Clipper Realty Inc. Q2 FY2025 earnings call

• Reported excellent operating results with near-record revenue, record residential rents, record NOI, and record AFFO in Q2 2025, driven by high residential rental demand. Overall rents are at all-time highs and still increasing, with nearly full occupancy. New leases in Q2 exceeded prior rents by over 14% across the portfolio. • Completed construction on the Prospect House development at 953 Dean Street in Brooklyn on time and on budget. Leasing started at the end of July, with approximately 33% leased and gross rents over $88 per square foot. Refinanced the construction loan at this property with a new loan up to $160 million, getting over $10 million excess proceeds at closing and expected $12 million excess proceeds for interest and operating expenses through stabilization. • Pacific House at 1010 Pacific Street in Brooklyn is stabilized and contributing to cash flow after a year of full operation. • Sold the 10 West 65th Street property for $45.5 million, generating approximately $13 million after payment of debt and cost. • At 141 Livingston Street, received a 5-year renewal from New York City, which is being processed. At 250 Livingston Street, New York City is vacating at the end of the month, and actively seeking solutions including discussions with the lender. • Residential leasing remains strong with all residential rents at record highs. Tribeca House had 100% occupancy, Clover House had 98% occupancy, Pacific House had 96% occupancy, other residential properties had over 99% occupancy, and Flatbush Gardens had an average rent of $31.27 per square foot, up 11% from last year. • Since the start of the Article 11 agreement in July 2023, spent nearly $14 million on capital improvement commitments and related projects. Rent collection rate in Q2 was approximately 97% across the portfolio, including 95% at Flatbush Gardens.

In the second quarter, Clipper Realty achieved near-record revenue of $39 million. Residential revenue increased to $29.1 million, an increase of $1.3 million. Commercial revenue was $9.9 million, an increase of $0.4 million compared to the previous year. NOI reached a record $22.1 million, a 5% increase from the previous year. AFFO was a record $8.3 million, a 17% increase from the previous year. Residential revenue contributed approximately 74.6% of the total revenue ($29.1 million / $39 million), and commercial revenue contributed approximately 25.4% ($9.9 million / $39 million).

• Focused on optimizing occupancy, pricing, and expenses across the business to position for growth. • Look forward to leasing the Prospect House development at 953 Dean Street, finalizing the lease at 141 Livingston Street, resolving the vacancy at 250 Livingston Street, and capitalizing on other opportunities as they arise.

• At 250 Livingston Street, New York City is vacating at the end of the month, and need to seek solutions including discussions with the lender. • Responsibility to work through the legal system to minimize arrears in rent collections. • Debt instruments are nonrecourse with limited standard carve-outs and not cross-collateralized, which may pose certain risks.

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