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 June 30, 2023.
Highlights for the Three Months Ended June 30, 2023
- Record quarterly revenues of $34.5 million for the second quarter of 2023
- Quarterly income from operations of $8.0 million for the second quarter of 2023
- Record net operating income (“NOI”) of $19.2 million for the second quarter of 2023
- Quarterly net loss of $3.3 million for the second quarter of 2023
- Quarterly adjusted funds from operations (“AFFO”)1 of $5.5 million for the second quarter of 2023
- Declared a dividend of $0.095 per share for the second quarter of 2023
David Bistricer, Co-Chairman and Chief Executive Officer, commented,
“The second quarter of 2023 for the Company has produced record quarterly revenue and NOI and the highest AFFO in 3 years. This is the fourth straight quarter of record revenue and demonstrates the strength of the current rental market. New leases continue to rent at more than 14% over previous ones. This has resulted in record revenue for the quarter, even when we remove the revenue from our newly opened Pacific House building. In the second quarter, we recorded record revenue of $34.5 million, NOI of $19.2 million, same store leased occupancy of 99.2% and our overall collection rate remains high at 96.3%. We have also begun operations at the 1010 Pacific Street building, branded “Pacific House”, already over 77% leased. Last month we announced that Flatbush Gardens entered into a 40-year regulatory agreement with the New York City Department of Housing Preservation and Development (“HPD”) under Article 11 of the Private Housing Finance Law. This agreement will enable us to put Flatbush Gardens on an upward projection by providing us with the additional funds to invest in the property via full property tax exemptions and the opportunity to receive enhanced reimbursements for those tenants who receive governmental support. We are very excited for the future of Flatbush Gardens. We feel that our strong leasing and occupancy performance, the Article 11 transaction, our loan portfolio being over 90% fixed with no maturities until 2027 puts us in a strong position to continue executing our strategic initiatives and create long-term value.”
Financial Results
For the second quarter of 2023, revenues increased by $2.7 million, or 8.3%, to $33.7 million and $1.9 million, or 5.8% excluding revenue from Pacific House in the second quarter of 2023. This compares to revenue of $31.9 million during the second quarter of 2022. Residential revenue increased by $2.4 million, or 10.9%, and $1.6 million, or 7.3% excluding revenue from Pacific House in the second quarter of 2023 driven by higher rental rates at all our residential properties. Commercial income increased $0.2 million, or 2.3%, in the second quarter of 2023 due to new commercial leases signed during 2022.
For the second quarter of 2023, net loss was $3.3 million, or $0.10 per share or $2.6 million, or $0.05 per share excluding the net loss attributable to Pacific House operations, compared to net loss of $3.0 million, or $0.08 per share, for the second quarter of 2022. The adjusted change was primarily attributable to increased rental revenue discussed above and lower property operating costs, net of higher insurance, real estate taxes, general and administrative costs, and interest expense.
For the second quarter of 2023, AFFO was $5.5 million, or $0.13 per share, or $5.8 million or $0.14 per share excluding the impact of Pacific House, compared to $5.1 million, or $0.12 per share, for the second quarter of 2022. The adjusted increase was primarily attributable to the rental revenue discussed above and lower property operating costs, net of higher insurance, real estate taxes, general and administrative costs.
Balance Sheet
At June 30, 2023, notes payable (excluding unamortized loan costs) was $1,186.8 million, compared to $1,171.2 million at December 31, 2022. The increase was primarily due to the refinancing of the Pacific House loan in the first quarter of 2023.
Dividend
The Company today declared a second quarter dividend of $0.095 per share, the same amount as last quarter, to shareholders of record on August 15, 2023, payable on August 23, 2023.
Conference Call and Supplemental Material
The Company will host a conference call on August 3, 2023, at 5:00 PM Eastern Time to discuss the second quarter 2023 results and provide a business update. The conference call can be accessed by dialing (800) 346-7359 or (973) 528-0008, conference entry code 754613. A replay of the call will be available from August 3, 2023, following the call, through August 17, 2023, by dialing (800) 332-6854 or (973) 528-0005, replay conference ID 754613. 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, 2022, and other reports filed from time to time with the SEC.
