Clipper Realty's Q3 2025: Contradictions Emerge on Revenue Growth, Lease Negotiations, and Occupancy Rates

Date of Call: November 13, 2025

Financials Results

• Revenue: $37.7M, flat versus $37.6M in the prior year

Guidance:

• Full lease-up of Prospect House anticipated; currently ~60% leased with free-market rents > $88/sq ft.
• Continue negotiations to bring 141 and 250 Livingston back to cash-flowing positions.
• Expect continued strong residential demand and record-high rents; new leases +14% versus prior rents.
• Focus on optimizing occupancy, pricing and expense control to position for growth.
• Declared Q3 dividend of $0.095 per share, unchanged from prior quarter.

Business Commentary:

• Residential Rental Performance:
• Clipper Realty reported record residential leasing with overall occupancy at 99% and rents exceeding previous levels by over 14% across the entire portfolio.

• The strong performance is attributed to high residential rental demand and constrained housing supply in New York City.

  

• New Developments and Leasing:

• The initial lease-up of Prospect House at 953 Dean Street is 60% leased with free market rents in excess of $88 a foot.

• This ground-up development is experiencing strong demand, benefiting from Clipper Realty's strategic long-term investment in land acquisition and development.

• Financial Metrics and Trends:

• Clipper Realty achieved flat revenues of $37.7 million but reported a $1 million decrease in NOI and a $2.2 million decrease in AFFO compared to last year.

• The decline in NOI and AFFO was primarily due to the termination of the New York City lease at 250 Livingston Street and the absence of results from the 10 West 65th Street properties sold in May 2025.

• Office Property Strategy:

• Clipper Realty is actively engaged in negotiations to bring office properties at 250 and 141 back to a cash flow position.
• The company aims to optimize occupancy and pricing across the portfolio to position itself for growth, especially in the office sector.
  

  Sentiment Analysis:

  Overall Tone: Neutral

  • Management: 'rents are generally at all-time highs' and 'new leases exceeded prior rents by over 14%.' Reported flat revenues of $37.7M versus $37.6M, NOI $20.8M versus $21.8M, and AFFO $5.6M versus $7.8M — operational strength offset by declines in NOI/AFFO.

Contradiction Point 1

Revenue and Financial Performance Growth

It demonstrates differing perspectives on the growth trajectory of the company's financial performance, which is crucial for investor expectations and strategic planning.

The question is not applicable. - Not Applicable

20251114-2025 Q3: We remain focused on efficiently operating our portfolio. We look forward to full lease-up of Prospect House, finalization of the 141 and 250 Livingston negotiations and capitalizing on other possibilities that may present themselves. - David Bistricer(CEO)

No applicable question provided. - Not Applicable

2025Q2: Clipper Realty is reporting strong operating results, including near-record revenue and record residential rents, as well as record net operating income and AFFO in the second quarter. High residential rental demand and near-full leasing are key drivers. - Jacob Joseph Bistricer(COO)

Contradiction Point 2

Lease Negotiations for 141 Livingston

It involves the status and expected timeline of lease negotiations for the 141 Livingston building, which impacts the company's revenue and occupancy rates.

Not Applicable - Not Applicable

20251114-2025 Q3: We look forward to full lease-up of Prospect House, finalization of the 141 and 250 Livingston negotiations and capitalizing on other possibilities that may present themselves. - David Bistricer(CEO)

Can you provide details on the renewal of the 141 Livingston lease, including new lease rates and potential tenant improvements? - Buck Horne (Raymond James)

2025Q1: The current proposal does not require any TI (Tenant Improvements). We hope to finalize the lease in the next couple of weeks. - David Bistricer(CEO)

Contradiction Point 3

Residential Rental Demand and Leasing

It highlights differing views on the strength and consistency of the company's residential rental demand and leasing, which are critical for revenue stability and growth.

- Not Applicable

20251114-2025 Q3: In our multifamily portfolio, occupancy continues to be strong as we enter the winter months. - David Bistricer(CEO)

Not Applicable - Not Applicable

2025Q2: High residential rental demand and near-full leasing are key drivers. - Jacob Joseph Bistricer(COO)

Contradiction Point 4

Prospect House Lease-up Status

It involves the progress and timeline of the lease-up process for the Prospect House, which affects the company's occupancy rates and revenue.

No questions provided. - Not Applicable

20251114-2025 Q3: We look forward to full lease-up of Prospect House, finalization of the 141 and 250 Livingston negotiations and capitalizing on other possibilities that may present themselves. - David Bistricer(CEO)

Can you provide an update on performance at 250 Livingston, specifically at Prospect House, and any incremental deal terms or benefits there? - Andy Roszkowski (Robert W. Baird & Co.)

2025Q1: Prospect House is now approximately 54% leased. Effective rents at the property have increased approximately 18% compared to the rents at the lease expiry of the prior tenant. - David Bistricer(CEO)

Contradiction Point 5

Rental Leasing and Occupancy Levels

It involves reported rental leasing and occupancy levels, which are key indicators of the company's financial health and market demand for its properties.

Not Applicable - Not Applicable

20251114-2025 Q3: We remain focused on efficiently operating our portfolio. We look forward to full lease-up of Prospect House, finalization of the 141 and 250 Livingston negotiations and capitalizing on other possibilities that may present themselves. - David Bistricer(CEO)

（无内容） - Not Applicable

2024Q4: Our residential leasing at all our properties is very strong and continues to improve. At the end of the fourth quarter, our residential properties were 99% leased and rents were at record levels. We expect leasing to remain strong in the foreseeable future. Our residential properties performed at record levels with average lease occupancy above 98% and new rents and renewals 4% higher compared to previous leases. - Jacob Bistricer (COO)