CLPR

• Overall Portfolio Performance

  • Core stabilized residential properties continue to outperform, driven by sustained high rental demand in New York City, with overall portfolio occupancy near 100% and rents at all-time record highs
  • New free market leases company-wide were 13% higher than prior comparable rents in Q2 2026, with renewals 6% higher
  • Overall residential rent collection rate hit 96% in Q2 2026, indicating stable cash flow

• Development Milestones

  • Prospect House (Brooklyn ground-up development) was completed on time and on budget, and reached full lease-up in its final lease-up quarter as of Q2 2026. The property includes 240 residential units (70% free market, 30% affordable) and 19,000 sq ft of commercial space.

• Balance Sheet & Capital Structure

  • As of Q2 2026 end, the company held $37.7 million in unrestricted cash and $24.9 million in restricted cash, supported by strong cash flow from core residential and 141 Livingston operations
  • 88% of operating debt is fixed-rate, with an average interest rate of 3.87% and average debt duration of 3.2 years
  • All debt is non-recourse (with limited standard carve-outs), non-cross-collateralized, and financed on an asset-by-asset basis
  • The company maintained its quarterly dividend at $9.5 per share, payable August 26, 2026

• Troubled Asset Resolution (250 Livingston Street)

  • After the New York City tenant vacated in August 2025, the company entered a consent and cooperation agreement with the property's lender to market and sell the property's loan, with the lender funding all ongoing expenses and marketing the asset for auction. The company is in receivership for the asset but retains the right to bid in the auction.

• Operational Initiatives

  • Completed all three-year required capital improvements at Flatbush Gardens per the Article 11 agreement with New York City
  • Remains focused on portfolio upgrades, optimizing occupancy, rental pricing, and operating expenses across all assets

• Management did not provide explicit quantitative full-year guidance, but reaffirmed expectation that demand for the company's residential rental product will remain strong, supported by constrained new housing supply and limited new development activity in New York City
• Management expects the five-year lease renewal for 141 Livingston Street (the occupied Brooklyn Courthouse property) to be finalized by its 2027 effective date, but notes there is no guarantee of completion
• Management expects to achieve full stabilization of the recently completed, fully leased Prospect House development and continue pursuing new growth opportunities as they arise

Clipper Realty reports performance across residential (majority free market, some rent-stabilized and affordable) and commercial segments: 1. Stabilized Residential Segment: Overall portfolio occupancy of 99%, with 13% higher rental rates on new free market leases and 6% higher rates on renewals versus prior periods in Q2 2026. Key property-level results: Tribeca House (99% occupancy, $92/sq ft overall rent, $97/sq ft new rent), Clover House (98% occupancy, $92/sq ft overall rent, $95/sq ft new rent), Pacific House (99% occupancy, $78/sq ft new free market rent), Aspen (>98% occupancy, 11% higher new rents than prior leases), Flatbush Gardens (capital improvement obligations completed, ongoing management). This segment generated $2.1 million in revenue growth from higher rents and occupancy in Q2 2026, and contributed to $1.5 million higher net income for core non-development properties. 2. New Development Residential Segment (Prospect House): A 240-unit ground-up development placed in service in August 2025, fully leased as of Q2 2026 with free market rents at $78/sq ft. It generated $2.3 million in Q2 2026 revenue, with a $1.4 million net loss and -$0.2 million AFFO in the final lease-up period. 3. Commercial Segment: Core stabilized commercial: 141 Livingston Street is fully occupied by the New York City Brooklyn Courthouse, with a pending five-year lease renewal expected to take effect in 2027, contributing consistent revenue. Tribeca House added one new 2,063 sq ft commercial lease in Q2 2026, following a large long-term renewal in Q4 2025. 250 Livingston Street (the troubled commercial property) lost its primary New York City tenant in August 2025, contributing no material commercial revenue in Q2 2026. 4. Total Company Q2 2026 Results: Total revenue was $38.6 million (down $0.4 million, or 1.03% from Q2 2025), net loss of $6.3 million (up $4.9 million in loss from Q2 2025), AFFO of $3.8 million (down $4.6 million from Q2 2025). Core stabilized properties (excluding 250 Livingston and the sold 10 West 65th Street) saw overall net income growth of $1.5 million and AFFO growth of $1.4 million.

• There is no assurance that the pending five-year lease renewal for 141 Livingston Street will be finalized as expected for a 2027 effective date
• The outcome of the lender's auction for the 250 Livingston Street property/loan is uncertain, and the company will not cover recorded expenses for the asset if the final sale price does not cover obligations, leading to the continued elevated net loss booked in Q2 2026
• All core properties face annual increases in real estate taxes and insurance costs, which partially offset net income gains from higher rental revenue
• Forward-looking statements are inherently uncertain, and actual results may differ materially from management expectations
• Legal costs and settlement expenses added pressure on Q2 2026 profitability for core assets

No investor questions were submitted during the Q&A portion of the conference call, so the call concluded after prepared remarks.