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Clipper Realty Inc. Announces Third Quarter 2024 Results

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Clipper Realty reported record quarterly revenues of $37.6 million for Q3 2024, a 6.8% increase year-over-year. The company achieved record NOI of $21.8 million and AFFO of $7.8 million. Residential revenue grew 9.2% driven by higher rental rates and occupancy. The company reported a net loss of $1.1 million, improving from a $2.3 million loss in Q3 2023. New leases exceeded previous rents by nearly 10% and renewals by 6%. The company declared a quarterly dividend of $0.095 per share. Notes payable increased to $1,267.8 million due to construction loan draws for Dean Street development.

Clipper Realty ha riportato ricavi trimestrali record di 37,6 milioni di dollari per il terzo trimestre del 2024, con un aumento del 6,8% rispetto all'anno precedente. L'azienda ha raggiunto un NOI record di 21,8 milioni di dollari e un AFFO di 7,8 milioni di dollari. I ricavi residenziali sono aumentati del 9,2%, grazie a tassi di affitto più elevati e a tassi di occupazione. L'azienda ha registrato una perdita netta di 1,1 milioni di dollari, in miglioramento rispetto a una perdita di 2,3 milioni di dollari nel terzo trimestre del 2023. I nuovi contratti di affitto hanno superato i canoni precedenti di quasi il 10% e i rinnovi del 6%. L'azienda ha dichiarato un dividendo trimestrale di 0,095 dollari per azione. Le note da pagare sono aumentate a 1.267,8 milioni di dollari a causa dei prelievi di prestiti per la costruzione dello sviluppo di Dean Street.

Clipper Realty reportó ingresos trimestrales récord de 37.6 millones de dólares para el tercer trimestre de 2024, un aumento del 6.8% en comparación con el año anterior. La empresa logró un NOI récord de 21.8 millones de dólares y un AFFO de 7.8 millones de dólares. Los ingresos residenciales crecieron un 9.2% impulsados por mayores tarifas de alquiler y ocupación. La compañía reportó una pérdida neta de 1.1 millones de dólares, mejorando desde una pérdida de 2.3 millones de dólares en el tercer trimestre de 2023. Los nuevos arrendamientos superaron los alquileres anteriores en casi un 10% y las renovaciones en un 6%. La compañía declaró un dividendo trimestral de 0.095 dólares por acción. Las notas por pagar aumentaron a 1,267.8 millones de dólares debido a los retiros de préstamos de construcción para el desarrollo de Dean Street.

클리퍼 리얼티는 2024년 3분기에 3,760만 달러의 분기 기록 매출을 보고했으며, 이는 전년 대비 6.8% 증가한 수치입니다. 회사는 2,180만 달러의 NOI 기록과 780만 달러의 AFFO를 달성했습니다. 주거 매출은 임대료와 점유율 증가에 힘입어 9.2% 성장했습니다. 회사는 110만 달러의 순손실을 보고했으며, 이는 2023년 3분기에 230만 달러의 손실에서 개선된 결과입니다. 새로운 임대 계약은 기존 임대료보다 거의 10% 증가했으며, 갱신은 6% 증가했습니다. 회사는 주당 0.095 달러의 분기 배당금을 선언했습니다. 지급해야 할 노트는 Dean Street 개발을 위한 건설 대출 인출로 인해 12억 6,780만 달러로 증가했습니다.

Clipper Realty a rapporté des revenus trimestriels record de 37,6 millions de dollars pour le troisième trimestre 2024, ce qui représente une augmentation de 6,8% par rapport à l'année précédente. La société a atteint un NOI record de 21,8 millions de dollars et un AFFO de 7,8 millions de dollars. Les revenus résidentiels ont augmenté de 9,2%, grâce à des loyers plus élevés et des taux d'occupation accrus. L'entreprise a signalé une perte nette de 1,1 million de dollars, en amélioration par rapport à une perte de 2,3 millions de dollars au troisième trimestre 2023. Les nouveaux baux ont dépassé les loyers précédents de près de 10% et les renouvellements de 6%. L'entreprise a déclaré un dividende trimestriel de 0,095 dollars par action. Les notes à payer ont augmenté à 1 267,8 millions de dollars en raison des tirages de prêts de construction pour le développement de Dean Street.

