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 very much, John. Good afternoon, and thank you for joining us for the second quarter 2024 Clipper Realty Inc. earnings conference call. Participating with me on today's call are David Bisterster, Co-Chairman of the Board and Chief Executive Officer, and JJ Bisterster, 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 2023 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, August 1, 2024, 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 Bisserser.

Thank you, Larry. Good afternoon, and welcome to the second quarter 2024 earnings call for Clipper Realty. I will provide an update on our business performance and some new developments, after which JJ will discuss property-level activity, including leasing performance, and Larry will speak to our quarterly financial performance. We will then take your questions. I am pleased to report that we are reporting record operating results including record revenue, net operating income, and AFFO based on excellent residential activity. Rental demand continues to be strong at all our properties. Overall rents are generally at all-time highs and continue to increase, and we are nearly fully leased. In the second quarter, new leases exceeded prior rents by over 7% and crossed the entire market-based portfolio, led by the Tribeca House property in Manhattan, the Clover House property in Brooklyn, There were new leases were over $84.90 per square foot, and overall rent levels were $81.00 and $84.00 per square foot, all compared to the $63.00 per square foot at the end of December 2021. Results of stabilized rent property, Sabbath Gardens, are also strong. Since last July, we have operated under the 40-year operating, according to the Article 11 of the Private Housing Finance Law, the New York City Housing Preservation Development, which eliminated real estate taxes at the property and provided for enhanced rental revenues, rental recoveries for assisted tenants which are beginning to receive meaningful amounts. As a result, we are aggressively fulfilling our commitments for property improvements and assistance in higher wages. Operationally, we are very pleased with our new ground-up development at Pacific House, At 1010 Pacific Street in Brooklyn, after a year of full operation, it's fully stabilized and is contributing to cash flow. It is now 100% leased and yielding the projected 7% cap rate as projected. At the nearby 953 Dean Street, ground-up construction is proceeding ahead of schedule. We completed the superstructure ahead of schedule. Expect to complete construction in time for 2025 leasing season. utilizing the $123 million construction loan we entered into last year. We bought the land in 2021 and 2022 on which to build a nine-story fully amenitized residential complex with 160,000 residential square feet, 240 total units, 70% free market and 30% affordable, and 8,500 commercial rental square feet. At 250 Livingston Street, Whereas previously the Sloan New York City notified us of their intention to vacate in August of 2025, we are seeking solutions and pursuing opportunities supported by cash flows from our other properties. Of course, we will keep you informed as of our progress regularly. At our other New York City office property, 141 Livingston Street, we are actively negotiating a five-year extension to our current lease that expires in December 2025. but we cannot assure that this will be completed favorably. Also, we have begun thinking about recycling properties at our portfolio to maximize performance and improve cash flow. As such, we have begun preliminarily marketing activities for some of our other properties, including 10 West 65th Street, while potentially resulting in some loss compared to book value would allow us to achieve better overall returns going forward. We will announce any definitive arrangements promptly as they arise. As for the continued high interest rate environment, we believe the higher rates make for higher tenant demand for our rental product versus the purchase option. We are also buttressed by the relatively long duration of debt on our operating properties. Our operating debt is 91% fixed, an average rate of 3.87%, an average duration of 4.9 years, is non-recourse, subject to limited standard carve-outs, and is not cross-collateralized. We finance our properties on an asset-based basis and not cross-collateralized. With regard to our second quarter results, we are reporting record quarterly revenue of $37.3 million NOI of $21.1 million, and an AFO of $7.1 million as a result of the strong leasing and cost reductions I just mentioned. These results represent improvements Over the second quarter last year, JJ and I referred to the details. I will now turn the call over to JJ who will provide an update on operational.