CLPR - Earnings call transcript Q3 2019

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Clipper Realty 3Q '19 Earnings Conference Call. At this time all participants have been placed on a listen-only mode and we will open the floor for your questions and comments after the presentation.

It is now my pleasure to turn the floor over to your host, Michael Frenz. Sir, the floor is yours.

Michael Frenz

Good afternoon and thank you for joining us for the third quarter 2019 Clipper Realty Inc. call. conference earnings on the me are Bistricer, David Participating and today's Chief of Board J.J. Executive Co-Chairman with call Officer; and Operating Officer. Chief Bistricer,

XX-K, are Report These may including website. the differ is Please the www.sec.gov from and those which deemed statements uncertainties, that such materially on subject statements not forward-looking company's and to by that risks statements. forward-looking results be in be are at historical XXXX those company's actual made and Form disclosed indicated Annual may statements aware accessible call the during numerous

As the duty a reminder, the to XXXX, forward-looking November no statements speak them. only date as this and of update undertakes of the company XX, call,

AFFO; supplemental to non-GAAP our directly of taxes, Form for may posted this see interest, including today adjusted adjusted press Please depreciation measures NOI. management the and information During financial amortization release, on or and report measures. financial and or XX-Q GAAP financial earnings non-GAAP with reconciliation quarterly certain income, call, a net operating financial or before adjusted refer these comparable measures, most EBITDA; operations, funds from

With now that, call the to Co-Chairman I and Bistricer. David turn our CEO, over will

David Bistricer

activity, afternoon. over for to Michael. business, J.J., who to call Welcome leasing third you, discuss earnings highlights and the including and level call performance recent including Good Thank an update XXXX then will Clipper the turn quarter pleased I'm renovation our Realty. to provide on milestones. projects. property I will

financial our Michael Finally, will about performance. quarterly speak

We will questions. your then take

strong entire for very to quarter. the like congratulate team would I a

recent industry and accomplishment a XX% some announcing headwinds, leased. considering record is are We today, achievement meaningful revenues our portfolio significant

recent developments. Turning to some more

currently Clover is stabilized pleased House that our XX% We are extremely property lease.

amenities, building driven New to this in location, XXX brought of its all neighborhoods residential the we online one York its property, fully exceptional residential proximity Manhattan, City, amenitized reminder, August. has the of desirable Attractiveness a most of in demand. pre-market unit As has

for the company very our pleased milestone a is and to are have operational. fully property significant This we

House announcing with mortgage are We with term. Clover year XX million interest loan refinanced entire rate annum best first Investment interest per $XX fixed an the for MetLife only Management with have today that of X.XX% and we secured

loans our approximately $XXX,XXX blended cash of cash May existing was will position. debt entire million rates. increase current company's And of $XX.X rate. is one a bore fixed balance the totaling The $XX save LIBOR million Net of repaid based that expense the interest The due and annual at remaining property XXXX. now refinancing We month plus X.XX%. in proceeds interest on outstanding X.X%

excited also mile of Heights, XXXX property We're of a to hub. Property We is Atlantic located Prospect feet Terminal/Barclays rentable one parking, announce rental amenitized story fully including building Brooklyn nine the redevelop multifamily Pacific million. the $XX indoor from as Center in acquisition square plan with to in XXX,XXX Street the with about space. approximately

million of the $XX rate. XX will stabilize residential of cost. free have tax XX% a approximately to abatement take component. the in Should to year two cost land expect be XX% will to estimated duration X.X% cap total complete due property XXX(a) which of We The affordable. to and units, qualify building affordable market for XXX is and project The to develop construct inclusive and years carrying

our We our add is company, project proceed provide to attractive into are The we an will updates redevelopment pleased further project. this portfolio. very in as that for opportunity

provide portfolio. to like an office the I'd update on

XXXX. the city that to of XXX which the XXX year St NOI. lease of property, discuss At on annual new Livingston initially end As it will neighboring Livingston York to with lease is expected August XX at a our New lease we commencing had calls, Street, of of the through earnings add property’s recent the to million $X confirmed City expiration continue has approximately the XXXX

Further annual incremental XXXX, property's add two of representing increase million portfolio Together which turning the of our additional add upcoming of these will to $X.X increase lease, XX% million to $X.X end to are will NOI. an expected the portfolio, NOI run revenue at in office a XX% the our lease roles rate.

of decade York We working years New relationship forward are look with City proud that the ahead. to partnership our building on multi and in

land another nine the progressing At Approval on property, our city. will months. filed the approved add with We Gardens review lasting procedure Flatbush currently we use -- six are to the ULURP ratio however or There complex, anticipate allowing significant development. uniform us expanding meaningfully the size and approved no adding value will area fully the or floor to application as additional partially assurance that is significant begin submitted. to the of be property process

on an update I provide to would House Tribeca XXXg litigation. like

disclosed, special Appeals the and granted in Court luxury interim previously the regarding order the overcharge. apartments stay ruled benefits subject New York October of June calculation an to As XXXg Division receiving tax Appellate XX, reference Division. are of deregulation, Appellate On of the unanimous in overturn buildings that to hearing incremental issuing previous not

On court on October Court, on United business. for our writ have seeking XX, hear Supreme with of the certiorari appeal believe the our order permission will grounds a from We material constitutional petition not Appeals we Court filed to a of do the States a impact order. have the

results. like I’d on our comment quarter third to Lastly,

NOI million. of to $X.X million, of strong of strong $XX.X We are [indiscernible] million report proud $XX.X record revenues