Clipper Realty berichtete von rekordverdächtigen vierteljährlichen Einnahmen in Höhe von 37,6 Millionen Dollar für das 3. Quartal 2024, was einem Anstieg von 6,8% im Vergleich zum Vorjahr entspricht. Das Unternehmen erzielte einen Rekord-NOI von 21,8 Millionen Dollar und ein AFFO von 7,8 Millionen Dollar. Die Einnahmen aus Wohnimmobilien stiegen um 9,2%, bedingt durch höhere Mietpreise und Belegungsraten. Das Unternehmen meldete einen Nettoverlust von 1,1 Millionen Dollar, eine Verbesserung im Vergleich zu einem Verlust von 2,3 Millionen Dollar im 3. Quartal 2023. Neue Mietverträge überstiegen die vorherigen Mieten um fast 10% und Verlängerungen um 6%. Das Unternehmen erklärte eine vierteljährliche Dividende von 0,095 Dollar pro Aktie. Die zu zahlenden Anleihen stiegen auf 1.267,8 Millionen Dollar aufgrund von Baukreditabrufen für die Entwicklung von Dean Street.

Positive
  • Record quarterly revenue of $37.6M, up 6.8% YoY
  • Record NOI of $21.8M and AFFO of $7.8M
  • Residential revenue increased 9.2%
  • New lease rates up 10% and renewals up 6%
  • Net loss reduced from $2.3M to $1.1M YoY
Negative
  • Quarterly net loss of $1.1M
  • Increased bad debt expense at Flatbush Gardens
  • Higher property taxes and payroll costs
  • NYC tenant plans to vacate 250 Livingston Street in 2025
  • Potential loss on 10W 65th Street property sale

Insights

The Q3 2024 results show mixed performance with some concerning trends. While achieving record quarterly revenue of $37.6 million (up 6.8% YoY) and improved NOI of $21.8 million, the company still posted a net loss of $1.1 million. The residential segment shows strength with 9.2% revenue growth and strong lease spreads (new leases up 10%, renewals up 6%). However, several challenges exist: potential property recycling with expected losses, upcoming tenant vacancies at 250 Livingston Street and increased operating costs from property taxes and payroll. The maintained dividend of $0.095 per share and high debt levels ($1.27 billion) require careful monitoring. The Dean Street development progress is a positive, but portfolio restructuring signals potential near-term volatility.

NEW YORK--(BUSINESS WIRE)-- Clipper Realty Inc. (NYSE: CLPR) (the “Company”), a leading owner and operator of multifamily residential and commercial properties in the New York metropolitan area, today announced financial and operating results for the three months ended September 30, 2024.

Highlights for the Three Months Ended September 30, 2024

  • Record quarterly revenues of $37.6 million for the third quarter of 2024
  • Quarterly income from operations of $10.8 million for the third quarter of 2024
  • Record net operating income (“NOI”)1 of $21.8 million for the third quarter of 2024
  • Quarterly net loss of $1.1 million for the third quarter of 2024
  • Record adjusted funds from operations (“AFFO”)1 of $7.8 million for the third quarter of 2024
  • Declared a dividend of $0.095 per share for the third quarter of 2024

David Bistricer, Co-Chairman, and Chief Executive Officer, commented,

“The Company continued to grow its revenue, NOI and AFFO in the third quarter of 2024, producing record results for all these metrics on the basis of our very strong residential leasing. We continue to have high occupancy and good renter demand in our buildings. For all our properties, new leases exceeded previous rents by nearly 10% and renewals by nearly 6%. At Flatbush Gardens, as a result of the Article 11 agreement with New York City, we are continuing to increase enhanced rental recoveries under Section 610 as we continue to make the committed capital improvements and other improvements in the property. At our 250 Livingston Street property, where we previously disclosed New York City’s notification of its intention to vacate in late August 2025, we continue to actively seek solutions and pursue opportunities. At our nearby 141 Livingston Street property, we are in active discussions for a lease renewal. Our Dean Street new development continues to progress ahead of schedule, and we are confident of an on-time completion next year to capture the 2025 leasing season. Lastly, we have begun thinking about recycling properties in our portfolio to maximize performance and improve cash flow. As such, we are continuing marketing activities for some of our properties, including our 10W 65th Street property, which, 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.”

