Clipper Realty Inc.

Good day, ladies and gentlemen, and welcome to the Clipper Realty First Quarter 2023 Earnings Call. At this time, all participants have been placed on a listen-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, Larry Kreider. The floor is yours.

Thank you, and good afternoon. Thank you for joining us for the First Quarter 2023 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 2022 Annual Report on Form 10-K and updated in the 2023 First Quarter Report on Form 10-Q, which are 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 4, 2023, 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 in 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 Vistaser.

Thank you, Larry. Good afternoon and welcome to the first quarter 2023 earnings call for Clipper Realty. I will provide an update to 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. Our operating results continue their positive trends. Residential leasing activity continues to improve based on strong rental demand at our properties. As New York City is fully reopened, people seek to relocate back to the city and employees increasingly return to their offices. At the end of the first quarter, our properties were 99% leased, and new leases at all our properties continue to exceed pre-pandemic levels. At the Tribeca house, for example, new leases in the first quarter exceeded $77 per foot, 17% better than the previous rents, and overall rent levels were a record $75 per foot, 19% better than the $63 at the end of December 2022. And at the Flappage Gardens complex, new leases averaged $36 this quarter, and overall rent levels rose to $26.17 per foot. With respect to interest rate increases, we believe we are buttressed by the relatively long duration of our debt on our operating properties, of which 94% is fixed at an average of 3.72% interest, with an average duration of 6.47 years and is non-recourse, subject to limited standard carve-outs, and is not cross-collateralized. With respect to inflation, we look to the short duration and high demand for our residential leases to allow us to cover increased expenses on our operating properties and higher construction costs on our development profits. Our balance sheet continues to be well-positioned from a liquidity perspective. We have a total of $38 million in cash, consisting of $19 million of unrestricted cash and $19 million of restricted cash. We finance our portfolio on an asset-by-asset basis. We are pleased to announce that as of today, we have completed on schedule 1010 Pacific Street, ground-up development, now branded Pacific House, refinanced it with permanent debt and begun leasing in anticipation of full operation in the second quarter. The property is located in Prospect Heights, Brooklyn, about one mile from the Atlantic Terminal slash Barclays Center Hub. It comprises 175 units. It came in at the budget of $85 million total cost and is leasing to a cap rate above 7%. Due to the excellent progress on construction and leasing in February, we replaced the construction load ahead of schedule With a five-year, $80 million loan, $60 million is already drawn at closing, $20 million available upon achievement of certain financial targets. It has an initial interest rate of 5.7%, reduced by another 25 basis points upon full lease-up. Also, we have begun to develop the land parcels we bought in 2021 and 2020. At Dean Street, we also intend to develop From the ground up, a nine-story fully amenitized residential building with 166 residential rentable square feet, 240 total units, 70% of which are free market, and the balance is affordable. Along with the 8,500 commercial rental square feet, we paid $56.5 million for the parcels, partially funded for acquisition financing of $36 million, and we tend to fund the development with a construction loan. With regard to our first quarter results, we are reporting record quarterly revenue of $33.7 million, NOI of $17.1 million, both exceeding pre-pandemic levels, and AFFO of $4.5 million as a result of improved leasing I mentioned above. These results represent significant improvements over the first quarter last year and a testament to the prowess of the management and executive team. as JJ and Larry will further detail. I will now turn the call over to JJ, who will provide an update on operations.