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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.
Clipper Realty Inc. | ||||||||
Consolidated Balance Sheets | ||||||||
(In thousands, except for share and per share data) | ||||||||
June 30, 2023 | December 31, 2022 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Investment in real estate | ||||||||
Land and improvements | $ | 571,988 | $ | 540,859 | ||||
Building and improvements | 718,661 | 656,460 | ||||||
Tenant improvements | 3,406 | 3,406 | ||||||
Furniture, fixtures and equipment | 13,062 | 12,878 | ||||||
Real estate under development | 66,361 | 142,287 | ||||||
Total investment in real estate | 1,373,478 | 1,355,890 | ||||||
Accumulated depreciation | (198,825 | ) | (184,781 | ) | ||||
Investment in real estate, net | 1,174,653 | 1,171,109 | ||||||
Cash and cash equivalents | 16,342 | 18,152 | ||||||
Restricted cash | 14,731 | 12,514 | ||||||
Tenant and other receivables, net of allowance for doubtful accounts of $175 and $321, respectively | 5,169 | 5,005 | ||||||
Deferred rent | 2,546 | 2,573 | ||||||
Deferred costs and intangible assets, net | 6,418 | 6,624 | ||||||
Prepaid expenses and other assets | 5,960 | 13,654 | ||||||
TOTAL ASSETS | $ | 1,225,819 | $ | 1,229,631 | ||||
LIABILITIES AND EQUITY | ||||||||
Liabilities: | ||||||||
Notes payable, net of unamortized loan costs of $9,803 and $9,650, respectively | $ | 1,176,956 | $ | 1,161,588 | ||||
Accounts payable and accrued liabilities | 15,319 | 17,094 | ||||||
Security deposits | 8,660 | 7,940 | ||||||
Below-market leases, net | 1 | 18 | ||||||
Other liabilities | 5,353 | 5,812 | ||||||
TOTAL LIABILITIES | 1,206,289 | 1,192,452 | ||||||
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, 16,063,228 shares issued and outstanding | 160 | 160 | ||||||
Additional paid-in-capital | 89,127 | 88,829 | ||||||
Accumulated deficit | (81,883 | ) | (74,895 | ) | ||||
Total stockholders' equity | 7,404 | 14,094 | ||||||
Non-controlling interests | 12,126 | 23,085 | ||||||
TOTAL EQUITY | 19,530 | 37,179 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 1,225,819 | $ | 1,229,631 | ||||
Clipper Realty Inc. | ||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
REVENUES | ||||||||||||||||
Residential rental income | $ | 25,040 | $ | 22,597 | $ | 48,980 | $ | 44,059 | ||||||||
Commercial rental income | 9,503 | 9,290 | 19,230 | 19,878 | ||||||||||||
TOTAL REVENUES | 34,543 | 31,887 | 68,210 | 63,937 | ||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Property operating expenses | 6,782 | 6,928 | 14,881 | 14,467 | ||||||||||||
Real estate taxes and insurance | 8,700 | 7,886 | 17,236 | 15,817 | ||||||||||||
General and administrative | 3,396 | 3,197 | 6,689 | 6,139 | ||||||||||||
Transaction pursuit costs | 357 | 92 | 357 | 516 | ||||||||||||
Depreciation and amortization | 7,269 | 6,732 | 14,094 | 13,437 | ||||||||||||
TOTAL OPERATING EXPENSES | 26,504 | 24,835 | 53,257 | 50,376 | ||||||||||||
INCOME FROM OPERATIONS | 8,039 | 7,052 | 14,953 | 13,561 | ||||||||||||
Interest expense, net | (11,334 | ) | (10,005 | ) | (21,469 | ) | (19,990 | ) | ||||||||
Loss on extinguishment of debt | - | - | (3,868 | ) | - | |||||||||||
Net loss | (3,295 | ) | (2,953 | ) | (10,384 | ) | (6,429 | ) | ||||||||
Net loss attributable to non-controlling interests | 2,046 | 1,834 | ||||||||||||||
