CLPR - Earnings call transcript Q4 2020

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Operator

Good morning, ladies and gentlemen, and welcome to the Clipper Realty 4Q 2020 Earnings Call. At this time, all participants have been placed on a listen-only mode. And the floor will be opened for 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

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

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

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

David Bistricer

recent and and the Thank activity, pandemic. leasing pandemic. I call of respond COVID-XX JJ, the to I including to for our taken milestones quarter will will to how you, over Clipper continues the measures in performance who as as including provide Michael. then fourth highlights morning, company property-level will to our call the welcome and performance, discuss light turn business Realty. Good well to XXXX earnings an update

financial speak about our Michael performance. will Finally, quarterly

during Realty thanking will unprecedented then your these work team perseverance times. take and entire Clipper We I begin their continued hard for will by questions. the

proud our circumstances our We the for year business. communities shareholders, residents, and are ongoing are under very efforts to their their of past grateful challenging over dedication

throughout operational remained the pandemic. open Our and properties have

continued safe steps with to make We tenants local necessary orders. to our compliance in and and the take state

quarter seen New beginning fourth City from in in into continues have the the the as economy and activity general of residential depths the pandemic. XXXX, strengthen of to we York the and increase During an leasing

demand pricing York New expect City improve the to end, to leased vaccinations XXX year to up basis continue of properties and points the At We versus accelerate, were proliferate. as increase and third open continues the approximate end quarter. XX%

We York are confident City. in New of the resiliency

cost Real XX loan Street more to interest-only for continue mortgage with Funding city of Livingston bears remain loan We the first to which The return expect a XXX million, with broad overtime. We our Last is month, property a reduce interest refinanced annual at no Citi a proceeds position. we basis, Estate $XX was our secured term, $XXX existing expected property interest to loan in for at bore through Net non-recourse debt service asset except non-cost by amortizing due and $X.X of in debt million repaid and and increased collateralization the million. collateralized We XXXX. approximately finance carve-outs. on X.XXX% XXXX portfolio to properties normal desirable X.XX% operations and May, by cash an to the state that on years entire million our to $XX range tenants our our asset is standard Inc.

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

perspective. from property well is a liquidity Our positioned

year. growth of approximately in $XX of program price quarter, million shares fourth of the average repurchase the August share per we at million common X.X under During XXXX. November announced an We $X.XX in completed repurchase repurchased of our program stock last

developments. recent our to Turning

acquisition redevelopment Atlantic of mile Heights, Terminal Barclays Hub. Pacific from XXXX We located our Prospect Street Center continue the one to in Brooklyn, the proceed with about

construction Street years in two will project has the total, permits on rate. take approximate our House to the our to expected annual add are $X.X are August develop XXX-g million a XXXX. shortly property like increase commenced complete increase JJ properly new rate. Together And of million project to to to normalized will roles, As additional the how XXXX, previously $X.X at estimate update an litigation. hand the a portfolio, NOI. an of end stabilized we an the Tribeca provide office Kuzmich construction NOI discussed, XXX in and expected these with $XX lease further result XX% commence and cost of cap XX% commenced. X.X% of a in to on we'll portfolio at incremental the the NOI In I'd December, increased provide add by annual and XXX $X annual these representing in run million that city update Livingston limits rent to million property

period for on XXXX, of the As case. years the is City filing complaint four XXXX and rent Court during determined of the rent any Board. ruling applied Appeals actually Rent this to by If previously Appellate Guidelines Division the prior the discussed, are the charged increases be date to four-year rents Holdings by permitted at October overcharges. XX, comparing determination to Kuzmich the of to overcharge New base York Regina

ruling property. have majority which regard. units material are movements at believe lower and this market. free not eliminating remanded amount back all of this litigation courts, the overcharged yet. as liability do a determine No by attorney's impacted tenants The not rent not exposure case will Although expected future existing impact will those been as of the rent be dates current financial scheduled The business liability have court for pertains this are on our overcharge, it the We to that fees. to of is in tenants subsets our will the the limited vast to and litigation the previous altogether, limit

Lastly, the quarter I'd like fourth comment on to results.

over details quarterly will who and update performance. provide on $XX.X further call now million. to of and provide reporting to our response I $X revenue financial on are JJ., our $XX.X will an NOI pandemic. the million will million, of We operations of turn the AFFO Michael

