April 2022, a 35% increase over higher rents on the same units. As a result, Average rents per square foot of the whole property have increased to nearly $65,000 in March and $66,000 per square foot last week. We expect rent per square foot to continue to grow steadily higher as our one- and two-year leases turn over. Revenue at Lapwood Gardens in Brooklyn held up well in the first quarter, increasing in the fourth quarter based on new leases. Throughout the pandemic, Property maintained leased occupancy between 92% and 93%, which we increased to 95% leased at the end of March and hope to go higher. Throughout, we have maintained steady rent per square foot at $25 per square foot, a near record level, and began trending up again in the first quarter, based on new leases generally in excess of $30 per foot. Lastly, we continue to benefit from the 24-year reorganization of the property operations and that created nearly $800,000 in operating savings. Rent collections across our portfolio remain strong despite the residual challenges of the pandemic. Our overall collection rate in the fourth quarter was 96.5%. This reflected a partial pause in the New York Emergency Rental Assistance Program, or commonly known as ERAP, by which we received $2.5 million in the fourth quarter versus $600,000 this quarter. We are moving well on construction at 1010 Pacific Street and are on target for substantial completion by the fourth quarter. We have completed facade work, sheetrocking is well on the way, window installation is nearing completion, and we expect to be in finishes in the third quarter of this year. We have finalized approximately 95% of our construction contracts, having bought out most of them last year, mitigating the recent inflation concerns. We are financing our construction fully through a $52.5 million construction loan. The development is nine stories, 119,000 square foot of rentable space, and monetized multifamily rental building with underground parking. The property is expected to have 175 total units, 70% of which will be free market, 30% affordable, and is eligible for 35-year lease. 421A, tax abatement. Looking ahead, we remain focused on optimizing occupancy, pricing, and expenses across the business to best position ourselves so the New York City continues recovery from the pandemic. With that, I'd now turn over the floor to J.J. Bistris. Thank you.