CLPR - Earnings call transcript Q2 2020

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Operator

Good afternoon, ladies and gentlemen, and welcome to Clipper Realty 2Q 2020 Earnings Call. At this time all participants have been placed on a listen-only mode. We'll 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, Chief Financial Officer. Sir, the floor is yours.

Michael Frenz

you Realty us Inc. thank Quarter the and Clipper XXXX afternoon for for joining Second Good Earnings Call. Conference Participating with and me Co-Chairman of on today's call Board Chief are and Executive Officer; J.J. the David Bistricer, Bistricer, Chief Operating Officer. historical materially that aware statements. and the are forward-looking made Please indicated may may by be deemed differ statements be results those call during that not from actual forward-looking statements, such the Form in to quarterly today, These and disclosed company's the quarterly risks on our all Form are subject on of for company's XX-K, at report Form those numerous first the statements XX-Q website. www.sec.gov report XX-Q on are including uncertainties, company's and XXXX quarter annual accessible which posted and report the XXXX

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

adjusted to this financial management and AFFO; earnings non-GAAP now CEO, before and the financial During interest, measures. operations, press for income, these release, see of With reconciliation measures, GAAP our with posted including I or and refer certain depreciation or may funds from or NOI. adjusted EBITDA; call, directly financial taxes, XX-Q David Please net operating measures to that, adjusted Bistricer. will supplemental a non-GAAP the over financial and today call most Form our information Co-Chairman comparable turn amortization,

David Bistricer

capital who welcome activity, second JJ, milestones, will with provide XXXX responding taken how the quarter to and over and turn the including projects will as to in earnings measures Clipper to recent Good on property is update pandemic. an pandemic. will line discuss I our afternoon our Realty. well level the and for then Thank I you, business Michael. company COVID-XX leasing performance, as highlights call call including

about our speak Finally, performance. financial quarterly will Michael

then take your will questions. We

our business residents, begin times. ongoing inspiring entire the during and time of and our to work team to me initiatives these this The for and the perseverance crisis. challenging during the grateful JJ the unprecedented through we efforts. to address colleagues taking have our the Clipper saying upheaval them are work continued our are been will dedication by help how Let we thank for hard we communities

remained throughout the pandemic. have and open properties Our operational

remained We steps continue to take residential at quarter state driven keep But our downtick the typical with to and quarter tenants our end, in the local during compliance a in residents. are through state desirable our and our remain still and saw broad Under stabilized to leased July. our our COVID-XX. York New audits circumstances, We range of necessary XX% normal services safe were and to a occupancy providing slight by at properties time. over to second business has and a difficult expect level operations more properties markets that over City has strong, - the return tenants to we

is a from positioned the to Our liquidity perspective balance sheet well through manage pandemic.

debt million is finance our excess is XXX XX We an in approximately collateralized. non-recourse of of of cross consisting and restricted unrestricted cash have We cash. basis, asset-by-asset on cash XX and outputs million of of million not and

on any properties no have of maturities we operating Importantly, XXXX. debt until our

or and trading repurchase us and be repurchase today of market number may repurchase any number $XX determined common block suspended, performance. we the purchase conditions alternative at particular of to in of obligate of anytime uses repurchase market The to availability does capital whereby million price shares. trades and stock, for manner may private repurchase We be are the up general to our modified of to We timing, of amount new the or transactions announcing shares a price repurchase stock. and The we program, of our reason, discretion, any open financial may will any and terminated of stock stock, subject our not program or shares otherwise.

with to developments, in Prospect acquisition Pacific XXXX mile of Heights, located hub. are Brooklyn, Atlantic Street proceeding the from redevelopment we Center the Turning Terminal/Barclays upcoming about one

Use significant NOI. estimate with expected process million There this with are our we incremental At to in Tribeca the flurry property will and however, XXXX, adding in XXX on meaningfully the no which City, litigation. $X.X the rate. project NOI the Gardens We discussed, an rent provide allowing take further previously anticipate add of to is at value updates the our size two million to property, will property's increase increase of Street NOI. insurance I $X.X would House like us portfolio at initially stabilized to will years on million rate. an Street approximately the an $X At and property application Flatbush will will approved XX the to that add update is and that cost expected begins representing the City complex XXX submitted. Together annual Review new XXX portfolio the total the develop or X.X% ratios add at our end In be to to expanding fully ULURP or month add JJ after as provide will we significant run Procedure the the net approximately Land million the XX% complete on portfolio to partially approval As to approval total shortly. of our project Livingston continue Livingston to on XX% cap begin a Uniform on City. progress property development. roles and lease office the property's these the

