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, Lawrence Sava, Corporate Controller. Sir, the floor is yours.

Good afternoon, and thank you for joining us for the third quarter 2024 Clipper Realty, Inc. Earnings Conference Call. Participating with me on today's call are David Bissesser, Co-Chairman of the Board and Chief Executive Officer, J.J. Bischusser, Chief Operating Officer, and Larry Kreider, Chief Financial 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.sec.gov and on our website. As a reminder, the forward-looking statements speak only as of the date of this call, October 31, 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, amortization, or adjusted EBITDA, and net operating income, or NOI. CCR Press Release Supplemental Financial Information and Form 10-Q posted today for a reconciliation of those non-GAAP financial measures with the most directly comparable GAAP financial measures. With that, I will turn our call over to Larry Kreider, our Chief Financial Officer, as Mr. Bistresser has laryngitis.

Thank you, Lawrence. Good afternoon and welcome to the third 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 Lawrence Sava will speak to our quarterly financial performance. We will then take your questions. I'm pleased to report that we are reporting record operating results once again, including record revenue, net operating income, and AFFO based on excellent residential activity. Rental demand continues to be strong at all of our properties. Overall rents are generally at all-time highs and continuing to increase, and we are nearly fully leased. In the third quarter, new leases exceeded prior rents by over 9.5% across the entire market-based portfolio led by Tribeca House Property in Manhattan and the Clover House Property in Brooklyn, where new leases were over $95 and $87 per square foot, and overall rents were over $82 and $85 per square foot, all compared to roughly $63 per square foot at the end of December 2021. Results in our stabilized property, Flatbush Gardens property, are also strong and improving. We are expeditiously fulfilling our commitments for property improvements, tenant assistance, and higher wages, supported by the full abatement of real estate taxes and enhanced recoveries under Article 11 of the private housing finance law with New York City's Housing and Preservation Department that began in July 2023. Operationally, we are very pleased with our ground-up development projects, Pacific House at 1010 Pacific Street in Brooklyn, after a year of full operation, is fully stabilized and is contributing to cash flow. It is now 100% leased and yielding the projected 7% cap rate. At the nearby Dean Street, ground-up development construction is proceeding ahead of schedule. We completed the superstructure ahead of schedule and expect to complete construction in time for the 2025 leasing season, utilizing the $123 million construction loan we entered last year. We bought the land in 2021 and 2022 on which to build a nine-story fully amenitized residential building with 160,000 residential rentable square feet, 240 total units, 70% free market and 30% affordable, and 8,500 square feet of commercial rental space. At our 250 Livingston Street property, where as previously disclosed, New York City notified us of their intention to vacate in August 2025, we are seeking solutions and pursuing opportunities supported by cash flows from our other properties. Of course, we will keep you informed of our progress regularly. At our other New York City property, 141 Livingston Street, We are actively negotiating a five-year extension to our current lease that expires December 2025, but we cannot assure that this will be completed safely. Also, as announced last quarter, we have begun the process of recycling properties in our portfolio to maximize performance and improve cash flow. As such, we continue to market some of our properties, including our 10 West 65th Street property, which, while potentially resulting in some loss compared to book value, would allow us to achieve better overall returns going forward. No definitive agreements as yet, and we will announce promptly when done. As to the high interest rate environment, we believe the higher rates make for higher demand, rental demand for our rental product. We are also buttressed by the relatively long duration of debt at our properties. Our operating debt is 91% fixed at an average rate of 3.87%. and an average duration of 4.9 years. It is non-recourse, subject to limited standard carve-outs, and is not cross-collateralized. We finance our portfolio on an asset-by-asset basis. Regarding our third quarter results, we are reporting record quarterly revenue of $37.6 million, NOI of $21.8 million, and AFFO of $7.8 million as a result of the strong leasing and cost reduction I just mentioned. These results represent improvements over the third quarter last year, as JJ and Lawrence will further detail. I will now turn the call over to JJ, who will provide an update on operations.