Clipper Realty Inc.

Good afternoon, ladies and gentlemen, and welcome to the Clipper Realty Third Quarter 2022 Earnings Call. At this time, all 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 Kreiner. Sir, the floor is yours.

Good afternoon, and thank you for joining us for the Third 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 a 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.scc.gov and our website. As a reminder, the forward-looking statements speak only as of the date of this call, November 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 10Q 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 Bistresser.

Thank you, Larry. Good afternoon and welcome to the third quarter of 2022 earnings call for Krippler Realty. I will provide an update on 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 discuss 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 continues to rapidly improve despite the recent headline news on inflation and interest rate increases. Rental demand on our properties has been very strong all year. As 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 third quarter, our properties were 99% leased and new leases at all our properties are exceeding pre-pandemic levels. At the Tribeca House property, where new leases in the third quarter exceeded $83 per square foot, more than 23% better than the previous trends consistent with our trends in the previous quarter, causing the average of all leases to increase to a record $71 per square foot from $67 per square foot at the end of June. $65 per square foot at the end of March and $63 per square foot at the end of December. At Flappage Gardens, New leases on units not yet at the legal limit average $39 per foot versus an overall lease rate of $25.66 at the end of September. With respect to interest rate increases, we believe we are buttressed by the relatively strong duration of debt on our operating properties, of which 95% is fixed at 3.72%, with an average duration of 6.87 years, and is non-recourse, subject to limited standard carve-outs, is non-cross-collateralized. With respect to inflation, we looked to the short duration of our residential leases to allow us to cover increased expenses on our operating properties and higher construction costs on our development properties. Although, I should note that we brought out all the contracts on our newly completed 1010 Pacific construction project in 2021 before the inflation increased. Our balance sheet continues to be well positioned from a liquidity perspective. We have approximately $34.5 million of cash, consisting of $20 million of unrestricted cash and $15.5 million of restricted cash. We financed our portfolio on an asset-by-asset basis, turning to ongoing developments. Essentially, ground-up development of our 1010 Pacific acquisition is moving along very well. We are targeting substantial completion in the fourth quarter, and completion of long-term financing in the first quarter of 2023. The property is located in Prospect Heights, Brooklyn, about one mile from the Atlantic Terminal Barclay Center Hub. We estimate the project to cost $85 million, which is on budget and developed to a 7.2% stabilized cap rate in improved leasing environment. JJ will provide further update on the project shortly. At the end of the year, we also bought another property in the same area in Brooklyn, 953 Dean Street, that we will also intend to develop from the ground up. In April and August, we completed the increase in incremental purchases of land and financing to bring the initial purchase to total cost of approximately $56.5 million, with acquisition financing of $37 million. We expect to build a nine-story fully amenitized residential building with 167,000 residential rentable square feet. 240 total units, 70% free market, and 30% affordable, along with 8,500 commercial rental square feet. With regard to our third quarter results, we are reporting record quarterly revenue of $32.8 million, net operating income of $17.4 million, both exceeding pre-pandemic levels, and AFF over $5 million as a result of improved leasing I mentioned above. These results represent significant improvements over the third quarter of last year, as JJ and Larry will further detail. I will now turn over the call to JJ, who will provide an update on operations.