Clipper Realty Inc.

Good afternoon, ladies and gentlemen, and welcome to today's Clipper Realty second quarter 2022 earnings call. At this time, all participants have been placed on a listen-only mode, but we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn it over to your host, Lawrence Kreider. Lawrence, the floor is yours.

Thank you very much. Good afternoon, and thank you for joining us for the second quarter 2022 earnings call. 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, August 9, 2022, 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-Q. posted today for 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 Bisterster.

Thank you, Larry. Good afternoon and welcome to the second quarter of 2022 earnings call for Plipper Realty. I will provide an update of our business performance, including recent highlights and milestones, as well as our company's progress. I will then turn the call over to JJ, who will address property level activity, including leasing performance. Finally, Larry will speak about our quarterly financial performance. We will then take your questions. We see positive operational trends as we look forward. Residential leasing activity is rapidly improving, despite the recent headline news on inflation and interest rate increases. We expect rental demand to remain strong and pricing to improve. Now that New York City is largely reopened, people seek to relocate back to the city and employees increasingly return to their offices. At the end of the second quarter, our properties were 98% leased and new leases at our property are reaching or exceeding pre-pandemic levels. including at Rebecca House property, where new lease rates in the second quarter exceeded $80 per square foot, more than 30% better than the previous rents and June average rents per square foot increased to $67 per foot from $65 per foot at the end of March and $63 per square foot at the end of December. With respect to interest rate increases, we believe we are buttressed by relatively long duration of our debt, of which 95% is fixed at 3.76%. has an average duration of 7.13 years and is non-recourse subject to limited standard carbon non-cost collateralized. With respect to inflation, we looked at a short duration of our residential leases to allow us to cover increased expenses on a substantial number of our leases and our major existing construction project, our contracts were all bought out in 2021. Our balance sheet continues to be well positioned from a liquidity perspective. We have approximately $44 million consisting of $29.5 million of unrestricted cash and $14.5 million of restricted cash. We finance our portfolio on an asset-by-asset basis. Turning to recent developments. The centrally ground-up development of a 1010 Pacific acquisition is moving along very well, and we are targeting substantial completion in the fourth quarter. The property is located in Prospect Heights, Brooklyn, a mile from the Atlantic Ocean, terminal Barclays Center Hub. As previously discussed, we estimate the project to cost $85 million and develop to a 6.5% stabilized cap rate. JJ will provide further update on the project shortly. At the end of the year, we also brought another property in the same area of Brooklyn at 953 Dean Street that we intend to redevelop from the ground up. In April, we completed the incremental purchase of land and financing to bring the initial purchase to a total cost of approximately $48 million with acquisition financing of $37 million. We expect to build a nine-story fully amenitized residential building with 160,000 residential rentable square feet, 240 units, 70% free market, 30% affordable, which is under the 421A program, which is a tax stop for 35 years with 85 and a half, 8,500 commercial rental square feet. With regard to our second quarter results, we are reporting quarterly revenue of $31.9 million, NOI of $17.2 million, and AFFO of $5.1 million as a result of the improved leasing I mentioned above. These results represent significant improvements over the second quarter last year, as JJ and Larry will further detail. I will now turn the call over to JJ, who will provide an update on operations.