Financial Results for the Three Months Ended September 30, 2024

For the third quarter of 2024, revenues increased by $2.4 million, or 6.8%, to $37.6 million as compared to revenue of $35.2 million during the third quarter of 2023. Residential revenue increased by $2.3 million, or 9.2%, driven by higher rental rates at all our residential properties and higher occupancy partially offset increased bad debt expense at the Flatbush Gardens property. Commercial income increased by $0.1 million, or 0.9%, in the third quarter of 2024 due to higher escalation income at our office properties.

For the third quarter of 2024, net loss was $1.1 million, or $0.05 per share compared to net loss of $2.3 million, or $0.09 per share, for the third quarter of 2023. The lower net loss as compared to last year was primarily due to increased rental revenue discussed above, partially offset by higher property taxes at properties other than Flatbush Gardens and, higher payroll costs from “prevailing wage” requirements at the Flatbush Gardens property under the Article 11 transaction, and higher depreciation expense from capital spending.

For the third quarter of 2024, AFFO was $7.8 million, or $0.18 per share, compared to $6.3 million, or $0.15 per share, for the third quarter of 2023. As discussed above, the increase was primarily due to increased rental revenue partially offset by higher property taxes and higher payroll costs.

__________

1 NOI and AFFO are non-GAAP financial measures. For a definition of these financial measures and a reconciliation of such measures to the most comparable GAAP measures, see “Reconciliation of Non-GAAP Measures” at the end of this release.

Balance Sheet

At September 30, 2024, notes payable (excluding unamortized loan costs) was $1,267.8 million, compared to $1,219.0 million at December 31, 2023. The increase was primarily due to draws made on Dean Street development construction loan.

Dividend

The Company today declared a third quarter dividend of $0.095 per share, the same amount as last quarter, to shareholders of record on November 13, 2024, payable November 27, 2024.

Conference Call and Supplemental Material

The Company will host a conference call on October 31, 2024, at 5:00 PM Eastern Time to discuss the third quarter 2024 results and provide a business update. The conference call can be accessed by dialing (800) 346-7359 or (973) 528-0008, conference entry code 308211. A replay of the call will be available from October 31, 2024, following the call, through November 14, 2024, by dialing (800) 332-6854 or (973) 528-0005, replay conference ID 308211. Supplemental data to this press release can be found under the “Quarterly Earnings” navigation tab on the “Investors” page of our website at www.clipperrealty.com. The Company’s filings with the Securities and Exchange Commission (the “SEC”) are filed at www.sec.gov under Clipper Realty Inc.

About Clipper Realty Inc.

Clipper Realty Inc. (NYSE: CLPR) is a self-administered and self-managed real estate company that acquires, owns, manages, operates, and repositions multifamily residential and commercial properties in the New York metropolitan area, with a portfolio in Manhattan and Brooklyn. For more information on the Company, please visit www.clipperrealty.com.

Forward-Looking Statements

Various statements contained in this press release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include estimates concerning capital projects and the success of specific properties. Our forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "intend," "anticipate," "potential," "plan" or other words that convey the uncertainty of future events or outcomes. The forward-looking statements in this press release speak only as of the date of this press release.

We disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties), most of which are difficult to predict and many of which are beyond our control and which may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. For a discussion of these and other important factors that could affect our actual results, please refer to our filings with the SEC, including the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2023, and other reports filed from time to time with the SEC.

Clipper Realty Inc.

