Clipper Realty's Q4 2024: Contradictions Surface in Collections, Revenue, and Lease Extensions

These are the key contradictions discussed in Clipper Realty's latest 2024Q4 earnings call, specifically including: Flatbush Collections Issue, Livingston Buildings Updates, Office Property Revenue and Cash Flows, and 141 Livingston Lease Extension:



Record Financial Performance:
- Clipper Realty reported record revenue of $38 million, NOI of $22.5 million, and AFFO of $8.1 million for the fourth quarter.
- Growth was driven by strong residential leasing, increased rents, and cost reduction measures.

Strong Rental Demand and Leasing Performance:
- Residential properties were 99% leased, with overall rents generally at all-time highs and increasing.
- New leases exceeded prior rents by over 7% across the entire portfolio, fueled by demand and constrained rental housing supply.

Increased Rents and Improved Rent Collections:
- Average rents at Flatbush Gardens rose to $30 per square foot, up from $26.69 in the previous year.
- Rent collections across the portfolio remained strong at 97%.

Favorable Debt Position and Interest Rate Environment:
- Operating debt is 91% fixed with an average rate of 3.87%, providing stability against interest rate volatility.
- The company believes higher interest rates promote tenant demand for rental products.

Development Projects and Property Improvements:
- Pacific House is fully stabilized and contributing to cash flow, with a 7% cap rate, and 953 Dean Street nears completion.
- Flatbush Gardens is improving with enhanced tenant support, maintenance upgrades, and tax abatements.