Clipper Realty Inc.

Good day and welcome to the Clipper Realty Quarterly 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. Sir, the floor is yours.

Thank you, John. Good afternoon, and thank you for joining us for the third quarter 2023 Clipper Realty and Earnings Conference Call. Participating with me on today's call are David Bisterster, Co-Chairman of the Board and Chief Executive Officer, and J.J. Bisterster, Chief Operating Officer. Please be aware the 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 third quarter report on Form 10-Q, which are accessible at www.scc.gov and our websites. As a reminder, the forward-looking statements speak only as of the date of this call, November 2nd, 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 for 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 Bistresser.

Thank you, Larry. Good afternoon, and welcome to the third quarter of 2023 earnings call for Clipper Realty. I will provide an update of our business performance and some exciting new developments after which JJ will discuss property-level activity, including leasing performance, and I will speak to our quarterly financial performance. We will then take your questions. I am pleased to report that we have record operating results on most key metrics and continuing the positive trends from previous quarters. Rental demand has been very strong at all our properties. In the third quarter, new leases exceeding prior rents by 12%, across the entire market-based portfolio, and our properties are 98% leased. At Rebecca House in Manhattan and Clover House in Brooklyn, new leases were $91 per square foot, and overall rent levels reached a record $78 per foot on average, 40% better than the 63 per foot at the end of 2021. At Flappage Gardens, we have begun operating as of July 1, under the previously announced 40-year agreement with New York City's Housing Preservation Department, so-called Article 11 of the Private Housing Finance Law. Under this agreement, the elimination of real estate taxes and enhanced rental recoveries for assisted tenants will allow us to profitably provide for our commitment for property improvements, tenant assistance, and higher wages for everyone's benefit. Of course, we are at the early stages and we'll report our progress as we move forward. Operationally, we are also very pleased with our new ground-up development project, Pacific House, 1010 Pacific, which became online last quarter and budgeted and is 93% leased and on target to yield a 7% cap rate. Properties located at Prospect Heights, Brooklyn, one mile from the Atlantic Terminal, Barclays Center, The properties are 175 units, 70% free market, 30% affordable. It also has a tax abatement for 30 years under the 421A program. In recognition of the property's excellent prospects, we completed the final $20 million draw from our bank in the third quarter on the $80 million loan we entered earlier in the year. At the nearby 953 Dean Street ground-up development project, we have completed the foundation, Bought out 80% of the vendors that were going to work on the project. Finalized a $133 million construction loan, which will enable us to complete the project on time as we did with the 1010 Pacific Street project. We purchased the land in 2021 and 2022 on which to build a nine-story fully amenitized residential building with 160,000 residential square feet. 240 units, 70% free market, 30% affordable, which will again provide us with a 421A tax abatement for the next 30 years. And 8,500 commercial square feet of rental space. As to the continued higher interest rate environment, we believe the higher rates make for higher demand for our rental product, hence the higher rents that we've been reporting. And it will be so for a a longer duration. Most of our debt is fixed, 94% of our debt is fixed at 3.82%, average duration of six and a quarter years, non-recourse, subject to limited standard cover, and is not gross or lateralized. Each property stands on its own. We finance our portfolio on an asset basis. With respect to inflation, we look to short duration and high demand for residential leases, to allow us to cover increased expenses as we're seeing the increases in the rents from a product of inflation. With regard to our third quarter results, we are reporting record quarterly revenue, 35.1 million, record NOI of 20 million, and AFFO of 6.3 million as a result of improved leasing I just mentioned. These results represent significant improvements over the third quarter last year and JJ and I will give you further detail. I will now turn the call over to JJ, who will provide an update on operations.