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Clipper Realty Inc. (CLPR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered record revenue ($39.4M), NOI ($21.8M), and AFFO ($8.0M) on very strong residential leasing; the quarter included a $33.8M impairment tied to the pending sale of 10 West 65th Street, driving a GAAP net loss of $35.1M .
  • Revenue and EBITDA were below S&P Global consensus: Revenue $39.4M vs $40.4M estimate; EBITDA (SPGI basis) $17.9M vs $19.1M estimate; EPS consensus was unavailable; company reported net loss per share of $0.86 (and $0.03 loss excluding impairment) . Values retrieved from S&P Global*.
  • Management highlighted significant leasing spreads (new leases +15%, renewals +8%) and near-full occupancy (~99%) across properties; dividend was maintained at $0.095 per share .
  • Strategic catalysts: Dean Street leasing begins June 1 with $160M bridge financing providing up to $18M working capital; contract signed to sell 10 West 65th Street (~$12M expected proceeds), 141 Livingston renewal agreed for five years .

What Went Well and What Went Wrong

What Went Well

  • Leasing strength and pricing power: “record revenue and record residential rents… new leases exceeded prior rents by over 15% across the entire portfolio” (CEO) .
  • Portfolio nearly fully leased with high collections (~98% overall; >95% at Flatbush), with rent-per-foot leadership at Tribeca ($90 new; >$83 overall) and Clover ($94 new; $87 overall) (COO) .
  • AFFO growth: AFFO rose 36% YoY to $8.0M ($0.19/share) on strong leasing and lower repairs/maintenance (CFO) .

What Went Wrong

  • GAAP optics: $33.8M impairment on 10 West 65th Street pushed GAAP net loss to $35.1M for the quarter .
  • Operating cost pressures: Property operating expenses +$1.5M YoY, higher legal and utilities, and higher payroll at Flatbush Gardens (partially offset by lower third‑party R&M) .
  • Revenue/EBITDA slightly missed SPGI consensus; EPS consensus unavailable, limiting headline “beat” narratives. Values retrieved from S&P Global*.

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$35.760 $38.047 $39.398
Net Loss ($USD Millions)$(2.666) $(1.086) $(35.103)
Net Loss per Share ($USD)$(0.09) $(0.05) $(0.86)
NOI ($USD Millions)$20.170 $22.553 $21.802
Adjusted EBITDA ($USD Millions)$17.180 $19.497 $19.120
AFFO ($USD Millions)$5.899 $8.097 $8.020
AFFO per Share ($USD)$0.14 $0.19 $0.19
Dividend per Share ($USD)—$0.095 (declared for Q4; paid Apr 3) $0.095 (declared for Q1; payable Jun 11)

Estimates vs Actuals (S&P Global):

MetricQ1 2024 ConsensusQ1 2024 ActualQ4 2024 ConsensusQ4 2024 ActualQ1 2025 ConsensusQ1 2025 Actual
Revenue ($USD Millions)$36.008*$35.760 $38.700*$38.047 $40.400*$39.398
EBITDA ($USD Millions)$15.514*$17.180 $18.200*$19.497 $19.100*$19.120 (Adjusted EBITDA)

Values retrieved from S&P Global*. Note: SPGI “EBITDA” may differ from company “Adjusted EBITDA”; company reports Adjusted EBITDA.

Segment Revenue Breakdown:

Segment Revenue ($USD Millions)Q1 2024Q4 2024Q1 2025
Residential Rental Income$26.106 $28.173 $29.190
Commercial Rental Income$9.654 $9.874 $10.208

Key KPIs (Portfolio and Properties):

KPIQ4 2024Q1 2025
Portfolio Occupancy (%)99% 99%
New Lease Spread (%)+7% +15%
Renewal Spread (%)+4.9% +8%
Collections – Portfolio (%)97% nearly 98%
Collections – Flatbush Gardens (%)88–92% over 95%
Tribeca House – Overall Rent/ft ($)>$82 >$83
Tribeca House – New Rent/ft ($)$90 $90
Clover House – Overall Rent/ft ($)$86 $87
Clover House – New Rent/ft ($)$94 $94
Pacific House – Occupancy (%)100% (stabilized) 98%
Flatbush Gardens – Avg Rent/ft ($)$30 (end of Q4) $30.80 (end of Q1)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per ShareQ1 2025$0.095 (Q4 maintained) $0.095; record May 27; payable Jun 11 Maintained
Dean Street – Leasing Start2025 SeasonOn‑time completion early 2025 to capture 2025 season Leasing to commence June 1, 2025 Clarified timing
Dean Street – Financing2025Construction loan draws ongoing $160M 2‑yr bridge, 265 bps over SOFR; up to $18M working capital New financing
141 Livingston Lease2025–2030Active discussions Agreed to terms of new 5‑year renewal; no TI expected Finalized terms
10 West 65th StreetQ2 2025Considering recycling portfolio assets Definitive contract to sell for $45.5M; ~ $12M expected net proceeds New disposal
250 Livingston (NYC tenant)Late Aug 2025NYC intends to vacate Continues; seeking solutions/opportunities Maintained

No formal numerical guidance for revenue, margins, or tax rate was provided.