to comment that year XXXX a unanimous XXX-g case be pending the which like deregulation, appeal, tax apartments term. X York XXXX order of will are currently Appellate January do the on the on luxury benefits And not As this order referee's to in New the in special Division and Appeals have a previously to We business. that full quarter subject our to the expected a buildings stay not [indiscernible] Appellate believe ruled On October hearing overturn the of during issuing decision. the second Court results. receiving this granted Division of of disclosed, calculation overcharges lastly, material impact the potential regarding is rent I'd previous argued

shortly. will response call Michael million; during quarterly the reporting of JJ, further and will quarterly turn financial to the to details and XX.X the will an million, NOI of our to ability are who update AFFO on provide revenue and record on XX.X business strength testament performance million our We I operations of of X.X our the pandemic. pandemic. provide a over the now

JJ Bistricer

begin reiterating during gratitude deep our both by our challenging period. Thank employees residents to and you. to I would this like

have normalcy in colleagues assist pandemic. our continued possible of tenants much sense Our of and to communities as the throughout a as work to tirelessly maintaining

service We of protocols including maintain and our orders to and employees our mandated wear requiring social our who continue equipment buildings keep residents to practice and rigorously government protective to compliant all with enter safe employees compliance providers distancing. in personal

operational, remain regular services providing properties open permitted Our tenants. our to and

utilize continue as all We to levels. technology to appropriate conduct at operations

the Our pandemic. collections have strong been during

improved XX% rate prior COVID-XX During quarter our the collection of to was our rate XX%. the collection to of equal first our and second impact rent rate July to quarter, collections

the they second to us in a Further situations payment first revenue continue pandemic, business, they X.X% obligations reviewing demonstrating basis our We pandemic. only where the was cannot work arrangements. that alternative with quarter to case-by-case including notify tenants result of down versus resiliency their as prior meet on the potential quarter of the a

XX.X% in points second that Our from down of level end residential at the quarter XX.X% first at the July. the leased still XXX quarter, and properties were basis at end of the stabilized

focus management Our mitigated these the the on in basis approximate margin in quarter. pressures, resulting XX improvement in NOI versus first point quarter second expense an

level, filed the plans at are and expeditiously processes. we Street, XXXX property regulatory Pacific for complete new to the to building the associated working Turning

rental the develop previously fully we and to residential affordable. due and including eligible will XXX,XXX parking nine a be the component. units, approximately of feet As with for year abatement XX% multifamily XXX(a) rentable Significantly, expect tax market property XX disclosed, for square affordable total indoor which building is XXX storey free a to XX% amenitized

provide we further commencing closer to get will We the updates as construction.

property's leasing leased Pandemic, of portfolio before the complex to our and second end Gardens rent to price foot second COVID-XX. affected flat square exceptional that most luxury the fully to same foot average The House believe XX% The to at House XX.X% new and $XX was property. very level The the quarter rent square significant square moving from between quarter, surrounding Our a discussions. record. positioned new $XX.XX demand continues House the was the of occupancy square leased in the rented the end upside compared Tribeca strong. The rents in as compared the property per rate to XX.X% was Flatbush the provide in to at the for essentially quarter foot At return Tribeca foot pandemic. per the well for a has record occupancy per before is We the date high be Brooklyn, temporary leased offer per plus continuing neighborhood previous almost with property a to the forward rent square rents. and performance to benefit is at the Clover comparable remains experience of the will to continues being end as $XX its levels point continues the quarter, future first at foot $XX and leased of attractive current extremely property more a second been The property is is leverage the is decrease neighborhood. compared June. by the at

who our opportunity. results. our story Importantly, expense and now in a property margin second Gardens over first call basis you. discuss the with FAR project quarter significant Thank Flatbush value NOI the incremental part expansion management of turn remains to quarter. point the will XX I will versus our drove improvement focus the Michael very growth and at the during portfolio on a financial

Michael Frenz

Thank you, JJ.