JJ Bistricer

employees gratitude this begin I their you. commitment again our efforts unprecedented ongoing Thank by for tireless company's communities. inspired period; by extending throughout remain the and the to tenants we to our

to and continue mandated maintain COVID protocols, related provide government permitted and regular to orders safe with our rigorously to compliance tenants. residents employees keep in We services our

mid- our and have quarter. residential end We've the marked to in the approximate New the pandemic. activity the high-XXs of quarter leasing XX% strength at the continues We from of further few in a increase were least seen York year rental fourth range, the end, the challenges today. third at in a first uptick at most properties of XX% at has Tribeca beginning strong This the emerge At percent the in demand third from from XXXX to continuing level solidified XX% of in months of the increased strengthening Occupancy to House as XXXX. year-end seen quarter. end City at

the to fourth neighborhood. believe attractiveness We Tribeca Flatbush and and will are the rates to manage from pre-COVID a House return working given quarter up in at standpoint term, in The revenue held complex pricing revenue from Gardens levels the the to other surrounding standpoint. luxury diligently that buildings a well Brooklyn compared at occupancy in Longer quality property. rental we the assets

Rent pandemic, the quarter. record foot end $XX.XX XX% it throughout per high was square has at occupancy the property ending of the maintains As the a leased. the quarter

reorganized to an at of certain expense, manage to property we ongoing annual in with growth element previously, is $XXX,XXX. our key to As a noted which opportunity. excess cost story strong operations expected effort remain pandemic. value incremental and as and have savings the have our of Flatbush continued the the collections part portfolio is of result during expansion project in Gardens FAR Rent

the fourth over rate collection was Our in XX%. quarter

a work arrangements. they their cannot the reviewing alternative as notify with on tenants including meet a basis result case-by-case when they us potential to payment pandemic, continue rent of obligations We that

necessary at to will the underground side, abatement. XXX,XXX multifamily fully expected XXXX we is regulatory XXX(a) Street the On eligible are XX% tax XX-year building parking. nine-story, to rental free foot Pacific be rentable indoor property XX% with a The and amenitized, total and a process which is XXX completing units, a market have of square for affordable construct development

We a process of are for loan project. construction the negotiating in the

we to expenses across as the over pricing the call the New remain from continues Michael, and financial now discuss on business position to best emerge ourselves York occupancy, will City who Looking to ahead, our optimizing turn pandemic. focused I will results.

Michael Frenz

Thank you, JJ.

$XX.X the was third lease primarily fourth achieved $XX.X property year-over-year a Tribeca leased for to For partially of attributable in million, AFFO A the at office property at XXXX. NOI quarter, and we during Street of quarter residential the of of XXX We and million offset revenues rental compared the fourth $X million Livingston achieved rate occupancy change House of quarter revenue by XXXX. the $XX.X the slight to of the commencement decline new million.

changes due increased increased tax increase the in to the property estate of were follows: expense cost $X.X On May by XXXX. operating and the increases. industry general of in in and COVID-XX. year-on-year, million provision the an expense as key side, by bad the expenses driven Real impact by for fourth due in the primarily quarter to debt taxes $X.X insurance year-over-year increased in Gardens million $X.X Interest insurance by due across to fourth the the quarter primarily quarter million year-on-year, property fourth year-on-year property increases Flatbush portfolio the refinancing

XXX for shareholders from standard debt of is positioned to Livingston perspective. any million not record [ph] the of share $XX Pro maturities refinancing non-recourse, we quarter. earlier, properties unrestricted We The last will cross-collateralized dividend per have have mentioned XXXX. of million and month, operating cash for XXth. we $X.XXX asset-by-asset on are dividend fourth March amount David an outs. be on debt a last of $XXX as Street consisting our restricted a basis, As cash. subject announcing of quarter, until is and Today, financed on forma the portfolio March our well to XXst we liquidity no limited same on paid of $XX cash, We are the million carve

restatement. unaudited the statements XXXX covering disclosed each previously Lastly, three issued our consolidated as first financial of quarters of previously require

and Our previously reported three impacted XXXX NOI restatement. the of be of each first the for AFFO will adjusted not by quarters EBITDA

position cash impacted Our flows and will cash liquidity not be the by also restatement.

Form file XX-Q for first We Reports of quarters three Quarterly amended XXXX. on the each of will

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

David Bistricer

portfolio our of focused safety you, throughout operating tenants highest priority. efficiently, the Michael. on remain the our our We with and pandemic, employees, Thank

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

thrived we questions. for through City Street and and to capitalizing healthy. everyone York stays like opportunities, recovery to XXXX in cities I a from on hope forward present beyond. We pandemic other throughout accelerate open growth survived look of history, and up the and We and New including enthusiastically line challenging has circumstances redevelopment, the the would Pacific safe itself. that, myriad XXXX will that developments With expect to

Operator

[Operator the line you. Thank question. Craig, your from And Craig is Riley and affiliation Please Instructions] is your coming live. your Kucera pull first announce Securities]. [B. question