Consolidated Balance Sheets

(In thousands, except for share and per share data)

 

 

 

September 30,
2024

 

 

December 31,
2023

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Investment in real estate

 

 

 

 

 

 

 

 

Land and improvements

 

$

571,988

 

 

$

571,988

 

Building and improvements

 

 

735,208

 

 

 

726,273

 

Tenant improvements

 

 

3,366

 

 

 

3,366

 

Furniture, fixtures and equipment

 

 

13,758

 

 

 

13,278

 

Real estate under development

 

 

137,685

 

 

 

87,285

 

Total investment in real estate

 

 

1,462,005

 

 

 

1,402,190

 

Accumulated depreciation

 

 

(235,817

)

 

 

(213,606

)

Investment in real estate, net

 

 

1,226,188

 

 

 

1,188,584

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

18,622

 

 

 

22,163

 

Restricted cash

 

 

17,472

 

 

 

14,062

 

Tenant and other receivables, net of allowance for doubtful accounts of $252 and $234, respectively

 

 

6,317

 

 

 

5,181

 

Deferred rent

 

 

2,191

 

 

 

2,359

 

Deferred costs and intangible assets, net

 

 

5,783

 

 

 

6,127

 

Prepaid expenses and other assets

 

 

10,444

 

 

 

10,854

 

TOTAL ASSETS

 

$

1,287,017

 

 

$

1,249,330

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Notes payable, net of unamortized loan costs of $10,115 and $13,405, respectively

 

$

1,257,731

 

 

$

1,205,624

 

Accounts payable and accrued liabilities

 

 

21,768

 

 

 

20,994

 

Security deposits

 

 

9,044

 

 

 

8,765

 

Other liabilities

 

 

7,937

 

 

 

6,712

 

TOTAL LIABILITIES

 

 

1,296,480

 

 

 

1,242,095

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value; 100,000 shares authorized (including 140 shares of 12.5% Series A cumulative non-voting preferred stock), zero shares issued and outstanding

 

 

-

 

 

 

-

 

Common stock, $0.01 par value; 500,000,000 shares authorized, 16,077,290 shares issued and outstanding

 

 

160

 

 

 

160

 

Additional paid-in-capital

 

 

89,818

 

 

 

89,483

 

Accumulated deficit

 

 

(93,562

)

 

 

(86,899

)

Total stockholders' equity

 

 

(3,584

)

 

 

2,744

 

 

 

 

 

 

 

 

 

 

Non-controlling interests

 

 

(5,879

)

 

 

4,491

 

TOTAL EQUITY (DEFICIT)

 

 

(9,463

)

 

 

7,235

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND EQUITY (DEFICIT)

 

$

1,287,017

 

 

$

1,249,330

 

Clipper Realty Inc.

Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential rental income

 

$

27,846

 

 

$

25,501

 

 

$

81,700

 

 

$

74,481

 

Commercial rental income

 

 

9,776

 

 

 

9,627

 

 

 

29,028

 

 

 

28,857

 

TOTAL REVENUES

 

 

37,622

 

 

 

35,128

 

 

 

110,728

 

 

 

103,338

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property operating expenses

 

 

8,482

 

 

 

7,930

 

 

 

26,098

 

 

 

22,811

 

Real estate taxes and insurance

 

 

7,562

 

 

 

7,374

 

 

 

22,137

 

 

 

24,610

 

General and administrative

 

 

3,370

 

 

 

3,340

 

 

 

10,380

 

 

 

10,029

 

Transaction pursuit costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

357

 

Depreciation and amortization

 

 

7,456

 

 

 

7,282

 

 

 

22,289

 

 

 

21,376

 

TOTAL OPERATING EXPENSES

 

 

26,870

 

 

 

25,926

 

 

 

80,904

 

 

 

79,183

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

 

10,752

 

 

 

9,202

 

 

 

29,824

 

 

 

24,155

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(11,840

)

 

 

(11,527

)

 

 

(35,320

)

 

 

(32,996

)

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,868

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(1,088

)

 

 

(2,325

)

 

 

(5,496

)

 

 

(12,709

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to non-controlling interests

 

 

676

 

 

 

1,444

 

 

 

3,414

 

 

 

7,892

 

Net loss attributable to common stockholders

 

$

(412

)

 

$

(881

)

 

$

(2,082

)

 

$

(4,817

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share

 

$

(0.05

)

 

$

(0.09

)

 

$

(0.20

)

 

$

(0.36

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares / OP units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding

 

 

16,077

 

 

 

16,063

 

 

 

16,072

 

 

 

16,063

 