Earnings Call Themes & Trends

TopicQ3 2024 (Prev Mentions)Q4 2024 (Prev Mentions)Q1 2025 (Current)Trend
Residential Leasing StrengthNew leases ~+10%; renewals ~+6%; high occupancy New +7%; renewals +4.9%; 99% occupancy New +15%; renewals +8%; ~99% occupancy Strengthening
Flatbush Gardens (Article 11, Sec. 610)Continuing improvements and recoveries Sec. 610 rents $1.1M in Q4; collections 88–92% Collections >95%; avg rent/ft $30.80 Improving collections
Development PipelineDean progressing ahead of schedule Dean nearing completion; Pacific House stabilized (100%) Dean construction complete; leasing June 1; Pacific 98% Execution on schedule
Balance Sheet & DebtFixed‑rate, long duration debt approach 91% fixed; 3.87% avg rate; 4.3 yrs duration 89% fixed; 3.87% avg; 4.1 yrs; asset‑level, non‑recourse Stable profile
NYC Government Tenancy250 Livingston potential vacate Aug 2025 141 Livingston renewal discussions 141 Livingston 5‑yr renewal agreed; 250 Livingston risk reiterated Mixed: renewal positive; vacancy risk persists
Capital RecyclingConsidering property sales incl. 10W 65th Continuing marketing certain properties Contract signed to sell 10W 65th (~$12M net) Advancing disposition

Management Commentary

  • “Record revenue and record residential rents… new leases exceeded prior rents by over 15% across the entire portfolio” .
  • “Residential leasing at all properties is very strong, and they are 99% occupied… renewals by 8%” .
  • “Operating debt is 89% fixed at an average rate of 3.87%, and average duration of 4.1 years… nonrecourse… not cross‑collateralized” .
  • “We have entered into a definitive contract to sell 10 West 65th Street in Manhattan for $45.5 million… approximately $12 million after payment of debt and costs” .

Q&A Highlights

  • Analyst focus on 141 Livingston renewal terms: Management indicated no tenant improvements are expected and aims to finalize in the next couple of weeks .

Estimates Context

  • Q1 2025 revenue missed S&P Global consensus ($39.4M vs $40.4M), and SPGI EBITDA was below consensus ($17.9M vs $19.1M); EPS consensus was unavailable. Company reported Adjusted EBITDA of $19.1M and GAAP net loss per share of $0.86 (and $0.03 loss excluding impairment) . Values retrieved from S&P Global*.
  • With stronger leasing spreads and continued occupancy strength, we expect sell‑side models to revisit rent growth, NOI, and AFFO assumptions, while GAAP EPS remains less indicative for a multifamily REIT.

Key Takeaways for Investors

  • Leasing momentum is the core driver: new leases +15% and renewals +8% with ~99% occupancy underpinning recurring revenue growth and AFFO resilience .
  • The $33.8M impairment is non‑cash and tied to a strategic sale; expect GAAP optics to normalize post‑transaction, with ~$12M net proceeds improving liquidity .
  • Dean Street lease‑up (starting June 1) and $160M bridge financing (lower rate, up to $18M working capital) are near‑term catalysts for cash flow and balance sheet flexibility .
  • Dividend continuity ($0.095) signals confidence in AFFO; monitor payout sustainability as lease‑up progresses and Flatbush recoveries improve .
  • Watch 250 Livingston vacancy risk (late Aug 2025) and mitigation updates; 141 Livingston 5‑year renewal is a positive offset .
  • Debt profile remains conservative: mostly fixed, long duration, non‑recourse, asset‑level financing; supportive in a higher‑rate backdrop .
  • Near‑term stock reaction likely hinges on Dean Street leasing throughput, sale closing of 10W 65th, and confirmation of the 141 Livingston renewal terms (no TI). Strong leasing updates could counter modest consensus misses, refocusing attention on NOI/AFFO trajectory .

Footnote: Values retrieved from S&P Global*.