Clipper Realty (NYSE:CLPR) reported lower first-quarter 2026 revenue, net operating income and adjusted funds from operations, as strength in its residential portfolio was offset by the termination of New York City’s lease at its 250 Livingston Street office property and other portfolio changes.
On the company’s earnings call, Co-Chairman and Chief Executive Officer David Bistricer said Clipper’s residential properties “continue to perform very well” amid high rental demand, with overall rents generally at record levels and occupancy near full levels. Chief Operating Officer JJ Bistricer said the company’s stabilized residential properties were 99% leased overall, with new free-market rental rates in the quarter exceeding previous rents by 7% and renewal rents up 5%.
Residential Portfolio Remains Nearly Fully Leased
Management highlighted strong leasing metrics across several properties. Tribeca House had 99% leased occupancy, overall rent of $90 per square foot and new rents of $92 per square foot, according to JJ Bistricer. Clover House also had 99% occupancy, with average overall rents of $90 per square foot and new leases at $95 per square foot.
Pacific House, which includes a mix of free-market and rent-stabilized tenants, had 98% leased occupancy and free-market rents of $66 per square foot on new leases. Aspen continued to operate at record levels, with average occupancy above 98% and new rents 8% higher than prior leases, JJ Bistricer said.
The company also said rent collections remained strong. JJ Bistricer said the overall collection rate for all free-market residential properties was approximately 100% in the first quarter.
Prospect House Nears Completion of Lease-Up
Clipper Realty said it is in the third quarter of the initial lease-up at Prospect House, the company’s development at 953 Dean Street in Brooklyn. David Bistricer said the property was brought online in August “on time and on budget,” and that the company placed a bridge loan last quarter to provide funding through stabilization.
David Bistricer described Prospect House as a nine-story, fully amenitized residential building with 160,000 residential rentable square feet, 240 units, 31 parking spaces and 19,000 commercial rentable square feet. He said 70% of the units are free market and 30% are affordable.
Management said the property is nearly fully leased, with free-market rents at about $78 per square foot.
250 Livingston Street Weighs on Results
Chief Financial Officer Lawrence Kreider Jr. said the quarter’s year-over-year results reflected several notable items, including the termination of New York City’s lease at the 250 Livingston Street office property on Aug. 23, 2025; the initial lease-up at Prospect House; the absence of results from 10 West 65th Street, which was sold in May 2025; and settlement costs related to litigation regarding historical payroll practices at the company’s properties.
David Bistricer said that after New York City vacated 250 Livingston Street in mid-August 2025, the company notified the lender that it did not intend to support the property’s ongoing operations and debt service, and had stopped making payments of interest and real estate taxes. He said Clipper began receiving reimbursement of expenses paid by the company from the lender in May 2026.
The company is also discussing a consent and cooperation agreement with the lender to sell the property loan, David Bistricer said, though he cautioned that there is no assurance an agreement will be finalized.
During the question-and-answer portion of the call, analyst Buck Horne of Raymond James asked about interest and default fees related to 250 Livingston Street. Kreider said the company is not currently paying interest, including default fees, while it negotiates with the lender. “Right now, there has been no cash paid out on that,” Kreider said.
Revenue, NOI and AFFO Decline
For the quarter, Clipper Realty reported revenue of $38.1 million, down from $39.4 million a year earlier. NOI was $20.1 million, compared with $21.7 million in the prior-year period. AFFO declined to $2.3 million from $8 million.
Kreider said residential property revenue increased by $2.7 million, or 9%, due to strong residential leasing. That included a $2 million increase from ongoing stabilized residential properties and a $1.7 million increase from Prospect House, partially offset by a $1.1 million decrease from the absence of 10 West 65th Street.
Office property revenue fell by $4 million, driven by a $4.2 million decrease from the New York City lease termination at 250 Livingston Street, partially offset by a $200,000 increase from new retail leases at Tribeca House and Aspen.
Kreider said the $1.6 million decline in NOI included a $1.8 million increase from ongoing stabilized properties and a $1.3 million contribution from Prospect House, offset by a $600,000 decrease from the absence of 10 West 65th Street and a $5.8 million decrease from 250 Livingston Street.
The AFFO decline reflected, among other items, a $1.2 million increase from ongoing residential properties, a $1.2 million decrease from Prospect House as it continues lease-up with full expenses, and a $5.8 million decrease tied to 250 Livingston Street, Kreider said.
Balance Sheet and Dividend
Clipper Realty ended the quarter with $26.1 million of unrestricted cash and $28.6 million of restricted cash. Kreider said 89% of the company’s operating debt was fixed at an average rate of 3.87%, with an average duration of 3.4 years.
He said the company’s debt instruments are non-recourse, subject to limited standard carve-outs, and are not cross-collateralized. “We finance our portfolio on an asset by asset basis,” Kreider said.
The company announced a first-quarter dividend of $0.095 per share, unchanged from the prior quarter. The dividend is payable June 4, 2026, to shareholders of record as of May 26, 2026.
In response to a question about Flatbush Gardens, David Bistricer said the property is “performing as planned” and that the company would consider refinancing possibilities ahead of the property’s 2027 interest rate reset. Kreider added that investors could review the company’s supplemental materials for the property’s net operating income.
David Bistricer said the company remains focused on operating the portfolio efficiently, stabilizing Prospect House and resolving the capitalization of 250 Livingston Street.
About Clipper Realty (NYSE:CLPR)
Clipper Realty Inc is a publicly traded real estate investment trust that acquires, owns and manages multifamily residential and mixed‐use properties in the Greater New York metropolitan area. Since its initial public offering in early 2017, the company has focused on strategically sourcing apartment buildings and retail space in Manhattan and Brooklyn, with an emphasis on value‐add opportunities that can benefit from in‐house leasing, renovation and operational efficiencies.
The company’s primary activities include property acquisition, selective repositioning and asset management.
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