All management. performance reflect robust which financial detail of Michael further shortly. performance and leasing will continued expense provide and

on JJ operations. provide I to was on call the the update out an of

J.J. Bistricer

you. Thank

following operational, lease of ongoing perform is to efficiently reaching significantly appeal prior targeted property flow testament focused their and property operationally, is hit stabilization continue to and of This Club House We The leased, leasing is our neighborhood. the well timing currently month milestone. to period. cash investment. projected three outperformance management expense through driving a and a efforts sync ahead fully of over renovated year-end fully XX% team's the our inherent capital

full remains young well. perform averaging that including to amenities The destination are property several and occupancy surrounding quarters. have to professionals is go gym last square rents House upgraded Tribeca a we the Manhattan, the per compared neighborhood. a Equinox its to seen attractive downtown an foot. who for point trend continuing to want very more leased continues with live In-place over for Tribeca approximately price XX% families exceptionally high $XX and in House

We have achieved square $XX per relative the $XX blended a full record quarter, foot comparable end square foot upside neighborhood’s the and third rents. essentially to per at to potential maintaining while the continue of occupancy significant

that as program we last effective to the to proud capital targeted catalyst continue years, which been gap. are up over several an We standards rent close has property the brought our market the

from months in turnover currently to downtime maintain continues success helped XXXX in exceptional us additional three and weeks less provide than rent apartment Our three to in discussions. leverage has reducing occupancy

primarily and are the XXX-g rent for free by litigation all pertains timeframe a to move-ins certain that units property. charges the Lastly, Most prior of future forward, previous subset current the specific market. at I note not tenants tenants are and litigation going existing those impacted as

to rent last occupancy with Turning continues leased. to a multiyear been sustainable incredibly an option is upgrade efforts to several to from continue the that demand wide Brooklyn, has Gardens trend Continuing and attractive the as property methodical the of Gardens complex company’s and accompanying positioned housing residents. a community spectrum Flatbush high satisfying quarters benefit growth. extremely It full of now in the Flatbush over XX% feel has the

last quarter, the renewals. turns property, of mentioned the by law unit increases limiting growth on at overall future rate on rent increases tempered stabilization As preferential rent curtailing primarily rent the recent legacy and unit

the points four once it again I law. to reiterate as key relates However,

revenue guidance Gardens. renewal legacy renewals impacted place in current legal increase the rents our growth is to applied high by these in help to repeal subject our the increases. the of board One, negatively vacancy, preferential decontrol the are to on four, lowest Two, preferential units were not growth the impacted. limit mitigate as Flatbush impact preferential the upon rent And slower not rate. vacancy to rent have income we ability still deregulation Three, only limitations a rent and up renewals already the does increases not really maximum to law, on

rent tenant decontrolling deregulating profile, our levels of and our history the at prior neighborhood Given property. or not

rent very incremental Overall, a at while growth expansion will our and FAR portfolio future and Flatbush tempers is our Gardens the value of law growth opportunity. and project part remain the with trajectory property, significant story, recent the

will I results. the now financial turn call Michael who over our discuss will to

Michael Frenz

J.J. you, Thank

quarter results clearly highlighted efficiencies leasing reflect third the trends Our and operational J.J. exceptional David and by

attributable we period in $X.X to third to over For to $X.X achieved the revenues quarter, total per AFFO NOI We achieved X.X% million, increase primarily and XXXX of year XXXX. the year same and compared was Gardens as improvements we a million same an year million revenue share. $XX.X period $XX.X $X.XX was X.X% Flatbush in million, end grew more in of quarter or increase of at and or increase leased. X.X% and the House. XX.X% The record compared on of residential the Flatbush the rental Flatbush occupancy. both respectively, $XXX,XXX the increases of quarter. revenues was online generated reflecting revenue XX% Clover the House in during Tribeca year leased bought rates approximately Tribeca than property Tribeca in and X% of

operating year over follows. Property as were year key changes side, expense the On

by House Tribeca the $XXX,XXX associated apartment a make-ready by quarter House in at and driven commissions increased amount primarily and Flatbush Clover up. year, larger expenses Gardens third the of over improvements year with lease

legal property tax by $XXX,XXX by and Cash increases House. third in quarter, house online year, the the portfolio the in increase to taxes administrative to third the at prior quarter, estate bringing across expenses in and industry litigation Real general general due Tribeca increased expenses increased and XXXg an primarily related to and clover insurance cost increases. insurance the due $XXX,XXX primarily over

by quarter, a $XXX,XXX in third as result of expenses increased primarily higher the Interest

Street the from recent refinancings, to Livingston loan non-cash costs interest amortization. including XXX cost

expense clover expect reduce rates. based As we annual interest house a on $XXX,XXX new by to refinancing current mentioned,

unit the CapEx, House majority CapEx $XX the was capital Other included to related in House. renovation. Tribeca quarter, third incurred which were of to of million upgrades Turning at projects Clover we the

we of today third share $X.XXX December a paid of per The will record November on shareholders the X announcing be on Lastly, XX. dividend are for quarter. dividend to

call now for me over back to remarks. the concluding David turn Let

David Bistricer

Michael. you, Thank

We pleased are with our very results.

continues well. portfolio Our perform to very

our acquisition are shareholders. We're office value initiatives well XXXX Pacific positioned continue for our growth execute Clover strategic future on upcoming with excited very drive about We and and House, rolls lease Street redevelopment. the to our to and

for would up line With to the that I like questions. open

Thank you, the questions open The lines time. now have We and this for ladies at is Instructions] questions. gentlemen. [Operator no from floor

David Bistricer

Thank Thank for joining you today. you. us

Operator

gentlemen. and conference ladies you, Thank does call. conclude This today's

you your this disconnect Thank your time for may a have You participation. day. wonderful phone and lines at

Clipper Realty (CLPR) 13 Nov 192019 Q3 Earnings call transcript