OP units outstanding

 

 

26,317

 

 

 

26,317

 

 

 

26,317

 

 

 

26,317

 

Diluted shares outstanding

 

 

42,394

 

 

 

42,380

 

 

 

42,389

 

 

 

42,380

 

Clipper Realty Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net loss

 

$

(5,496

)

 

$

(12,709

)

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

Depreciation

 

 

22,211

 

 

 

21,296

 

Amortization of deferred financing costs

 

 

1,591

 

 

 

1,098

 

Amortization of deferred costs and intangible assets

 

 

440

 

 

 

441

 

Amortization of above- and below-market leases

 

 

-

 

 

 

(18

)

Loss on extinguishment of debt

 

 

-

 

 

 

3,868

 

Deferred rent

 

 

168

 

 

 

66

 

Stock-based compensation

 

 

1,987

 

 

 

2,214

 

Bad debt expense

 

 

24

 

 

 

(120

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Tenant and other receivables

 

 

(1,160

)

 

 

(103

)

Prepaid expenses, other assets and deferred costs

 

 

315

 

 

 

3,328

 

Accounts payable and accrued liabilities

 

 

(247

)

 

 

(4,366

)

Security deposits

 

 

279

 

 

 

713

 

Other liabilities

 

 

1,225

 

 

 

1,422

 

Net cash provided by operating activities

 

 

21,337

 

 

 

17,130

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Additions to land, buildings and improvements

 

 

(57,097

)

 

 

(27,783

)

Net cash used in investing activities

 

 

(57,097

)

 

 

(27,783

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Payments of mortgage notes

 

 

(1,483

)

 

 

(84,241

)

Proceeds from mortgage notes

 

 

50,300

 

 

 

124,858

 

Dividends and distributions

 

 

(13,188

)

 

 

(13,044

)

Loan issuance and extinguishment costs

 

 

-

 

 

 

(10,232

)

Net cash provided by financing activities

 

 

35,629

 

 

 

17,341

 

 

 

 

 

 

 

 

 

 

Net (decrease) increase in cash and cash equivalents and restricted cash

 

 

(131

)

 

 

6,688

 

Cash and cash equivalents and restricted cash - beginning of period

 

 

36,225

 

 

 

30,666

 

Cash and cash equivalents and restricted cash - end of period

 

$

36,094

 

 

$

37,354

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents and restricted cash - beginning of period:

 

 

 

 

 

Cash and cash equivalents

 

$

22,163

 

 

$

18,152

 

Restricted cash

 

 

14,062

 

 

 

12,514

 

Total cash and cash equivalents and restricted cash - beginning of period

 

$

36,225

 

 

$

30,666

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents and restricted cash - end of period:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

18,622

 

 

$

22,450

 

Restricted cash

 

 

17,472

 

 

 

14,904

 

Total cash and cash equivalents and restricted cash - end of period

 

$

36,094

 

 

$

37,354

 

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest, net of capitalized interest of $2,343 and $2,382 in 2024 and 2023, respectively

 

$

32,672

 

 

$

32,924

 

Non-cash interest capitalized to real estate under development

 

 

1,698

 

 

 

339

 

Additions to investment in real estate included in accounts payable and accrued liabilities

 

 

10,504

 

 

 

5,102

 

Clipper Realty Inc.
Reconciliation of Non-GAAP Measures
(In thousands, except per share data)

Non-GAAP Financial Measures

We disclose and discuss funds from operations (“FFO”), adjusted funds from operations (“AFFO”), adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”) and net operating income (“NOI”), all of which meet the definition of “non-GAAP financial measures” set forth in Item 10(e) of Regulation S-K promulgated by the SEC.

While management and the investment community in general believe that presentation of these measures provides useful information to investors, neither FFO, AFFO, Adjusted EBITDA, nor NOI should be considered as an alternative to net income (loss) or income from operations as an indication of our performance. We believe that to understand our performance further, FFO, AFFO, Adjusted EBITDA, and NOI should be compared with our reported net income (loss) or income from operations and considered in addition to cash flows computed in accordance with GAAP, as presented in our consolidated financial statements.