Craig Kucera

Yes. Craig questions. Thanks. with Hi, this Riley and is Good Securities. thanks morning, for taking my B. Kucera

you Let's earlier talk quarter. about refinance completed the this

million cash. about in now $XX have You

restricted still as refinance? of And a had of cash well. know I that. excess you You excess as with you doing you have on the got your on what from us refinances Flatbush the this Can cash last sense year's you plan cash give top after

Just helpful? some be thoughts would there

David Bistricer

on extend this interest only that we We The to prudent criteria the be are to itself. opportunities presents basis. will company a the time. we the specific it confident pretty to it the as And our of maturity in itself. that moment continue took environment, on at low thought it don't we advantage present for opportunities have refinancing days plans lookout any And opportunities these do time; meet investment at that was overtime interest

Craig Kucera

it. million you another completed quarter; in revisiting Got share is fourth $XX And share the million now the – the repurchase board XX that authorization?

David Bistricer

yet. discussed been Not

the know, the $X gone to from where As we stock has shares. $X up purchased you

about We haven't we'll we had make discussions it. we and any If any that. announce yet obviously do decisions,

Craig Kucera

forward-looking me at NOI done and what can XXX there the some any the that you color trailing LTV, on be helpful? refinance was or would Livingston, on give was Got it. color And

David Bistricer

approximately LTV XX% CMBS or it XX% about a was alone. think I was

Craig Kucera

was And lease? done that revised on the

Michael Frenz

ahead sorry. Yes, Go David.

David Bistricer

it was. Yes,

Craig Kucera

b, getting rents the of two-part to Okay, is you that properties. quickly where so at exception a what at of some to that, have are occupancy? job get or House. up is third had quarter rents closer of from or that great. guess, now quarter back-up did occupancy now kind this But that a is had pain short-term to with reduce you a good very really you to House Clover operated much that take like I is of to your begin some number you – And traditionally XX% a – And particularly Clover market $XX that your very to And of Tribeca? a pushing fourth kind did you in question, occupancy now a, expectations the

David Bistricer

as question. is Great latter strategy our obviously, always get Can a that smoke my The opportunity. rent is father is, says, true, back. last never we

and for to is. was and will the There amount around, position be maximize plans lot when a to the great cessation is kept tide where try rents to has on high. slowly they it's able has been changes there a the our for the start we're before construction to pandemic I seeing to going to product rents occupancy back construction. So think the And increase slowly time. over we've of strategy always And now creep going and less occupancy, of of were

that'll And capture the But positioned. during think those enjoyed. we that well were. just And where get occupancy turn to are to to help properties see prices the back the rents, well us. slowly they we pandemic, towards maintained, now the I starting we'll lowered

Michael Frenz

relates as a JJ the the well, we of as fourth creep quarter to opportunity David particular, we took months couple said, House, let, speak as back of In there. can Clover the a up year, the see to I fill but into this up. started to first building it

I think House per in is square rent already XXs the mid foot. Clover on

around next Well, here I'll the the tick obviously to of seen know information, but become XXs to you give at has weeks Clover House. and updated QX. back mid we'll again, couple So we've already of up in more into higher kind

Craig Kucera

is that you opening you to would have Great. thought And on Just at spending that that as began from that about two years years your bit commentary, know from first slowed that, project. that or years things down it far as point So a XXXX you some two when we'll two see completed, that, Pacific, in XXXX, given today? optically I is appeared said project? have from take

David Bistricer

I think today. on two precisely, is of it's predict probably conservatism more like, to area side it's years but hard from the

Craig Kucera

Got the it of looks like in a bad expense you lot whole take quarter. And didn't debt fourth it. here

Just we been first at versus Tennessee looking sit here K that's Mike, in the washed Qs. do you feel of quarter? your as largely prior like out

Michael Frenz

more versus but million and did can No, bad I of offline actually in decent the expense bad debt we of was detail quarter. amount like, think, take again, of into go if in we mid-XXX,XXX. QX It you QX a fourth $X roughly debt

said, continue So payments talk start rebound. did the we leases you'd we in as, like certain $X here and whatnot. and down and million the still yes, And continues if stimulus mid XXs, can as just, again, we that fourth expect to, strong take quarter to we we're economy come offline creep the lend to analyze through but the seeing calculation, about but it. We we're examining collections, in to sort of

level we'll tick down. start we're hopefully at back So peak to hopefully here a and roughly

Craig Kucera

it That's for me. thanks. Okay,

Michael Frenz

Thank you.

Operator

were from the Thank you. Instructions] questions And no this queue there time. at [Operator other

David Bistricer

with We Thank to safe. you forward look for joining you soon. again today. us speaking Stay

Operator

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

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

Clipper Realty (CLPR) 17 Mar 212020 Q4 Earnings call transcript