XX% X%, West the For share. The XXXX period of year-over-year online the in XXXX. the We per $X.X quarter the compared completing XX primarily million revenues and XXXX. in of approximately $XX.X and record XXth the million period $X.XX to House was of an of of X.X% re-leasing million, second increase units the the XXXX AFFO same $X.X property property increase at or we of or quarter Clover second attributable compared during $XX.X third an to million, increase during of and Street to quarter total NOI achieved renovation of same achieved revenue bringing

and due year-over-year debt insurance $X.X for estate Real increases COVID-XX. quarter On $X.X due to expense litigation refinancing driven in property in and in and insurance expense May. recognition to cost in provision follows. general the general increase year-on-year. with administrative approximately in Cash, industry House by by taxes the expense operating tax second excluding quarter key quarter an increased costs, side, and the million, the year-on-year, the Clover were property interest the the second by changes million second increases. X.X expenses of flat bad portfolio the impact Property connection bringing the expenses increased by Interest Flatbush as non-recurring due of year-on-year, online the in in of primarily to were primarily the second related Gardens million increased across quarter

David As from a perspective. well we earlier, positioned mentioned are liquidity

cross is of we cash have portfolio We non-recourse XX, asset-by-asset cash. XX on approximately and $XXX an not of basis consisting restricted million cash, debt our June of unrestricted of XX and of an million million finance and of As collateralized. our excess

have no operating on until We properties maturities XXXX. debt any

per August are for paid as Lastly, shareholders a August XX. be we last same The the second XX, $X.XX quarter amount on dividend on to the will share dividend of record of today, announcing quarter.

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

David Bistricer

you, Michael. Thank

by of remained Our of our strong business team. pandemic and driven throughout has the the the the portfolio and durable efforts quality

current to the steps We balance a strong buttress by challenges to necessary the sheet. continue take navigate through

XXXX myriad New from forward to great expect on the I the potential resiliency would City hope demonstrated upcoming opportunities, open safe We City With look York for of time to and that up roles, has a growth of the ever. the and like capitalizing enthusiastically everyone we including the lease We and questions. healthy. Flatbush pandemic Street, redevelopment. to office emerge the Pacific over than line expansion Gardens stronger stay

Operator

questions. your question Horne Ladies Okay. Raymond the from open Instructions] coming Thank is Buck is for you. your line live. now Buck, floor and James. And gentlemen, first from is [Operator

Buck Horne

resilient Okay, results and thank quarter you. afternoon very Good for the tough on congratulations a in everyone.

you needed? quarter to in I'd planning level and quarter? that may this understand just bad start and What bad debt help be how of versus how any with accruals any policy, for rate was the I think delinquency delinquencies treating just future the debt us accrual like you're first your the Could accounting now. for current you're to

Michael Frenz

Sure. Buck. you Good to talk to

So it that current to is I with [indiscernible] just the at than in unmet the with think quarter, a short bit past, ability the looking long rents. this the more we've obviously story their perhaps benefits just people urgency been little to stay and given

I bad as before take tenant in provision matter we debt. I I focused property general at looked as the QX, look quarters as profile, think on think a that's over prior past, generally speaking, potential a in our And the we we the place previously. did where a we've reserve prepared mostly think Flatbush Gardens generally where

year. place this like all the roughly And a we Starting looking at was a uncertainty In through case-by-case of residential QX prudent, $XXX,XXX pandemic, Gardens to reserve. of take on basis, both it given different again, with debt increased analysis, each a $XXX,XXX that QX what's a of an reserve harder given in working through to properties the and bad tenants, current the took thought terms again, the at of look magnitude, retail. of we it for Flatbush going order quarter of was rough

at I quarter. decided $XXX,XXX a roughly makes most in debt this think take looking the reserves it conservatively, additional And sense. an relative bad to we

as of everything speed office still was Retail The bills that keep tenants and and tenants, in we're QX of properties. felt paying and kind you approach. for bad the in So basis roughly sort Again, was tenant-by-tenant negotiations up us, each City best situation looking daily think each on its expect, total, we - side. went make to debt a at is the the with XXX,XXX to was general different to individually, that we that tenant we [indiscernible] on we approach. the reserve sure

Buck Horne

helpful. very that's Okay,

I to residents you that are way if pressures of the and have any any being out of just don't Flatbush it As more way sensitive Flatbush's there. relates economic these determining just to whether federal property of a risks or measuring not about like not on the the or do benefits if - approved level the assistance get think Flatbush? how sensitivity is potential supplemental unemployment forthcoming or you insurance more know