Funds From Operations and Adjusted Funds From Operations

FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and impairment adjustments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Our calculation of FFO is consistent with FFO as defined by NAREIT.

AFFO is defined by us as FFO excluding amortization of identifiable intangibles incurred in property acquisitions, straight-line rent adjustments to revenue from long-term leases, amortization costs incurred in originating debt, interest rate cap mark-to-market adjustments, amortization of non-cash equity compensation, acquisition and other costs, transaction pursuit costs, loss on modification/extinguishment of debt, gain on involuntary conversion, gain on termination of lease and non-recurring litigation-related expenses, less recurring capital spending.

Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. In fact, real estate values have historically risen or fallen with market conditions. FFO is intended to be a standard supplemental measure of operating performance that excludes historical cost depreciation and valuation adjustments from net income. We consider FFO useful in evaluating potential property acquisitions and measuring operating performance. We further consider AFFO useful in determining funds available for payment of distributions. Neither FFO nor AFFO represent net income or cash flows from operations computed in accordance with GAAP. You should not consider FFO and AFFO to be alternatives to net income (loss) as reliable measures of our operating performance; nor should you consider FFO and AFFO to be alternatives to cash flows from operating, investing or financing activities (computed in accordance with GAAP) as measures of liquidity.

Neither FFO nor AFFO measure whether cash flow is sufficient to fund all of our cash needs, including loan principal amortization, capital improvements and distributions to stockholders. FFO and AFFO do not represent cash flows from operating, investing or financing activities computed in accordance with GAAP. Further, FFO and AFFO as disclosed by other REITs might not be comparable to our calculations of FFO and AFFO.

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,088

)

 

$

(2,325

)

 

$

(5,496

)

 

$

(12,709

)

Real estate depreciation and amortization

 

 

7,456

 

 

 

7,282

 

 

 

22,289

 

 

 

21,376

 

FFO

 

$

6,368

 

 

$

4,957

 

 

$

16,793

 

 

$

8,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AFFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

$

6,368

 

 

$

4,957

 

 

$

16,793

 

 

$

8,667

 

Amortization of real estate tax intangible

 

 

120

 

 

 

120

 

 

 

361

 

 

 

361

 

Amortization of above- and below-market leases

 

 

-

 

 

 

(1

)

 

 

-

 

 

 

(18

)

Straight-line rent adjustments

 

 

81

 

 

 

39

 

 

 

168

 

 

 

66

 

Amortization of debt origination costs

 

 

530

 

 

 

423

 

 

 

1,591

 

 

 

1,098

 

Amortization of LTIP awards

 

 

713

 

 

 

783

 

 

 

1,987

 

 

 

2,214

 

Transaction pursuit costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

357

 

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,868

 

Certain litigation-related expenses

 

 

 

(10

)

 

 

-

 

 

 

(10

)

Recurring capital spending

 

 

(50

)

 

 

(51

)

 

 

(184

)

 

 

(375

)

AFFO

 

$

7,762

 

 

$

6,260

 

 

$

20,716

 

 

$

16,228

 

AFFO Per Share/Unit

 

$

0.18

 

 

$

0.15

 

 

$

0.49

 

 

$

0.38

 

Adjusted Earnings Before Interest, Income Taxes, Depreciation and Amortization

We believe that Adjusted EBITDA is a useful measure of our operating performance. We define Adjusted EBITDA as net income (loss) before allocation to non-controlling interests, plus real estate depreciation and amortization, amortization of identifiable intangibles, straight-line rent adjustments to revenue from long-term leases, amortization of non-cash equity compensation, interest expense (net), acquisition and other costs, transaction pursuit costs, loss on modification/extinguishment of debt and non-recurring litigation-related expenses, less gain on involuntary conversion and gain on termination of lease.

We believe that this measure provides an operating perspective not immediately apparent from GAAP income from operations or net income (loss). We consider Adjusted EBITDA to be a meaningful financial measure of our core operating performance.

However, Adjusted EBITDA should only be used as an alternative measure of our financial performance. Further, other REITs may use different methodologies for calculating Adjusted EBITDA, and accordingly, our Adjusted EBITDA may not be comparable to that of other REITs.

