Clipper Realty Inc. — Second Quarter 2026 Earnings Summary

Financial Performance

• Total revenues were $38.6 million for the three months ended June 30, 2026, compared to $39.0 million in the second quarter of 2025.
• Residential revenues increased to $32.2 million in Q2 2026 from $29.1 million in Q2 2025, driven by strong leasing.
• Commercial revenues decreased to $6.4 million in Q2 2026 from $10.0 million in Q2 2025, primarily due to the termination of the NYC lease at 250 Livingston Street.
• Income from operations was $9.3 million for Q2 2026, down from $10.8 million in Q2 2025.
• Net operating income (NOI) was $21.6 million for Q2 2026, compared to $22.8 million in Q2 2025.
• Net loss widened to $6.3 million ($0.19 per share) in Q2 2026 from a net loss of $1.4 million ($0.07 per share) in Q2 2025.
• Adjusted funds from operations (AFFO) decreased to $3.8 million ($0.09 per share) in Q2 2026 from $8.3 million ($0.20 per share) in Q2 2025.
• Notes payable (excluding unamortized loan costs) were $1,287.2 million as of June 30, 2026, compared to $1,286.2 million as of December 31, 2025.
• Cash and cash equivalents increased to $37.7 million at June 30, 2026, from $30.8 million at December 31, 2025.
• Restricted cash was $24.9 million at June 30, 2026, compared to $27.3 million at December 31, 2025.
• Net cash provided by operating activities was $17.999 million for the six months ended June 30, 2026, compared to $15.044 million in the same period of 2025.

Business Segments and Product Lines

• New free market leases at residential properties exceeded previous rents by 13%, and renewals exceeded previous rents by over 5%.
• The new Prospect House property at 953 Dean Street in Brooklyn was fully leased as of June 30, 2026.
• The 10 West 65th Street property was sold in the second quarter of 2025 and had no significant impact on Q2 2026 results.
• At 250 Livingston Street, the principal tenant (NYC) terminated its lease in August 2025; the property's principal revenue source is now 36 residential units.
• The Prospect House property, placed in service in August 2025, reported a net loss of $1.4 million and an AFFO loss of $0.2 million in Q2 2026 due to its lease-up period.
• All other residential properties and the 141 Livingston Street property showed increased net income of $1.5 million due to strong leasing and new commercial leases at Tribeca House.

Risks and Challenges

• The termination of the NYC lease at 250 Livingston Street resulted in a $5.7 million non-cash impact on net loss and a $5.8 million non-cash impact on AFFO in Q2 2026.
• In November 2025, the Company notified the lender of 250 Livingston Street that it would not support ongoing operating and debt service shortfalls, ceasing payments for interest and property tax escrows.
• Effective June 2026, the Company and the lender entered a Consent and Cooperation Agreement to jointly market and sell the loan, giving the lender the right to foreclose or take the deed in lieu of foreclosure at the end of the marketing period.
• Annual increases in real estate taxes and insurance at all properties, along with increased legal expenses and settlement costs, partially offset gains from strong residential leasing.
• The Company faces risks related to the resolution of lender issues at 250 Livingston Street, including the potential for foreclosure or deed transfer.

Management Commentary and Tone

• David Bistricer, Co-Chairman and CEO, highlighted continued strong residential leasing and significant progress in resolving lender issues at 250 Livingston Street.
• Management noted that major residential properties are leased at record levels with high occupancy and strong renter demand.
• The tone reflects confidence in residential performance while acknowledging the ongoing resolution process for the distressed office property.

Other Key Points

• The Company declared a second quarter dividend of $0.095 per share, consistent with the previous quarter.
• The dividend is payable on August 26, 2026, to shareholders of record on August 18, 2026.
• A conference call to discuss results was scheduled for August 6, 2026, at 5:00 PM Eastern Time.
• Litigation settlement and other income of $209,000 was recorded in Q2 2026, compared to $26,000 in Q2 2025.
• Transaction pursuit costs were $0 in Q2 2026, compared to a benefit of $10,000 in Q2 2025.
• The Company reported a net loss attributable to non-controlling interests of $3.882 million for Q2 2026.
• Total stockholders' equity was a deficit of $40.1 million as of June 30, 2026, compared to a deficit of $30.7 million as of December 31, 2025.