Michael Frenz

Look, the I here. collections or it's good look little saying Flatbush trajectory board, start a of rent least think I'll that the off a across over by at at last bit question. the has

you we XXs collections we struck COVID high were a place all in in Buck, Before like were the very Gardens. as even know - Flatbush

basically I quarter seen we initial dip roughly uptick. think further a range collection other at of took then mid and were Gardens. of Flatbush in were low sort we seen into XXs at In on we June, of into the we've the as July, in June that to and a significant a the Into almost well. of actually bit second of also hit, as with July, basically XXX%. were REITs, kind as little I sort COVID think you've May April impact

last the unemployment before, as a this answer of other strong. connection in been of loss in with question But done putting of tenant-by-tenant collections don't we said, uncertainty months where have of at and we of for at debt we're we Flatbush have it's of encouragingly, slightly the have But just insurance, potential endpoint last as going we said reserve when lingering I as reserve specific pandemic, the it. I given of an the couple look So to in always out I while continue actually Flatbush an a the analysis we quite higher analysis figure supplemental properties, still look impact quarter. whole a quite do took to bad it's but on each can't that, to the to did a something look, your situation sort the

basis. on at it So forward, but far that analyzing good, to we'll our clearly but to a we're look adjust it thinking, may we're day-by-day continue realizing so going so have

Buck Horne

Yeah. sneak - idea the - for if just curious the congrats at levels, program? the in Thanks. repurchase window I program, becoming think if the that's I'm can the And a market you just one when one I last, move. first active can begin that can opens in company on great these price on if so when

David Bistricer

after hours XX release earnings. the we

Buck Horne

All All Appreciate right, guys. again thank you perfect. right, it.

Michael Frenz

Thanks Buck.

JJ Bistricer

well. Stay Thanks.

David Bistricer

well. Stay

Operator

is question Craig, from Okay, line is your next coming your live. Kucera. Craig

Craig Kucera

Hey, Yeah. guys.

David Bistricer

Hi.

Craig Kucera

there. Hi

from Aside looking the buyback, $XX there. you're million at

You still kind are or have on looking a the updated balance thoughts Are you for there? thoughts that? what of still use current your pretty significant the amount of of sheet. acquisitions cash Any on

David Bistricer

We're just to to don't plans going cautiously do the have how going markets going on it. and what specific this unfold. - to that's the market with everything what's react yet - to look we're on. any it's still reviewing see to how taking all a We at We're

in issues thing the Our making everything some being we we going have prepared with to is I as goes how said market unfolding. a things is script, maintaining through focus it's do landlord essential now we the with just think those to all like yeah, will who and responsible people cash that sure everything time and good and we're working working obligated and right are what about received the tenants the we till be as do see planned, services

Craig Kucera

than from that much as expect that Okay. Tribeca. to was mentioned property at occupancy improve at I there you promise the But it COVID? occupancy other last you even that quarter or anything know had last specific did as year

David Bistricer

my second - the - where the was suburbs. some other up. properties the a than and opening property, City he's more can see all, Boroughs I more in schools Manhattan, with going the homes are wherewithal people the there And that Governor of are move No, out in announced That you private than the rural really homes, trend now more homes from the leave not up, was to on more the temporarily. asking to Boroughs had a that the the or I public opening at And than of up particular going opening opening as places, think it's think portfolio digital are summer people in schools into Manhattan, the the way City. - so

stabilizing. see I that move that we'll think

Craig Kucera

great. Okay,

up a think likely a you had I again? are at Tribeca, that at any tenants - to you least in June, retail not other mentioned had restaurant open had closed early going

David Bistricer

a very anything space. to obviously not moment the knowledge, Not we know I the that's at exposure opening. my don't of small But retail to

Craig Kucera

hear And still look and imagine great. hold Okay, I'm in second they down that curious to in the year Have third the that with of on sort back term? quarter here is or really near application things up quarter. in slow picked

David Bistricer

processes, now again notified happen. electronic No, allow they process hearings. with holding process Obviously, that did pandemic actually not just public the process they've through the the to not that they They opened but were that public procedures, a remote and Zoom a we're up to are is proper they're then Europe but in hearings - - things opening public the hearing the process. make allowed up obviously us available have

So we're going to go going back and try to get again. that

Craig Kucera

great. it for Thank me. Okay, you. That's

David Bistricer

Thank you.

JJ Bistricer

Thanks Craig.

Operator

Okay, no further have we [Operator looks queue. in Okay. like Instructions] questions

David Bistricer

please to And Thank soon. stay much and a you speaking again good you look day. you. we Thank very Have to forward everybody safe.

Operator

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

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

Clipper Realty (CLPR) 11 Aug 202020 Q2 Earnings call transcript