The following table sets forth a reconciliation of Adjusted EBITDA for the periods presented to net loss, computed in accordance with GAAP (amounts in thousands):

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,088

)

 

$

(2,325

)

 

$

(5,496

)

 

$

(12,709

)

Real estate depreciation and amortization

 

 

7,456

 

 

 

7,282

 

 

 

22,289

 

 

 

21,376

 

Amortization of real estate tax intangible

 

 

120

 

 

 

120

 

 

 

361

 

 

 

361

 

Amortization of above- and below-market leases

 

 

-

 

 

 

(1

)

 

 

-

 

 

 

(18

)

Straight-line rent adjustments

 

 

81

 

 

 

39

 

 

 

168

 

 

 

66

 

Amortization of LTIP awards

 

 

713

 

 

 

783

 

 

 

1,987

 

 

 

2,214

 

Interest expense, net

 

 

11,840

 

 

 

11,527

 

 

 

35,320

 

 

 

32,996

 

Transaction pursuit costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

357

 

Loss on extinguishment of debt/modification of debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,868

 

Certain litigation-related expenses

 

 

-

 

 

 

(10

)

 

 

-

 

 

 

(10

)

Adjusted EBITDA

 

$

19,122

 

 

$

17,415

 

 

$

54,629

 

 

$

48,501

 

Net Operating Income

We believe that NOI is a useful measure of our operating performance. We define NOI as income from operations plus real estate depreciation and amortization, general and administrative expenses, acquisition and other costs, transaction pursuit costs, amortization of identifiable intangibles and straight-line rent adjustments to revenue from long-term leases, less gain on termination of lease. We believe that this measure is widely recognized and provides an operating perspective not immediately apparent from GAAP income from operations or net income (loss). We use NOI to evaluate our performance because NOI allows us to evaluate the operating performance of our company by measuring the core operations of property performance and capturing trends in rental housing and property operating expenses. NOI is also a widely used metric in valuation of properties.

However, NOI should only be used as an alternative measure of our financial performance. Further, other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to that of other REITs.

The following table sets forth a reconciliation of NOI for the periods presented to income from operations, computed in accordance with GAAP (amounts in thousands):

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

NOI

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

$

10,752

 

 

$

9,202

 

 

$

29,824

 

 

$

24,155

 

Real estate depreciation and amortization

 

 

7,456

 

 

 

7,282

 

 

 

22,289

 

 

 

21,376

 

General and administrative expenses

 

 

3,370

 

 

 

3,340

 

 

 

10,380

 

 

 

10,029

 

Transaction pursuit costs

 

 

-

 

 

 

-

 

 

 

-

 

 

 

357

 

Amortization of real estate tax intangible

 

 

121

 

 

 

120

 

 

 

361

 

 

 

361

 

Amortization of above- and below-market leases

 

 

-

 

 

 

(1

)

 

 

-

 

 

 

(18

)

Straight-line rent adjustments

 

 

81

 

 

 

39

 

 

 

168

 

 

 

66

 

NOI

 

$

21,780

 

 

$

19,982

 

 

$

63,022

 

 

$

56,326

 

 

Lawrence Kreider

Chief Financial Officer

(718) 438-2804 x2231

larry@clipperrealty.com

Source: Clipper Realty Inc.

FAQ

What was Clipper Realty's (CLPR) revenue in Q3 2024?

Clipper Realty reported record quarterly revenues of $37.6 million in Q3 2024, representing a 6.8% increase from $35.2 million in Q3 2023.

What was CLPR's net loss in Q3 2024?

Clipper Realty reported a net loss of $1.1 million ($0.05 per share) in Q3 2024, compared to a net loss of $2.3 million ($0.09 per share) in Q3 2023.

What dividend did CLPR declare for Q3 2024?

Clipper Realty declared a dividend of $0.095 per share for Q3 2024, payable on November 27, 2024, to shareholders of record on November 13, 2024.

How much did CLPR's residential revenue increase in Q3 2024?

Clipper Realty's residential revenue increased by $2.3 million, or 9.2%, driven by higher rental rates at all residential properties and higher occupancy.

Clipper Realty Inc.

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