Clipper Realty Inc. Announces Second Quarter 2018 Results

August 8, 2018

NEW YORK--(BUSINESS WIRE)--Aug 8, 2018--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, 2018.

Highlights for the Three Months Ended June 30, 2018

Achieved quarterly revenues of $27.3 million for the second quarter 2018, representing an increase of 7.7% compared to the same period in 2017 Achieved record quarterly income from operations of $8.3 million and record quarterly net operating income (“NOI”) 1 of $15.3 million for the second quarter 2018, representing increases of 13.6% and 8.8%, respectively, compared to the same period in 2017 Achieved record quarterly net income of $0.3 million for the second quarter 2018, compared to a loss of $1.6 million for the same period in 2017 Achieved record quarterly adjusted funds from operations (“AFFO”) 1 of $5.4 million for the second quarter 2018, representing an increase of 32.9% compared to the same period in 2017 Declared a dividend of $0.095 per share for the second quarter 2018

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

“We are extremely pleased with our second quarter 2018 results, which demonstrate solid revenue growth reflecting the quality of our property portfolio and the operational excellence of our team. With strong management and prudent capital improvements, we believe our properties will contribute meaningfully to our cash flow growth over time. As we progress through 2018 and beyond, we remain focused on executing our strategic initiatives, which include driving cash flow, increasing scale, enhancing efficiencies through asset repositioning and expertly operating our high-quality portfolio, to create long-term value for our shareholders. We are excited to continue to grow our portfolio through the development of the 107 Columbia Heights and 10 West 65 th Street properties, which we acquired last year. In addition, we are in active discussions with the City of New York regarding renewal of its commercial leases at the 250 Livingston Street property, which terminate in August 2020, in the low-to-mid $40 rent per square foot range, which is similar to the terms currently in place for the approximate 30% of the commercial space in the building that was leased on January 1, 2017, and for the 141 Livingston Street property.”

Financial Results

Revenues grew by $1.9 million, or 7.7%, to $27.3 million for the second quarter 2018, compared to $25.4 million for the second quarter 2017. The growth was primarily attributable to improvements in occupancy and rental rates at the Flatbush Gardens and Tribeca House properties, and the acquisition of the 10 West 65 th Street property.

Net income for the second quarter 2018 was $0.3 million, or $0.00 per share, compared to a net loss of $1.6 million, or $0.04 per share, for the second quarter 2017. AFFO for the second quarter 2018 was $5.4 million, or $0.12 per share, compared to $4.1 million, or $0.09 per share, for the second quarter 2017. Exclusive of the effects of the 10 West 65 th Street acquisition, the increases in net income and AFFO reflect the increase in revenues discussed above, lower interest expense as a result of the refinancings discussed below, flat property operating expenses, higher real estate taxes, flat general and administrative costs and higher depreciation and amortization expense.

Balance Sheet

At June 30, 2018, notes payable (excluding unamortized loan costs) was $883.7 million, compared to $855.1 million at December 31, 2017. The balance increased primarily as a result of the refinancing of existing debt on the Flatbush Gardens and Tribeca House properties in February 2018.

Capital Expenditures

The Company continues to strategically develop its properties, selectively repositioning assets and driving ongoing rent growth. In the second quarter of 2018, the Company incurred $9.9 million of capital expenditures, compared to $6.0 million in the same period in 2017. These capital expenditures were largely related to renovation projects at 107 Columbia Heights to develop the property; since acquisition, the Company has funded $3.7 million of these expenditures under a $14.7 million construction loan. Other capital expenditures occurred at the Tribeca House and Flatbush Gardens properties, principally to upgrade units and complete projects previously undertaken. These include the lobbies at Tribeca House and, at Flatbush Gardens, the terrace, security cameras, lighting, mailbox and laundry room installations, and basement area refurbishment.


The Company today declared its second quarter dividend of $0.095 per share to shareholders of record on August 20, 2018, payable August 27, 2018.

Conference Call and Supplemental Material

The Company will host a conference call on August 9, 2018, at 10:00 AM Eastern Time to discuss the second quarter results. The conference call can be accessed by dialing 800-346-7359 or 973-528-0008, conference entry code 707103. A replay of the call will be available from August 9, 2018, following the call, through August 23, 2018, by dialing 800-332-6854 or 973-528-0005, replay conference ID 707103. Supplemental data to this 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 (“SEC”) will be filed at www.sec.gov under Clipper Realty Inc.

About Clipper Realty

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 the timing of certain acquisitions, the amount of 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, 2017, as amended, and other reports filed from time to time with the SEC.

____________________________ 1 Net operating income (“NOI”) and adjusted funds from operations (“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

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