Clipper Realty (NYSE:CLPR) reported record third-quarter revenue as strong residential leasing and a full quarter of occupancy at its Prospect House development offset lower commercial revenue. The company’s net loss widened, however, as it continued to record expenses at a property whose principal tenant vacated last year.
Revenue rose to $40.5 million in the third quarter of 2026 from $37.7 million a year earlier, Chief Financial Officer Lawrence Kreider said during the Nov. 4 earnings call. The net loss increased to $5.9 million, or $0.18 per share, from $4.6 million, or $0.14 per share.
Adjusted funds from operations, or AFFO, fell to $4.1 million, or $0.10 per share, from $5.6 million, or $0.13 per share. Kreider attributed $4.1 million of the AFFO decline to the termination of New York City’s lease at 250 Livingston Street, partially offset by stronger leasing elsewhere.
Residential leasing supports revenue
Residential revenue increased by $4.2 million, or 14.1%, from a year earlier, helped by higher rents, occupancy and a full quarter of operations at Prospect House, the development at 953 Dean Street that entered service in August 2025.
Commercial revenue fell by $1.4 million. Kreider said the decline reflected $2.2 million of lost revenue following the termination of the city’s lease at 250 Livingston Street, partly offset by new leases at Tribeca House and higher real estate tax reimbursement at 141 Livingston Street.
Chief Operating Officer JJ Bistricer said stabilized residential properties were 99% leased overall. During the quarter, new rental rates at residential free-market properties exceeded previous rents by 9%, while renewal rents were 5% higher, he said.
At Tribeca House, leased occupancy was 99%, with overall rent of $94 per square foot and new rents of $105 per square foot. Clover House was 98% occupied, with average overall rent of $92 per square foot and new leases at $95 per square foot. Pacific House was 99% leased, with average overall free-market rents of $75 per square foot and new free-market leases at $84 per square foot.
Prospect House had its first full quarter of occupancy throughout the period and was fully leased, Chief Executive Officer David Bistricer said. Average free-market rents at the property were about $84 per square foot.
JJ Bistricer said residential rent collections were approximately 93% of billings across the portfolio in the third quarter. He also said the company had substantially completed the three-year capital spending requirements under its Article 11 agreement with New York City for Flatbush Gardens and would continue investing in the property.
250 Livingston weighs on results
New York City, the principal tenant at 250 Livingston Street, vacated the property in August 2025. Kreider said Clipper subsequently told the lender it would no longer support the property’s operations. The lender has funded expenses and placed rents in escrow, he said.
In June 2026, Clipper entered a consent and cooperation agreement to market and sell the loan on the property. The agreement allows the company to bid, but placed the property in receivership, Kreider said.
The company continues to accrue expenses and record the property’s relatively small residential revenue. Kreider said $4.1 million of the third-quarter net loss was attributable to the lease termination, substantially all of it noncash.
At 141 Livingston Street, the Brooklyn Courthouse continues to occupy the property while a previously agreed five-year lease is finalized. JJ Bistricer said the company expects the lease to take effect in 2027, although there is no assurance it will be completed.
Debt and dividend plans
Clipper ended the quarter with $30.6 million in unrestricted cash and $23.1 million in restricted cash. Kreider said 88% of operating debt was fixed at an average rate of 3.68%, with an average duration of three years. The debt is nonrecourse, subject to limited standard carve-outs, and is not cross-collateralized, he said.
Asked about the Flatbush Gardens mortgage, David Bistricer said strong rents and potential additional rental increases should support a refinancing with the current lender or another bank. He said he hoped the company would not need to contribute additional equity, but that it was too early to tell.
When asked whether a rate reset could require a dividend cut in 2027, David Bistricer also said it was too early to tell. He said banks involved in two portfolio refinancings that were not yet complete were discussing rates of about 5.5%, compared with roughly 3% currently being paid.
For Dean Street, Kreider said the company could extend the loan refinancing to 2028 without additional cost. David Bistricer said Clipper plans to put a standard mortgage on the property.
The company announced an unchanged quarterly dividend of $0.095 per share, payable Nov. 25 to shareholders of record on Nov. 17. Kreider said Clipper would issue a corrected press release after an earlier release listed Nov. 16 as the record date.
About Clipper Realty (NYSE:CLPR)
Clipper Realty Inc is a self-administered and self-managed real estate investment trust that owns, operates and develops multifamily residential properties in New York City. The company focuses primarily on apartment communities in Manhattan and Brooklyn, serving residents through rental housing and related property-management services.
Clipper Realty’s business includes acquiring well-located residential properties, managing day-to-day operations, maintaining buildings and apartments, and pursuing renovations or other improvements intended to enhance its properties.
